IslamicFinance.de

Despite the worldwide domination of a few credit rating agencies, two not-for-profit rating providers announced their alliance. The agencies are Wikirating and Public Sector Credit Solutions (PSCS). They both use crowdsourcing techniques, thus aiming to improve credit ratings. Wikirating employs a technology similar to that of Wikipedia in order to gather and aggregate information and views about credit quality for multiple categories of bonds. PSCS has provided an open source software tool which is used to calculates default probabilities for government bonds. It also has fully transparent sample models and data sets.

The practitioners report “Believers in the Boardroom. Religious Organisations and their Shareholder Engagement Practices” by 3IG is online. Please access the practitioners report by clicking on the following link :

http://issuu.com/3ignet.org/docs/3ig_rse_practitioners_report_final_2012...

The report also remains available as hard copy: http://www.3ignet.org/documents/OrderRSEresearchnow.pdf

New York, November 16, 2012: International development leaders and experts highlighted the importance of Zakat in advancing global development at a forum titled "Linking Muslim Giving to the MDGs". The forum was co-hosted at the United Nations headquarters by the Organization of Islamic Cooperation (OIC), The World Congress of Muslim Philanthropists, and the UN Millennium Campaign.

"While some countries have made impressive gains in achieving Millennium Development Goals (MDGs), others are falling behind. The Muslim world is no exception. Faith emphasizes building communities, sharing wealth and upholding the rights of the poor and marginalized. Faith-based giving such as Zakat which amounts to billions of dollars needs to be spent in more strategic and effective way to accelerate development in OIC member countries” stated Ambassador Ufuk Gokcen, the permanent observer of OIC at the United Nations, in his address.

Dear Reader,

The issue of debt vs. equity is now going to be increasingly recognised - in microfinance - as I found out today on the cfi blog:

"Debt to Equity. The demand for equity and subordinated debt is huge and continuing to grow, mainly coming from mature MFIs. More MIVs are moving away from debt toward equity, being driven in part by a desire to be more involved in governance, to play a larger role in risk management, and because the regulators are requiring more capital. Also, fund investors increasingly want to know how much of a fund’s return is coming from debt versus equity. Some of the larger DFIs need to disburse large amount of funds, so they have to make debt investments, leaving an unmet demand for equity."

http://cfi-blog.org/2012/11/19/microfinances-new-normal/

An important food for thought beyond microfinance itself in my opinion.

Best regards,

Michael Saleh Gassner

Well, repeatedly we read and hear about the lack of profit/loss sharing (equity finance) in Islamic finance. Here my five cents about it:

1) Islamic commercial law, Fiqh Muamalat, per se has no preference of either permissible mode of finance, be it musharaka, ijara or murabaha whatsoever. All is halal. However, the call for modesty of debt in many hadith and the seriousness of being indebted upon death (withholding of death prayer) shows a call for a solid equity portion in business; let's call it a technical preference.

2) If we look up all debt financing modes (e.g.Murabaha, Ijara) there are remaining difficulties to finance wages, rents and installments on fresh debt. This is a true indicator for a required minimum amount of equity in a company.

3) Point 1) and 2) leads us to demand a sound debt/equity ratio.

IslamicFinance.de offers an overview about new job openings of October 2012 herewith - firms aiming to be included please send a job profile/hyperlink to newsdesk@islamicfinance.de - the full details of the advert has to be accessed by the hyperlink below the brief description:

Product Manager, Islamic Banking

Standard Chartered Bank - United Arab Emirates-SCB (United Arab Emirates)
Job Description
?Development of Islamic wealth products across CBMS, insurance and investment streams to create customer value proposition.
?Ensure successful implementation of the Islamic banking strategy across high value segment.
?Concentrated responsibility to work with the Priority/Wealth/Private/SME product/frontline teams and support functions to build on the current Islamic banking capabilities and to create seamless customer experience
?Act as a product specialist for RMs on client meetings to introduce and explain the Saadiq solutions to meet their needs
?Financial budgeting and business forecast. Evaluation of financial performance.

