IslamicFinance.de

Beehive, the region’s first regulated peer-to-peer lending platform has funded its first SME in Bahrain. The funding was granted to Bahrain-based Mira Packaging Factory, which manufactures disposable cups in addition to other food packaging solutions for the GCC, and the African F&B industry. Mira Packaging Factory has a large customer base in Bahrain, Saudi Arabia and the regional neighbouring countries. This includes international airlines, global HORECA brands and local coffee concepts. Beehive CEO Craig Moore confirmed Mira Packaging Factory's eligibility for peer-to-peer finance after Beehive’s thorough credit assessment, which determines the company’s ability to repay the loan and provide excellent returns to its global investors.

Matt Smith explores how sharia-compliant repo-like structures can support liquidity management in Islamic financial markets, and considers the structural, regulatory, and legal factors that need to be addressed. Islamic finance is steadily increasing its use of sharia-compliant alternatives to repos, helping the industry better manage liquidity and enabling sukuk holders to increase returns. Central banks use repos to control money supply, while commercial banks use them to manage short-term fluctuations in their cash holdings. Such structures effectively involve paying interest and so are forbidden under Islamic law. Enabling the widespread use of repo-like structures would help expand the secondary sukuk market, which is typically dominated by buy-and-hold investors. Yet asset growth among Islamic banks has slowed, while liquidity is increasingly scarce.

Over the past 15 years the British Museum has played a valuable educative role in Middle Eastern culture. It has shown us the legendary Babylon, introduced us to Persia’s great potentate, Shah Abbas, opened up the imperial court of Ashurbanipal, travelled to Afghanistan, the crossroads of ancient culture, and acted as tour guide on the Hajj. A splendid new suite of permanent galleries has also been opened to show off a world-class collection of Islamic treasures and explore their wider significance.

The U.N. General Assembly is underway this week, and the global development community has descended upon New York en masse. Impact bonds are just one example of outcome-based financing, where private investors provide upfront capital, repaid conditional on the achievement of pre-determined metrics. Although evidence is sparse on the relative merits of this mechanism, millions of dollars are being invested in their design and implementation.

Group Chief Executive Officer at Kuwait Finance House(KFH), Mazin Saad Al-Nahedh, emphasized that KFH-Turkey enjoys robust financial position and very strong liquidity ratios as per the regulatory authority’s requirements in Turkey and Kuwait, not to mention as per the international standard Basel III.

Policymakers around the world have upped the pressure on libra, the digital currency being introduced by Facebook, amid concerns it could heavily disrupt the global financial system. It appears to be a running theme from a number of regulators and lawmakers, who worry libra would compete with government currencies. That’s because Facebook is such an influential platform, with more than 2.4 billion monthly active users as of July 2019.

Money managers poured into the Gulf region till Saturday’s unprecedented attack on Saudi Arabia’s key oil facilities. That drove record gains for bonds in August as they sought refuge in securities boasting an average credit score of A+ amid global trade tensions. According to a Bloomberg Barclays index, Saudi Arabian bonds handed investors the biggest loss, about triple that of Qatari securities. The strikes in Saudi Arabia could escalate into a showdown, with the kingdom and U.S. on one side, and Iran and proxy groups from Yemen to Lebanon, on the other. Iranian-backed Houthi rebels in Yemen claimed responsibility for the assault and warned that oil installations in the Arab nation remain a target.

The Islamic Foundation for Environmental and Ecological Sciences, the Mosques and Imams National Advisory Board and the Bahu Trust released a statement calling on Muslims to pull investment from the oil and gas sector. The three organisations said it was time the Muslim community stood firmly with those committed to action on climate change. They suggested that investment funds be shifted to renewable energy solutions, low-carbon transport and sustainable food sources. The leaders of the three Islamic groups added that the investment in cleaner energy was vital for a sustainable future. They also added that the need to realign oil and gas finances was in keeping with Islam’s ethical values.

