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Islamic finance is key to closing sub-Saharan infrastructure gap

The infrastructure gap is nowhere more pronounced than in sub-Saharan Africa. The Boston Consulting Group/Africa Finance Corporation report of May 2017 states that the sub-Saharan Africa infrastructure gap amounts to about $100bn in yearly infrastructure investment. Islamic finance is fundamentally aligned with economic and social development, poverty alleviation and advancement towards the UN sustainable development goals. The asset-based approach of Islamic finance is in line with traditional infrastructure-financing models that involve the procurement or construction of a tangible asset. In the past decade, Islamic finance has been growing steadily in sub-Saharan Africa. South Africa was the first African sovereign to issue sukuk, followed by Senegal, Ivory Coast, Togo and Nigeria. Most Islamic funding for infrastructure development is flowing through governmental channels. In sub-Saharan Africa large infrastructure investment is still mainly the preserve of the public sector and public-private partnerships are still in their infancy.

Africa: Will #Fintech Grow Financial Inclusion?

Financial technology investors are calling for policies that promote development to achieve the World Bank target of universal financial access by 2020. Financial experts who attended the Africa Payments Innovation Summit in Nairobi said digital disruption could increase the continent's banked population. The emergence of mobile money services over the past decade has contributed to financial inclusion in Africa. According to the mobile operators association GSMA, there were 277 million registered mobile money accounts in sub-Saharan Africa at the end of 2016. But despite the progress, at least 85% of transactions in the region are still in cash. There is a mistrust between banks and telcos about whose customer they are serving, who owns the infrastructure, and the loading of additional costs on transactions between the two. Central Bank of Kenya Governor Patrick Njoroge warned innovators against getting carried away by technology.

Is bitcoin permissible in Islam? Muslims disregard clerics’ warnings and invest

#Turkey has witnessed a rise in interest in bitcoin and the hundreds of other cryptocurrencies that have been modeled on it. Bitcoin trade here has gone from about 9,000 transactions a month in May 2017 to 42,000 in December 2017. A handful of companies in construction, education and the food industry have begun accepting cryptocurrencies for payment. The value of bitcoin and other cryptocurrencies fluctuates widely, leading some to caution against investment. Diyanet, Turkey’s religious affairs directorate, said in December that bitcoin and Ethereum had no intrinsic value like gold, nor were they backed by a government, so they did not meet the standards of reliability to make them a currency. Another ruling in January said the factors driving the value of cryptocurrencies were too shrouded in secrecy, exposing investors to fraud and use by criminal networks. According to Onur Baran Caglar, a FinTech consultant and lecturer at Istanbul Aydin University, the debate over bitcoin misses the real potential of the underlying technology. That real potential is the blockchain, a digital ledger that keeps track of all bitcoin transactions worldwide.

Dubai launches #incubator to boost ethical Islamic start-up firms

Dubai Airport Freezone Authority (DAFZA) has announced the launch of Goodforce Labs, a startup incubator focused on supporting ethical startups in the fields of Islamic economy and Halal industries. Goodforce Labs will select a group of startups and small and medium enterprises and support them towards a $50 million in annual revenues and measurable social impact. Most Islamic economy startups face many problems and struggle to grow and survive. A number of startups have joined the incubator like Growmada, an e-platform for selling handicrafts from developing countries, Waqf 2.0, a cloud-based platform for managing Awqaf, Zileej, a company specializing in disciplined entertainment products and Rabia Z, which designs modest women’s clothing.

