In May Google announced it would ban all payday loan advertisements through its AdWords service. But months after the policy was implemented, brokers have easily sidestepped the company’s rules, leaving consumers still vulnerable to high-cost debt traps that can ruin their financial lives. These brokers are not payday lenders but what are known as 'lead generators.' They take consumers’ personal information, run a credit history, and then sell the file to payday lenders, based on what kind of loan they can afford. Although Google said they want to protect users from deceptive or harmful financial products, several advertisements are still displayed at the top of a search, from companies like GOInstallmentLoans.com, WeLend2U and QuickLoanTree.
The UK Peer to Peer Finance Association (P2PFA) has released a commissioned study on the economics of the peer to peer lending market in the UK. The study focused specifically on the eight-member platforms of the P2PFA which collectively comprise over 75% of the UK market. Reinder van Dijk, Partner at Oxera consulting, called peer to peer lending a 'real innovation' bringing benefits to both borrowers and investors. According to the report, P2P lending has created additional competition and choice in the market for loans and investment. P2P lending provides new options for retail investors, opening up access to risk-and-return from an asset class of consumer and business loans with net returns of between 4% & 8%. P2P lending does not create systemic risk, P2PFA member platforms provide a level of transparency which empowers investors.
A recent study on Islamic microfinance by the Consultative Group to Assist the Poor (CGAP), Yale University and Tameweelcom found less price sensitivity by some consumers and a lot of focus on simplicity in product offerings and Shariah compliance. Consumers of financial products are in general price sensitive and as costs increase, demand goes down. It turned out that about 30% of Muslims always prefer a Shariah-compliant product with little price sensitivity. When given the option to choose between Islamic and conventional banking products, consumers are less likely to make a choice than if presented with only one of the products. The authors attribute this finding to the 'paradox of choice'. If a conventional bank thinks they can maintain market share by starting an Islamic window to offer Islamic products alongside conventional products, they may end up turning off consumers.
Fitch Ratings has affirmed GFH Financial Group’s (GFH) Short-term Issuer Default Rating (IDR) at "B" and revised its outlook upward from stable to Positive with a Long-term IDR at "B-". The positive outlook reflects the steps GFH’s management have taken to strengthen its balance sheet by paying down debt, reshaping the business model with focus on income-generating investments, and consequent improvement of profitability. GFH said it believes that this upward revision of the outlook is the result of its new strategy and in developing new recurring steams of income through income yielding investments.
Underprivileged citizens today live in an economy that exposes them to certain risks, like unpredictable incomes and high daily expenses. With around 70% of the population still excluded, Indonesia has taken major leaps to improve the situation. Since the preceding high-level talks in 2010, Bank Indonesia (BI) and the Financial Services Authority (OJK) have focused on how to provide better access to financial services. The disproportional knowledge between the banking industry and the population in general is quite severe, and a product to address the specific needs of the economically active poor and micro entrepreneurs is essential. Moreover, the challenges of financial inclusion do not stop when formal financial services are provided. It goes beyond service provision to educating and empowering the community to understand finance. Financial inclusion cannot be achieved through isolated efforts. Collaboration between private companies, the government and civil society is necessary.
Until now a full picture of global debt was missing. However, the October 2016 Fiscal Monitor has put a number on the size of debt covering virtually the whole world. Global debt is at record highs, amounting to $152 trillion or 225% of global GDP. Close to $100 trillion or about two thirds are liabilities of nonfinancial firms and households, private debt. The remainder is public debt. The concern with excessive private debt goes beyond the risk that it may mutate into public debt. Excessive private debt is associated with financial crises. Moreover, financial recessions are longer and deeper than normal recessions. It is excessive private debt that countries should avoid. Therefore, regulatory and supervisory policies should ensure the monitoring and sustainability of private debt.