The Musée du Louvre officially opened new and expanded spaces to explore Islamic art with the support of Alwaleed Philanthropies. The new exhibition space offers visitors an immersive introduction to Islamic art. The center showcases a diverse range of art and artifacts stretching from Spain to India and explains the evolution of Islamic art in style, form and medium. Louvre President Jean Luc-Martinez hopes to reach even more visitors, and provide them the keys to understanding the wonderful artistic heritage. The new and expanded spaces for exploring Islamic art has been designed to offer full disability access and includes a series of interactive displays.

Dubai International Financial Centre’s FinTech Hive has announced the commencement of the 2019 edition of its accelerator programme. The third edition of the programme received an overwhelming response of over 425 applications from across the world. Finalists include 15 start-ups specialising in the FinTech sector, four specialising in the Islamic FinTech sector, ten in the InsurTech sector, and two in the RegTech sector. The accelerator programme consists of a three-month curriculum in which a group of selected finalists work closely with stakeholders to address the needs of the region. The programme will culminate in an 'Investor Day', offering the participating start-ups an opportunity to showcase their achievements to prospective investors.

Turkey’s Takasbank launched its blockchain-based electronic platform for trading gold called BiGA. The project aims to enable people to transfer physical gold stored at the Borsa Istanbul Stock Exchange via digitized gold units on a blockchain. Although the units will have the same form and function as physically backed stablecoins, their value will be tied to the traded goal. The bank will provide users with a wallet to store the tokens, and BiGA can eventually be used as an e-commerce payment option. Notably, the word “BiGA” is the Turkish abbreviation for one gram of gold. Earlier this week, New York-based Paxos Trust Company has launched PAX Gold, a gold-backed Ethereum token, with approval from the New York State Department of Finance Services. One PAXG token will be supported by one fine troy ounce of London Good Delivery gold stored in professional vault facilities in London.

Switzerland-based fintech company Jibrel Network announced the launch of Jibrel.com after its recent acceptance into the new ADGM (Abu Dhabi Global Market) RegLab cohort in the UAE. Jibrel.com claims to be the first fully regulated blockchain-powered private financing platform. Jibrel’s purpose is to foster open financial systems and digitization powered by emerging technologies. Its mission is to tokenize an array of assets in a manner that is borderless, asset class agnostic and customizable for different use cases. The new platform will enable investors of all genres to connect with startups and SMEs, creating new capital formations. Talal Tabbaa, co-founder and COO of Jibrel believes this platform will transform the MENA startup ecosystem by providing access to a broader investment base, so that startups will raise more liquidity, and spur the growth of the sector further in the region.

The Islamic Development Bank (IsDB), the Islamic Solidarity Fund for Development (ISFD) and the United Nations Development Program (UNDP) have organised a two-day meeting in Istanbul. Several managers from organizer institutions are giving speeches on many issues such as saving children, poverty in Africa, socio-economic issues, Islamic and alternative finance, innovation and blockchain opportunities and partnership with the private sector. Gerd Trogemann, the manager of UNDP's Istanbul Regional Hub, stressed that all partners have to work together for bringing solutions to development challenges. The partners should go beyond organizational borders and build networks and platforms of partnerships, as each partner has different levels of reach, approaches and solutions.

The Chevening Oxford Centre for Islamic Studies (OCIS) Fellowships are aimed at mid-career academics or professionals who are dedicated to a more informed understanding of the culture and civilisation of Islam and contemporary Muslim societies. Chevening OCIS Fellowship and Chevening OCIS Abdullah Gül Fellowship are a collaboration between the UK Foreign & Commonwealth Office and OCIS. The fellowship programmes will commence in October 2020. Fellows will need to develop their own research project to focus on during their fellowship prior to arriving in the UK. The Chevening OCIS Abdullah Gül Fellowship is available to applicants from Turkey. All applications for a Chevening Award must be made through the Chevening designated online application system (OAS), which can be accessed through www.chevening.org.

