Financing Education (SDG4): Role of Islamic Blended Finance

Education is a very important factor in unlocking the human potential and in turn, the development of economies. The revelation of Islam starts with the word Iqra (read). Since the conclusion of the Millennium Development Goals (MDGs) and the introduction of the Sustainable Development Goals (SDGs), researchers and policy-makers have identified gaps in financing education that requires additional resources to be attracted through different means. In order to implement SDG4, which is about education effectively, alternative financing mechanisms are required to be innovated in order to overcome the deficit in resources targeting education. The vast majority of Muslim countries are of developing and most are least developed and financing mechanisms are necessary to be in line with the local cultural values and religious proscriptions in Muslim societies. The research analyzes various studies to understand the historical context of education, the importance of education in Islam and the challenges to implement SDG4. The research also provides various data from reports to study the current state of financing education in the world. Finally, the research studies different suggested mechanisms and the projected role of Islamic finance in financing education. In addition, based on the mechanisms suggested, the research formulates a model to incorporate Islamic Blended Finance in financing education, which provides shifting the paradigm of financing education from public to a mixture between public and private investment.