A report titled 'Developments and opportunities in Islamic-themed television and online video content' identifies 188 Islamic-themed television and online channels globally. The report is produced by Thomson Reuters and Dubai Islamic Economy Development Centre (DIEDC) in partnership with DinarStandard. It identifies the main Islamic-themed broadcast media markets in the Organization of Islamic Cooperation (OIC) 57 member countries. OIC markets generated a total of $10 billion in advertising revenue during 2015. According to Abdulla Mohammed Al Awar, CEO of DIEDC, this report is proof of the sustainability of Islamic values that endure the test of time. Haroon Latif, director of Strategic Insights at DinarStandard, said that Muslim viewers were a key customer segment in the Culture and Recreation sectors. He added that there were significant untapped opportunities across genres in Islamic-themed media.
Ahead of the World Bank's annual meeting, president Jim Yong Kim will set out his vision for ending extreme poverty by 2030 and boosting shared prosperity. He will speak about the links between growth, poverty and inequality, the changing face of poverty, and the role the World Bank Group. Following an introduction by the host of the meeting, Strobe Talbott, Jim Yong Kim will deliver his speech, then will engage in a conversation with Kemal Dervi?, vice president and director for the Global Economy and Development program at Brookings. Questions and answers will be fielded at the conclusion.
National Bonds Corporation, a Shari'ah-compliant savings and investment company in the #UAE, announced the results of its financial health check for Q3 2016. The survey found that the majority of the UAE’s residents are yet to sign up for Takaful coverage while only a minority is covered by traditional insurance. Within the UAE national pool of respondents, 89% admitted to not being insured against disabilities through Takaful in contrast to 11% that have traditional coverage against disabilities. The financial health check also charted the financial stability of participants. The results of the present survey are encouraging and indicate that 67% of UAE nationals and 72% of expat residents plan to pay off their liabilities and become debt free by end of this year.
More than 2,000 groups of women will acquire interest-free loans worth Shs43 billion from the government under the Uganda Women's Entrepreneurship programme (UWEP). According to Mr Puis Bigirimana, permanent secretary at the Ministry of Gender, women entrepreneurs are constrained by limited access to finance as they attempt to grow their businesses. UWEP will promote women's economic empowerment through entrepreneurship skills. Under the programme, groups will receive up to Shs12.5 million each while special projects that benefit a bigger community will receive Shs25 million. UWEP National programme coordinator Ms Brenda Kifuko said all beneficiaries will have to pay back to enable more women access credit. Groups that pay in the first year of reception will only pay the principle amount while groups that pay after the first year will be subject to a 5% interest rate in form of a service fee to cater for inflation.
Senior Vice President of State bank of Pakistan (SBP) was gunned down in the area of Gulistan –e- Johar, within the jurisdiction of Shariah Faisal police. Superintendent Police (SP) Gulshan Doctor Fahad Ahmad said that Muhammad Sadiq Siddiqui was going to a bakery when two alleged dacoits attempted to snatch his vehicle. On resistance, dacoits opened fire on him. As a result, he sustained serious injuries and died, while dacoits managed to escape from the scene with car.
In #Kenya the Higher Education Loans Board (HELB) is set to introduce Shariah compliant products. The proposal to make the students loan provider Shariah compliant is currently being reviewed by the Attorney-General, prof Githu Muigai. Once approved, the law will improve access for Muslim students to educational financial support helping them to obtain loans which do not infringe on their religious beliefs. The number of Muslim students at universities has been on a gradual rise and the move will be of great benefit. HELB Chief Executive Charles Ringera said the board was with Islamic finance experts in the implementation of the policy.
Azzad Asset Management has joined a consortium of responsible investors in support of a United Nations' call to end antibiotic use in global food supply chains. The UN statement calls member nations to bring clarity to antibiotic use through national and regional regulations. Antibiotics are frequently used for rapid growth promotion in livestock and poultry and to prevent illness in animals living in cramped and unhealthy conditions. Experts say that the overuse and misuse of antibiotics in the meat industry has contributed to the rise of antibiotic resistance in the US and across the world. It is estimated that this public health issue is responsible for 2 million infections and 23,000 deaths each year.