Blockchain firm R3 has partnered with Dubai-based startup Wethaq to bring blockchain technology to the Islamic finance market. According to R3 CEO David Rutter, blockchain is driving an unprecedented period of innovation across capital markets, with more assets moving towards complete digitisation. Wethaq’s platform-as-a-service offering will use R3’s Corda enterprise blockchain infrastructure to digitise the pre-sale issuance, management and financing of sukuk securities. Interest in using blockchain technology for Islamic finance has increased in the last 12 months. Abu Dhabi-based Al Hilal Bank claimed to be the first firm to execute a sukuk transaction via the blockchain back in November 2018.

According to a Bangladesh Bank survey, the major barriers to accessing finance in the country are minimum balance requirement, low income, staff attitudes, lack of physical access and high cost of products. Other factors like inadequate financial literacy, lack of proper documentation, lack of initiatives of banks and financial institutions, low level of technological infrastructure, lack of suitable product structure of banks, opportunity cost and high cost of products are also acting as hindrances to access to finance. In Bangladesh a large number of the adult population still remains financially excluded. The major barrier is geographical or physical access measuring the average distance from households to bank branches. Bangladesh has less than seven branches (or ATM) per 100,000 population and about 67 branches (or ATM) per 1,000 square kilometre.

Saudi Arabia’s Ministry of Finance has warned against dealing or investing in digital currencies including cryptocurrencies as they are not recognised by legal entities in the Kingdom. The finance ministry stated that digital currencies are outside the scope of the regulatory framework and are not traded by financial institutions in Saudi Arabia, adding that such cryptocurrencies have been associated with fraudulent activities and attract suspicion. The use of Saudi Arabia’s name, national currency or emblem by any entity for digital currencies marketing will be subject to legal actions.

China’s Belt and Road Initiative is expected to spur further development in Islamic finance around the world. Many of the countries along the infrastructure belt are home to predominantly Muslim populations, including Central Asian countries such as Kazakhstan and Uzbekistan. The China-headquartered Asian Infrastructure Investment Bank had already signed a memorandum of understanding with the Islamic Development Bank to collaborate on various areas including Islamic finance development. Sukuk issuance had grown strongly in 2017, but Chinese issuers have actually pulled away since then. That’s been attributed to the complexities involved, particularly as standards differ across regulatory regimes with varying interpretations of Sharia compliance. Still, financial links between China and the Middle East continue to grow. The relationships have increasingly moved from just trade partnerships to joint ventures.

Global consulting firm McKinsey is warning that signs of an Asian debt crisis are "ominous". Increased indebtedness, stresses in repaying borrowing, lender vulnerabilities and shadow banking practices are some of the concerns. McKinsey examined the balance sheets of more than 23,000 companies across eleven Asia-Pacific countries, and found firms in most of Asia face "significant stress" in servicing debt obligations. In countries such as China and India, those pressures have risen since 2007, while falling sharply in the U.S. and U.K. during the same period. Since 1997, financial regulators have put in place safeguards to prohibit a repeat of the crisis that engulfed Asian nations. Potential triggers of a crisis that need to be monitored include defaults in repayment of debt, liquidity mismatches, and large fluctuations in exchange rates, according to McKinsey.

Kuwait Finance House-Bahrain (KFH-Bahrain) has announced going live with advanced open banking infrastructure, which will allow it to partner with innovative fintech firms. The kingdom is one of the earliest global adopters of mandatory open banking, putting it at the vanguard of customer-driven change in financial services. KFH-Bahrain is one of the first banks to integrate a fintech through the launch of its KFH Jazeel banking platform in partnership with Tarabut Gateway, a subsidiary of Almoayed Technologies. According to KFH-Bahrain executive manager Mohammed Fahmi Hamad, open banking will allow bank account holders to consent to sharing details of their accounts and payments history to licensed third-party providers to make more aware financial decisions. In addition to that, customers will soon be able to link their accounts to independent licensed applications.