IslamicFinance.de

Islamic finance offers an interesting alternative to the way the financial sector operates across much of the world. That was part of the message presented by Belaid Jheengoor, a Bermuda-based chartered accountant and asset management executive. He also noted there was still room for a jurisdiction, such as Bermuda, to emerge as an Islamic insurance and reinsurance leader. Today, the largest domestic markets for Islamic finance are Iran, Malaysia and Saudi Arabia. However, a number of non-Islamic countries and jurisdictions are building their presence in aspects of Islamic finance, said Mr Jheengoor. He added that the sector was experiencing double-digit growth.

Islamic finance remains one of the bright spots in the global financial industry post the 2008 financial crisis. The industry is now finally poised to break into conventional financial markets in the West. For global investors, the sukuk (Islamic bond) market is probably the area of greatest interest within Islamic finance. Traditionally, governments and government-related entities in Asia and the Gulf Cooperation Council (GCC) issuedsukuks denominated in the local currency to domestic investors. However, increased demand from global investors has led to increased cross-border issuance from non-traditional sources.

There will always be a need for takaful, however, takaful operators must work together to aggressively promote the product to the public, said Hong Leong MSIG Takaful Bhd. Chief Executive Officer Wan Mohd Fadzullah Wan Abdullah said it was imperative to educate the public that takaful was an all-weather financial planning tool. While the growth of takaful has been at a faster rate compared to conventional insurance, Wan Mohd Fadzullah said the volume was still low. Sri Lanka-based Amana Takaful Life Chief Executive Officer, Reyaz Jeffrey said one effective way of promoting takaful awareness, was through agency channels.

For the second time after the 2013 edition, Tunisia has been chosen to host the World Social Forum. The forum will be held from March 24 to March 28 at the Farhat-Hached university campus in the capital Tunis. The organizational committee for the 2015 forum, under the head of Tunisia's social and economic rights forum, Abderrahmane Hedhili, said that civil society would be mobilized for the event as it was in 2013.

Standard Chartered Saadiq has launched an Islamic financial education programme this month. This programme aims to educate the UAE Community in the ways of responsibly handling their financial future in a Halal way. This programme comprises of a basic and an advanced module which focus on the prohibition of transactions which involve riba, fair distribution of profit and loss as well as prohibition of transactions which involves uncertainty or speculation. This is an extension of the Financial Education for Youth programme which Standard Chartered Bank has been running since 2013.

At the Sanabel conference in Dubai in October, it was impossible to ignore reminders of the crises enveloping the Arab World. While there are signs of some progress at the political levels, the reality on the ground in many countries remains stark. After the Sanabel conference, many donors and investors focusing on financial inclusion in the region gathered to discuss how they should respond or adapt their approaches. Over the next few weeks, several contributors will share additional insights into how they are coping and what lessons they have learned. In addition, there are several resources already available on this topic of post-crisis microfinance.

The World Development Report “Mind, Society, and Behavior" was recently released. In the Overview alone, the reader is met with an abundance of findings related to consumer protection, financial capability, savings and other key topics involving financial inclusion. The report highlights that psychological impulses such as present bias, loss aversion and cognitive overload can lead to poor financial decision-making. For those in or on the edge of poverty, the ramifications of these poor decisions can be devastating. Yet, as outlined in Chapter 6, there are a range of interventions that have been shown to help address behavioral constraints on financial decisions in a developing-country context.

The theme of the 12th IFSB Summit underscores the recognition that while there are significant benefits to Islamic finance from the processes of growth and international integration that is underway, there are corresponding challenges in building up the regulatory, supervisory and surveillance capabilities in order to contain vulnerability to cross border volatility and contagion. In particular, many regulatory authorities involved in the regulation and supervision of the Islamic financial services industry face challenges in identifying the applicable principles and benchmarks for assessing the gaps in their existing structures.

A nine member delegation comprising of leading Shari'a scholars from Morocco met with Mr. Rasheed Al Maraj, Governor of the Central Bank of Bahrain. The visiting delegation wants to learn from the Bahrain experience in Islamic finance. Mr. Al Maraj welcomed the eminent scholars and assured them of CBB's full support in their Islamic finance journey. During their three day visit the delegation met with the CBB officials, leading Shari'a scholars in Bahrain and global Islamic finance bodies such as AAOIFI, IIFM and CIBAFI. Morocco has been gearing up to offer Islamic financial services in the wake of strong domestic demand.

Tunisia was once one of Africa's most sophisticated and prolific bond issuers, selling bonds denominated in euros, dollars and yen, and later this year it is expected to issue its first Islamic government bond. International investors keen to capitalise on the country's recent presidential elections put in orders of more than $4bn for the $1bn bond, allowing the country to borrow at a lower than expected rate of 5.875 per cent over 10 years.