Two Essential Volumes on #Corruption

In this article Rick Messick recommeds two recent books on corruption: Dan Hough’s Analysing Corruption and Alina Mungui-Pippidi and Michael Johnston’s Transitions to Good Governance: Creating Virtuous Circles of Anti-Corruption. Hough's book is an introduction to the study of corruption for those new to the field. Mungui-Pippidi and Johnston's volume covers Botswana, Chile, Costa Rica, Estonia, Georgia, Qatar, Rwanda, South Korea, Taiwan, and Uruguay. In this book experts explain how these countries progressed from a situation where corruption is the norm to one where it is becoming the exception. In these countries the governance norm has changed from a biased resource distribution to a society where the state is largely autonomous towards private interest and the allocation of public resources is based on ethical universalism. Readers looking for practical approaches and innovative moves will find much of value in these books.

How much does Amazon’s rumoured bank account threaten MasterCard and Visa?

Amazon is planning to provide a product similar to checking accounts to bypass MasterCard and Visa for purchases on its platform. Card issuers stand to lose wallet share, if Amazon can convince people to change payment behaviour and open checking accounts with them for Amazon purchases. The bank of choice will win by growing deposits. It would also mean that smaller ecommerce merchants will need to work harder to attract sales away from Amazon. This strategy doesn’t have to be limited to Amazon and their bank of choice. For example, Amex Shop Small is an attempt at community purchasing mentality with small businesses. However, Amex Shop Small does not help the small business on the fee front. If the new bank account feature is introduced, revenues could be pocketed by Amazon as additional profit, or passed through to merchants to reduce sales fees and payment costs.

What’s the demand for #gold in Islamic markets?

The Dubai Gold and Commodities Exchange (DGCX) plans to introduce a physically-backed Shariah-compliant spot gold contract. Trading is expected to begin March 29. This comes at a time when the global demand for gold dropped 7% to 4,071.7 tonnes in 2017. Among key Muslim-majority economies in 2017, Turkey saw the biggest demand for investment bars and coins, at 52.4 tonnes, representing 5% of global demand. Indonesia follows with 20.2 tonnes, equivalent to around 2% of global demand for investment bars and coins. Saudi Arabia leads Gulf Cooperation Council (GCC) countries, with 9.9 tonnes, representing around 0.96% of global demand. The United Arab Emirates (UAE) saw a demand of 5.5 tonnes, equal to around 0.53% of global demand. Globally, Greater China and India were the biggest markets for investment bars and coins, at 313.8 tonnes and 164.2 tonnes, respectively.

MIMOS and INCIEF sign MOU for collaboration in the area of Islamic #Fintech

A Memorandum of Understanding (MoU) was signed by Malaysia’s Applied Research and Development Centre MIMOS and the International Centre for Education in Islamic Finance (INCEIF), to develop a blueprint for an Islamic finance-based investment technology platform. The MOU was signed by INCEIF President Dato' Dr Azmi Omar and MIMOS President Ahmad Rizan Ibrahim. Under the MOU, the two institutions will collaborate in research and development, in particular the areas of Big Data Analytics, Deep Learning and Fintech. Further, INCEIF and MIMOS may also cooperate in field-testing, technology transfer and commercialisation of technological products.

GFH joins as a founding partner in #Bahrain’s #fintech hub

GFH Financial Group said its recent partnership with Bahrain Fintech Bay (BFB) as a founding partner will drive innovation and create opportunities for growth. The partnership reflects GFH’s strategy to strengthen the integration of Fintech in the region. According to GFH Financial Group's CEO Hisham Alrayes, GFH provides new entrants access to a sophisticated network and gives advice on how to reach regional and international capital and markets.

'Waqf' can boost science

#Malaysia hosted a conference in which experts considered the relevance of waqf and how it could be engaged to alleviate poverty. In his keynote address, Sultan of Perak Sultan Nazrin Muizzuddin Shah explained that the concept of waqf preceded trusts and endowments. A donor endows a waqf with an asset and the waqf institution then spends its revenue in perpetuity on the fulfilment of public needs. The law governing waqf was borrowed by the English following the Crusades in the Holy Land. For example, Merton College at Oxford University was established with a financial endowment in 1264. This endowment has facilitated centuries of scholarship, learning and teaching. Sultan Nazrin highlighted the need for a better system for the governance of waqf. He believes that digital connectivity will open up new opportunities for innovative business models, as well as research and development-related investments, to unlock the full potential of waqf assets.

