Many Muslims in India live below the poverty line. In case of an extreme need, a poor Muslim may either sell some of his essential belongings or pawn some items, normally with a non-Muslim pawnbroker, who charges a very high rate of interest. In the overwhelming majority of cases, the owner loses the article he has pawned, because he is unable to pay the advance and the interest to the pawnbroker. Some of us Indians working in the Kingdom have come up with the idea that we pool together the interest paid by the banks on our accounts in order to establish a facility whereby we lend poor Muslims who are in need of a loan, and we get those articles which would have been pawned as security for the loan. If the borrower is unable to pay back, we may sell the article given as security, and we pay the owner whatever remains of the proceeds after deducting the amount of the loan charging no interest whatsoever.
Social welfare is a very distinctive feature of the Islamic system.
A Muslim community is required to look after the poor in that community. God has established the system of zakah, which is obligatory to every Muslim, once he qualifies as a zakah payer, so that the hardship of those who are in less fortunate circumstances can be eased. In this present day of ours, the Islamic social justice is not seen in practice, and there are several reasons for that. One is the fact that in some Muslim countries, the government does not bother about establishing a department for the collection of zakah from those who must pay it and its distribution to its rightful beneficiaries. In fact, governments in many Muslim countries prefer to operate an economic system which is bound to create great difficulties between those at the top and those at the bottom of the social ladder.