For the majority of the 1.4 billion of the world’s poor agriculture is the main source of income and employment. Many farmers live in areas lacking access to basic financial services, leaving them vulnerable to shocks and prone to low-risk, low-return investments. Improving access to financial services can help farmers make profitable investments that increase their yields. At a macro level, higher yields increase the total global supply of food. At a micro level, higher yields increase household income and food security for the world’s 1.5 billion living in smallholder households.
Across the world, organisations can no longer define success or efficiency solely on the merit of financial results or revenue earned. Reporting is still very much driven by numbers, and performance is measured in terms of hard outcomes, rather than the more qualitative aspects. An integrated approach asks the management of an organisation to consider a wide variety of capitals — beyond financial and manufactured capital. The concept is fairly new to the GCC, sustainability has become a major focus for businesses and organisations of all kinds. Today, sustainability cannot be separated from other business practices and needs to be fully integrated into each function within the organisation.
Lawyers have warned that failure to prevent economic crime could lead to more senior individuals being prosecuted for misconduct. The UK government's proposed legislation could lead to deferred prosecution agreements with the Serious Fraud Office. The involved companies would potentially give evidence against individuals implicated in misconduct. According to Judith Seddon, partner at Clifford Chance, the corporate criminal liability will provide for an additional serious consequence of failing to satisfy existing requirements for anti-money laundering and financial crime prevention.
A Dubai-based subsidiary of Islamic investment bank GFH Financial Group has sold its remaining 18 % stake in English football club Leeds United, ending nearly 4 years of Middle Eastern involvement in the club. GFH Capital sold the stake to Eleonora Sport, operated by Italian businessman Massimo Cellino. Eleonora now owns 100 % of the club, Leeds United said.
GFH bought Leeds United in December 2012 but within months began looking for new investment in the club, and in 2014 Cellino bought a majority stake in it. GFH Financial did not reveal the price at which it sold its remaining stake but said the deal would reflect positively on its financials and liquidity for 2016. Crippled during the global credit crisis in 2008, GFH Financial went through several debt restructurings but has resumed expanding in the financial services sector. In August it signed a memorandum of understanding to buy most of Bahrain's Bank Al Khair.
If we look back at the emergence of the Muslim Lifestyle markets as a global phenomenon, we can see an interesting pattern developing. From 2004 - 2007, Malaysia was the epicenter of the Halal movement, bringing the terms ‘Halal market’ and ‘Halal industry’ into the global business vocabulary. Bidding to become a global Halal hub, the development of their Halal food sector made Malaysia a role model for other countries looking to position themselves in this fast-growing marketplace. Abdalhamid David Evans, Founder, HalalFocus.net/ImaratConsultants.com, will be speaking about this topic at the Muslim Lifestyle Expo 2016 in Event City, Manchester on the 30 October 2016.
According to the UNCTAD-backed Sustainable Stock Exchanges (SSE) Initiative nearly 60 stock exchanges, representing more than 70% of listed equity markets, and some 30,000 companies with a market capitalization of over $55trn, have now made a commitment to the Sustainable Development Goals (SDGs). Stock exchanges can take concrete steps on five of the 17 SDGs, adopted by UN Member States in September 2015. These goals include work on gender, decent work and economic growth, responsible production and consumption, climate change, and global partnerships. The initiative's 2016 progress report notes that financial markets could do more to support achievement of the SDGs.
The high transaction costs involved in Islamic financing are likely to limit its use in funding infrastructure projects in Kenya. According to a new study commissioned by the Kenya Bankers Association (KBA) Islamic financing is deemed to be expensive. This fact is corroborated by the case study of Lekki project which utilised a loan financing scheme that attracts huge transaction costs paid by the special purpose company in terms of 1.5-4.0% one-off administration fees and notary fees. The working paper also recommended that a national Sharia board be set up so as to set standards for Islamic finance.