NAB arrests Modaraba corruption case accused

#Pakistan's National Accountability Bureau (NAB) has arrested Yasir Aziz accused in a Modaraba corruption case. The accused acted as finance secretary of M/S Elixir Group and signed the modaraba contracts issued by his brother Shahid Aziz. The public accuses Yasir Aziz of taking the investment and aiding his brother to misappropriate the money. Yasir Aziz also tried to sell the properties owned by the accused Shahid Aziz. NAB Director General Irfan Naeem Mangi confirmed that Yasir Aziz was arrested and assured that the NAB was committed to eradicate corruption from the country.

Global Regulators to Maintain AML Pressure on the #Cryptocurrency Industry

The inter-governmental body Financial Action Task Force (FATF) announced that it would step up its efforts in monitoring the use of cryptocurrencies in money laundering. The pronouncement of the 37-member international body demonstrates the heightened Anti-Money Laundering (AML) concern from regulators across the globe concerning illicit uses of cryptocurrency. Several countries have already taken measures. The European Council has recently taken measures targeting exchange platforms for virtual currencies, such as Bitcoin, as well as prepaid cards. In the UK, the Parliament’s Treasury Committee launched a probe to examine both the impact of cryptocurrencies on financial institutions and how best to police the new technology. South Korea’s ban on anonymous trading of cryptocurrencies took effect on January 30. Given regulators’ intense focus on the industry, it is likely that cryptocurrencies will be a topic of discussion at the upcoming G20 summit in Buenos Aires, Argentina.

Bill Gates Says ICOs And Cryptos Can Be ‘Super Risky’

In a recent ask me anything (AMA) session on Reddit Bill Gates talked about his view on cryptocurrencies and the future of transportation. He believes that the speculative wave around initial coin offerings (ICOs) and cryptocurrencies is super risky for those who go long. As cryptocurrencies are used for buying drugs, the technology has already caused deaths in a direct way. About transportation Bill Gates is doubtful about the pressurized capsule technology called Hyperloop, but he believes in electric cars and autonomous vehicles. In Japan Nissan and DeNA are planning a test run of a self-driving taxi service dubbed Easy Ride. In the USA Ford is launching a new partnership with Postmates to test its self-driving technology for deliveries.

New Islamic start-up #incubator launched in Dubai

Dubai Airport Freezone Authority (DAFZA) has partnered with Dubai Islamic Economy Development Centre and venture firm Technolera to launch a new start-up incubator. Goodforce Labs is launched to help Islamic small and medium enterprises to reach $50m in annual revenues and a measurable social impact. It will help start-ups to start, manage and develop their businesses while providing support in areas including design, marketing, operations management and technology. DAFZA said there are more than 2,500 companies in the ethical Islamic lifestyle market but many struggle to grow and survive. Start-ups that have signed up to the incubator so far include handicraft e-commerce platform Growmada, cloud-based charitable endowment manager Waqf 2.0, disciplined entertainment product specialist Zileej and modest women’s clothing firm Rabia Z. Financial literary firm iWealth and halal food e-learning platform Smart Halal are among the other entrants.

#Saudi prepares to auction detained billionaire’s property

Saudi authorities are preparing to auction billions of dollars of real estate and cars belonging to billionaire Maan al-Sanea. This is the latest signal that Saudi Arabia is serious about holding its elites to account. In an anti-corruption crackdown last November, authorities detained several senior officials on charges of alleged graft. The al-Sanea case is separate from the main anti-graft campaign. The businessman was detained for unpaid debt dating back to 2009 when his company, Saad Group, defaulted on debts. Creditors have spent the past nine years pursuing Saad for debt that some estimate to be between 40 billion riyals ($10.67 billion) and 60 billion riyals. Al-Sanea's real estate in Khobar was valued at around 4.4 billion riyals. Authorities are preparing an auction to sell his vehicles, equipment, a large quantity of building materials and some property before the month of Ramadan.