THE NINTH INTERNATIONAL CONFERENCE ON
ISLAMIC ECONOMICS AND FINANCE (ICIEF)
Growth, Equity and Stability: An Islamic Perspective
10-12 September 2013, Istanbul, TURKEY

The Ninth ICIEF at a Glance

Recovery from the global financial crisis and subsequent economic downturn remains fragile. Persistent risks to financial and economic development include sluggish growth in developed countries – which is now spilling over into developing economies as well; increasing income and wealth inequalities; and still-unrestored financial, economic and political stability in many regions. High poverty and unemployment rates, large macroeconomic imbalances, deteriorations in sovereign credibility, increasing food price volatility and food shortages, and lack of access to basic infrastructure further intensify and magnify these risks – particularly for the underprivileged segments of the world population. As a result, for many countries it has become even more challenging to achieve the Millennium Development Goals (MDGs) set by the United Nations.

Islamic Finance Project
Islamic Legal Studies Program
Harvard Law School

Shari'a-Compliant Home Financing in the United States

A panel discussion featuring

Yusuf Talal DeLorenzo
Shari'a Consultant, Malfa Inc. Dubai, United Arab Emirates

Panelists:
Shahab Ahmed (Moderator)
Custodian of the Two Holy Mosques, Visiting Associate Professor of Islamic Legal Studies, Harvard Law School

Thomas Gainor
Senior Vice President and General Counsel, Guidance Residential, LLC, Reston, Virginia

David Loundy
Chairman of the Board of Directors, Devon Bank, Chicago, Illinois

Intisar A. Raab
Visiting Associate Professor of Islamic Legal Studies, Harvard Law School

Monday, October 29, 2012, 4:00 - 7:00 p.m.
Austin Hall North, Harvard Law School

For more information, contact Islamic Finance Project at
617-496-2296 or 617-496-2297 or ifp@law.harvard.edu

S. Nazim Ali, Ph.D.
Director, Islamic Finance Project &

In conjunction with 67th Session of UN General Assembly

Linking Muslim Giving to MDGs

November 2, 2012 10:00 a.m. - 1:00 p.m. UN Headquarters, NY

A convening of leading Muslim grantmakers and nonprofit organizations to critically examine the status of Millennium Development Goals (MDGs) in the Muslim countries as well as to discuss the potentials for developing strategic approaches in faith based giving to meet the financial resource gaps required to meet the MDGs in these countries. The event will also serve as a forum for initial dialogue among participants on how Muslim philanthropic organizations can engage in the formulation of the post 2015 framework; contributing both to the formulation process as well as in the implementation, monitoring and evaluation.

Participation by invitation only - Contact: info@thewcmp.org

The key outcomes of the event will be to provide increased focus to the importance of faith-based giving, which is crucial to accelerate the MDGs in OIC member countries.

The activity is expected to:

Definitions of impact investment vary, but they have some features in common: impact-focused entities as target and financial return lower than market rate. Impact investing is becoming increasingly important as inequality worldwide grows. It is a means of bridging the gap between donor-reliant philanthropy and the estimated $100 trillion in opportunity currently in for-profit capital markets. Impact investing is a combination of socially conscious values and the competitive nature and demand-drive of the market.

Read more on: http://whereintheworldisdana.wordpress.com/2012/10/15/attention-impact-i...

The promotion of creativity and innovation to drive change through social investment and the empowerment of women, were the main topics of the 8th Annual Clinton Global Initiative that was concluded on September 26 in New York. As a result of discussions more than 150 new commitments to alleviate global poverty, create a cleaner environment and increase access to health care were announced. In the course of the conference, the former US president Bill Clinton had awarded six personalities for their outstanding contribution to solving global problems.

See more under: http://www.microcapital.org/microcapital-brief-8th-annual-clinton-global...

After a seven-year string of losses, the US-based Shariah Capital will delist from London's Alternative Investment Market (Aim). According to the hedge fund manager, a cancellation of the shares will be sought. The company expressed its opinion that cost of maintaining the listing, which is US$300,000 per year, is better spent elsewhere.

According to a report from Philanthropy Management magazine, small and mid-sized philanthropies increasingly decide on a single outscourced chief investment officer (CIO). However, it os often discussed on an industry level what influence and liability such a CIO should have. There are differences between industry investors which is why some industry aggreement is sought in regard of the best way to apply this kind of strategy and regarding discretion over investment decisions.

SmartyPig, a conventional concept to promote savings, which was founded in 2008, has used a combination of social networking and banking to reach its mission: The company encourages people to save for specific goals and, so far, it has helped people reach almost $3 billion in savings goals. In an online account a goal for a specific purchase is set. The money transfer to this account can be completed automatically. After that, through social media such as Facebook and Twitter, friends and family members have the opportunity to make their contribution to the goal. After reaching the amount dedicated retailers offering discounts for those doing savings.