For all the sectarian violence gripping Iraq, Shari’ah-compliant banks operating in the nation see opportunities for growth. Elaf Islamic Bank, the 14-year-old Baghdad-based lender, is targeting 28 per cent increase in profit this year, even as rival Cihan Bank said its income dropped last year as militants seized vast swathes of the country. However, Cihan Bank also said its outlook improved toward the end of last year as the US began airstrikes on Islamic State. Meanwhile, Iraq’s cabinet approved a draft law yesterday regulating the Shari’ah-compliant banking industry, which will now move to the country’s parliament for passage.

The British Muslim Awards sponsored by the Al Rayan Bank, formerly known as Islamic Bank of Britain (IBB), aim to recognise a wide range of achievements which cover various aspects of society including business, charity, sport, arts and culture and much more. This year the event took place at the Chateau Impney Hotel, Worcestershire on Tuesday, January 27. Several nominees for each of the categories had been announced prior to the event. Categories include Muslim in the Community, Arts & Cultural Awareness, Young Achiever of the Year, Charity of the Year, Responsible Media of the Year, Religious Advocate of the Year, Muslim Woman of the Year, Best at Sport, among others.

Tawreeq Holdings, an investment group based in Dubai and Luxembourg, has launched an Islamic trade receivables financing platform catering to the Gulf region's small businesses, with plans to tap the capital markets to fund the venture. The firm's CEO Haitham Al Refaie said the concept aims to give smaller firms a funding alternative to bank loans. Besides start-up capital from regional investors, the firm plans to raise additional funds, he added without giving monetary figures. Tawreeq's platform provides sharia-compliant factoring by connecting corporates, suppliers and investors to securitise trade receivables.

New Islamic units of three state banks will accelerate Turkey’s plans to expand the share of Shari'ah-compliant assets, said Osman Akyuz, head of the country’s Islamic banking association. Akyuz foresees the country’s interest-free assets increasing by 30 per cent to $60 billion in 2015, up from 1.2 per cent growth in the 12 months through November. The association, which represents Turkey’s four Islamic banks, is also working to introduce new debt instruments, Akyuz said. Besides, the three state banks -- Ziraat Bank, Vakif Bank and Halkbank -- have pledged to quickly set up units for Shari'ah-compliant banking.

Gatehouse Bank has appointed David Swan in a newly-created role as head of real estate investment. Swan will lead the firm’s real estate investment department in the origination, management and realisation of real estate equity investments. Gatehouse currently advises funds with approximately £1bn assets in the UK and US. The business is focused on diversifying its investment capabilities and expanding the geographical footprint of its portfolio. Swan has more than two decades of experience in the real estate investment sector. Prior to Gatehouse, he founded Bridgeport Real Estate in 2012, a real estate company advising investors on a range of large scale off-market transactions.

CIMB Islamic Bank Bhd. plans to start offering microloans in Malaysia as it seeks new growth avenues after delaying plans to create a Shariah-compliant megabank. The Malaysian lender will offer a wide range of products including microsavings, microinsurance and advisory services. While acknowledging the risks, CIMB will put in place a framework to manage defaults. The lender’s microfinance business will develop in stages starting at the higher end. Keeping in mind that prospects for growth are good, the bank is looking to launch something subject to relevant approvals by this year.

Despite the surge and purported popularity of Islamic finance, the industry is inconsequential in comparison to conventional finance. Islamic finance assets are heavily concentrated in the Middle East and Asia, and overwhelmingly in the Islamic banking sector. The Great Financial Crisis has caused a fundamental loss of trust by the general public in the financial system. Islamic finance should capitalise on this opportunity by highlighting its ethical standards and risk sharing principles. Nevertheless, there is a long road ahead for Islamic finance to achieve mainstream status. GCC governments need to take the lead to mainstream Islamic finance.

Banque Misr has registered total Shariah-compliant funding of two billion Egyptian pounds (US$135 million) by end of 2014. Banque Misr's Shariah-compliant deposits have totalled around 26 billion pounds. During fiscal year 2013/2014, Banque Misr had arranged a number of Islamic funding contracts including a US$110 million contract as pursuant to Mudaraba system. The bank had also implemented the first joint Islamic financing with Istisna'a followed by Ijarah system described in the disclosure to finance a project with a total value of about 1.07 billion pounds, Moreover, the bank had carried out the first Islamic finance in the Egyptian market with Musharakah Mutanaqisah system.

Family businesses in the GCC are looking to increase the number of women in senior management positions over the next decade to emulate the success of their global counterparts, says a new study. The joint study undertaken by Alsayedah Khadijah Bint Khawilid Center and Strategy& (formerly Booz & Company) investigates the role of women in family businesses across the region. However, the study reveals there are still major obstacles for women hoping to participate in family businesses, particularly cultural perceptions of a patriarchal society and fierce competition from family members.

Tawreeq, an independent Dubai/Luxembourg based group, has launched a supply chain finance platform targeting SME’s. The company led a development process to devise a Shari'ah-compliant workflow for supply chain finance. At its core is an IT platform that connects all elements under a single, cloud-based system that allows global reach and service. Tawreeq tackles challenges faced by SMEs through cash-flow tools known as factoring and reverse factoring. Tawreeq has worked closely with Amanie Advisors to ensure Shari'ah compliance and certification of its products and processes.