#Iran developing national #cryptocurrency to bypass US sanctions

Iran has revealed that one of the country’s banks is working on a state-backed virtual currency. Minister of Information and Communications Technology Mohammad-Javad Azari Jahromi tweeted he had proposed to implement the country’s first cloud-based digital currency. Iran is still mostly cut off from major international payment networks such as Visa and Mastercard and services such as PayPal. The announcement on its crypto project follows Venezuela’s launch of the world’s first national digital currency the 'petro'. According to President Nicolas Maduro, the oil-backed cryptocurrency has raised the equivalent of more than $735 million. After the successful pre-sale of the petro last week, Maduro announced a new virtual token, dubbed 'petro oro', which will be backed by precious metals.

Abu Dhabi Global Market welcomes 3rd Reglab cohort applications with SME focus

Abu Dhabi Global Market (ADGM) welcomes applications for the third cohort of its Regulatory Laboratory (Reglab) with special focus on the small-medium enterprise (SME) sector. ADGM therefore encourages all FinTech and RegTech companies, in particular those with a SME focus, to apply and be part of its RegLab. This includes technology startups which offer tools to both institutions and SMEs alike. The application period will close on 10 May 2018.

RegLab allows participants to explore and develop innovative solutions in a risk-appropriate and cost-effective environment. Moreover, participants will have access to a digital sandbox service provided by Temenos that enables them to integrate their solutions with banking data and functionality.

For further details of the ADGM RegLab programme, please visit www.fintech.adgm.com or contact fintech@adgm.com.

F1Cryptos Partner Michael Buchbinder Fields Interview Questions, Following HADACoin Listing Agreement

HADACoin's listing on F1Cryptos is a rational partership as both firms share the same beliefs about blockchain. The listing offers obvious benefits to HADACoin, with opportunity for liquidity and fulfilling external demand expected to have a positive influence on future valuation of the digital asset. F1Cryptos Partner Michael Buchbinder says the plan is to engage the age demographic between 20-30 that really seems to be embracing blockchain and the new possibilities emerging with cryptocurrencies. HADACoin's issuer, Hada DBank aims to integrate blockchain technology with Islamic financial principles. Hada DBank is in the midst of a crowd funding campaign, currently at pre-sale stage. HADACoin tokens are available for purchase at a current promotional price of 1 ETH – 4,000 HADACoin.

#Indonesia’s P2P startup Investree to raise Series B round, eyes collaboration with banks

Indonesian P2P firm Investree expects to close a Series B funding round in two to three months to finance the company’s marketing activities and expansion. Investree chairman Adrian Gunadi said that the investment would not only boost the company’s core business but also its new sharia product and online government securities business. The firm is hoping to capitalize on its large lender base, made up predominantly of the country’s millennials aged 21-35. Since its inception in 2016, Investree facilitated Rp 623 billion in loans. From the Rp 623 billion, around Rp 500 billion has been disbursed and Rp 367 billion has been paid back. So there’s around Rp 120 billion in outstanding loans. Investree plans to offer a new asset class on its platform, that of retail online government securities. The initiative will start either in April or May, they are currently waiting for confirmation from the Finance Ministry.

Margin #debt is at a record high in #US markets

According to the US Financial Industry Regulatory Authority, investors have borrowed a record $642.8 billion against investment portfolios. The leverage from this margin debt is a bid to increase returns, but it leaves investors vulnerable if asset prices decline. There was a market correction in February, but the question remains whether the recent correction was a one-off event. Either way, this is where the Federal Reserve has to be concerned about financial stability. When the credit markets become an integral facet sustaining asset markets, a sustained fall in asset prices can boomerang back onto the financial system.

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