The National Commercial Bank has recently cooperated in the Islamic Finance Forum coordinated by Harvard University in the United States of America. The forum is a praised annual event that gathers top scholars, researchers and analysts, with economists and industry leaders in Islamic Finance from around the world.
Being at its tenth session this year, the forum's agenda was centered on discussing the role of Islamic finance in the global economic development, underlining the latest challenges facing the growth of the industry and defining the competitiveness and opportunities inherent in Islamic finance as a potential alternative for the conventional financial system.

Who will be the first Islamic financial institution to become signatory of the Natural Capital Declaration? "The Natural Capital Declaration is a statement by the financial sector demonstrating our commitment at the Rio+20 Earth Summit to work towards integrating Natural Capital criteria into our financial products and services for the 21st century.

Through it we wish to acknowledge and re-affirm the importance of Natural Capital in maintaining a sustainable global economy, and call upon the private and public sectors to work together to create the conditions necessary to maintain and enhance Natural Capital as a critical economic, ecological and social asset.

Natural Capital comprises Earth's natural assets (soil, air, water, flora and fauna), and the ecosystem services resulting from them, which make human life possible. Neither these services, nor the stock of Natural Capital that provides them, are adequately valued compared to social and financial capital. Despite being fundamental to our wellbeing, their daily use remains almost undetected within our economic system. Using Natural Capital this way is not sustainable.

The International Islamic Financial Market (IIFM) and the International Swaps and Derivatives Association, Inc. (ISDA) are pleased to announce the launch of the ISDA/IIFM Mubadalatul Arbaah (Profit Rate Swap) product standard to be used for Islamic hedging purposes.

The Mubadalatul Arbaah (MA) standard follows on from the “ISDA/IIFM Tahawwut (Hedging) Master Agreement” and provides the industry with a framework for Islamic risk mitigation. The launch of the Tahawwut Master Agreement as the template for Shari’ah-compliant risk management was officially announced at a press conference hosted by Central Bank of Bahrain in March 2010.

Dear Reader,

IslamicFinance.de is privately funded for many years. Now, for the first time, you have the possibility to make a contribution, from one Dollar upwards!

The technical details, and the money transfer via paypal is organised by Kapipal a new online fundraising tool:

http://www.kapipal.com/islamicfinance

On the blog I gave some more thoughts about Islamic finance media for those interested: http://www.islamicfinance.de/?q=node/3454

Please also note: The fundraising action has a deadline, so act today, not tomorrow and tell your friends about it!

All donors who will leave a message will be listed in the article, which follows after closure of the fundraising period.

I am happy to meet you in person either on 19th March in Milano (http://www.islamicfinance.de/?q=node/3396) or on 10th May in Frankfurt (http://www.islamicfinance.de/?q=BAFINII) at the respective Islamic finance conference.

Wa at Taufiq min Allah, all the best,

Michael Saleh Gassner

Dear Readers,

Islamic finance media are a tricky service. This is true for various reasons: The Internet eats up the revenues, because everything ought to be free. Islamic banks are still a niche phenomena, and international banks like UBS or Deutsche are almost as large as the entire global Islamic finance industry. Consequently the marketing budgets are much lower, too.

Last not least, who should advertise? The banks among themselves or to the clients? Advertising from bank to bank, does usually not make much sense, but real client oriented formats are hard to find, too. May be this is a niche. Others, who could finance Islamic finance media are basically the service providers to the banks, but due to the limited number of Islamic financial insitutions, direct marketing, e.g. face to face meetings will be preferred.

This in short is the background why Islamic finance media are not so well established in terms of journalism and research, but mostly reflecting the press release as criticised by the makers of the Islamic Globe. See: http://www.theislamicglobe.com/index.php?option=com_content&view=article...

Mr. John Robertson Wright was appointed Non-Executive Director of EIIB by the Board of EIIB.
Mr. Wright is a career Banker with important experience in UK and international markets including assignments in India, Sri Lanka, West Africa, Canada, Hong Kong and the United States. Before this appointment he was Chief Executive of Oman International Bank for 7 years, Chief Executive of the Northern and National Irish Banks in Ireland for 5 years, Chief Executive of the Gulf Bank in Kuwait and finally Chief Executive of Clydesdale & Yorkshire Banks prior to retirement.