IslamicFinance.de

It’s simple. No interest on investments but the lender and borrower share the returns.
This form of financing, known as Islamic finance, confronts the lifelong convention in finance of receiving interest on a loan.
The global financial system depends on the founding concept that money itself is a commodity that needs not be invested into an underlying commodity to have value. That said, money can be leveraged to create greater returns through the application of derivatives. Critics artfully label these leveraged and speculative winning, or more euphemistically, returns making money out of nothing. This can ultimately have catastrophic results.
Islamic finance theoretically eliminates the speculative nature of conventional finance. In prohibiting the “unjustified enrichment” and “speculation or excessive risk,” Islamic scholars pushed three principles:
Prohibition of interest.
Profit and loss sharing (riba).
No speculation (gharar).

Jaiz Bank Plc, Nigeria’s sole Islamic bank has announced the appointment of Mahe Abubakar as the acting Managing Director/CEO of Jaiz Bank Plc.
Until his appointment, Abubakar was an Executive Director in charge of Business Development.
A statement from the Head, Corporate Communications Department of the Bank, Idris Salihu said Abubakar is taking over from Muhammad Nurul Islam, whose two-year contract ends on the 17th of November, 2015.
Salihu said the Board expressed gratitude to Islam for his innumerable contributions towards the growth and success of Jaiz Bank Plc in the last two years.
Nurul Islam joined Jaiz Bank in November 2013 and turned it around from a negative balance-sheet to a positive result in 2014. “He came in on a Technical Agreement Jaiz Bank has with the Islamic Bank of Bangladesh to train and put the staff of Jaiz Bank through Islamic Banking because of their long experience in the subsector” the statement said.
Jaiz Bank is now operating in 21 locations from the 10 locations he met. Under Islam’s leadership, Jaiz also obtained Approval-in-Principle for a license from the Central Bank of Nigeria to operate nationwide.

Markets across Africa now offer a world of exciting growth opportunities, with experts projecting that 7 out of the 10 fastest growing economies in the world will be in Africa. Djibouti is rapidly becoming an important hub for Islamic finance in Africa, with strong support coming from the President.
The Central Bank of Djibouti is leading the way in terms of driving the practical legal and regulatory framework. Djibouti's strong commitment to Islamic finance is further cemented by its drive to connect with memberships in important international industry organizations, such as the Islamic Financial Services Board and the General Council for Islamic Banks and Financial Institutions.

Professor Badr El Din A. Ibrahim, President of the Microfinance Unit at the Central Bank of Sudan, discusses ways to implement Shari'ah-compliant microfinance. There are some options to introduce it in the existing conventional microfinance institutions (MFIs). Hence, separate windows for conventional MFIs, not banks, are necessary to extend interest-free finance. Challenges for the Islamic windows-based business model are Shari'ah compliance and the need for changing regulatory requirements to allow for this model. The choice of Islamic windows requires raising new capital exclusively for the window.

The Islamic Research and Training Institute (IRTI) of the Islamic Development Bank Group has launched the Islamic Social Finance Report 2015, which is the second edition in the series. This edition of the ISFR focuses on the Sub-Saharan Africa, outlining the regional trends and prospects as well as proposing policy recommendations for the Islamic social finance sector, which includes zakah, waqf and Islamic microfinance. It analyzed the regulatory environments and practices in six selected countries, namely Sudan, Nigeria, Kenya, Mauritius, South Africa and Tanzania.

Ambassador Adamu Babangida Ibrahim, a banker, has served as Nigerian Ambassador to the Syrian Arab Republic and the Republic of Guinea. Ambassador Ibrahim is the pioneer Director-General, Jaiz Charity and Development Foundation, a charity arm of the Jaiz Bank. Jaiz Foundation uses the income that the bank cannot recognise under their profit and loss as Halal income for charity purposes. These monies are supposed to be used for charity and development purposes for interventions, especially in the poor and underserved people for economic empowerment, for intervention in health, education and so forth.

Islamic banking has gradually been making inroads into the Nigerian banking system. But as a renowned Islamic finance and risk management expert and Registrar of the Islamic Institute of Accounting and Finance in Nigeria (IIAF), Dr. Busari Shaamsuddeen Akande said, there are grey areas in the strict practice of Islamic banking. Islamic banks, Dr Akande asserts, suffer from an identity crisis in practising the system. He delivered the paper titled, “Ethical Challenges and Product Innovation Crisis for Islamic Banks”at the South-South Summit on Islamic banking. The underlying fact of the paper is that the major crisis is that Islamic banking products are modelled after existing conventional bank products.

First National Bank (FNB) is looking to expand its Islamic banking offering to Zambia and Tanzania before the end of its financial year in June next year. FNB, which has been on an expansion phase in select countries in the rest of Africa, is looking to use the Islamic banking offering to capture clients, especially in those countries that have big Muslim communities. Amman Muhammad, the CEO of FNB Islamic Banking, said that in sub-Saharan Africa there were about 280-million Muslim people and the FirstRand group had a presence in countries that had about 200-million Muslims. The bank already offers Islamic banking in Botswana.

An Islamic Investment Fund has been launched in Kumasi with the objective of reviving economic activities within Muslim communities. The Shari’a complaint financial system is to mobilize funds from the Muslim Ummah for development, whilst creating jobs for the teeming youth in need of jobs. The Fund is initiated by the Ahlussunna WalJama’a Ashanti Regional Imam (ASWAJ) to offer “ethical investment” tools to investors seeking to invest in profitable “halal” business ventures which have minimal risk but good potential for growth. A Gh100,000 is to be raised in the initial public offering of 200 shares at a share value of Gh500 per share.

The opening of the Islamic financial services (IFS) sector in Ghana is expected to create new financing and lending opportunities in the coming years, with sharia-compliant banking offering particular potential in the retail and small and medium-sized enterprise segments. In Ghana there is currently just one sharia-compliant financial institution – Ghana Islamic Microfinance, which began as an NGO – though there is significant scope for growth. The Bank of Ghana (BoG) may be preparing to issue the country’s first licence for a sharia-compliant bank in late 2015 or early 2016, with an accompanying reform to the regulatory framework also expected to be implemented.

The International Islamic Banking Summit Africa will take place on November 4-5 in Djibouti. The conference will convene international industry leaders to boost economic development and facilitate greater trade and investment flows between Africa and the OIC markets through Islamic finance. It has a format spread over 2 days and will be officially inaugurated on the 4th of November with special keynote addresses by Ahmed Othman, Governor of the Central Bank of Djibouti; Abdelrahman Hassan Abdelrahman Hashim, Governor, Central Bank of Sudan; and Ijlal Alvi, Chief Executive Officer, The International Islamic Financial Market (IIFM).

The Lord Mayor of the City of London, Alderman Alan Yarrow has urged Nigeria to consider all sources of finance as a means for attracting investment. In particular the Mayor during a trip to Nigeria was keen to highlight the City of London as a leading centre for Islamic finance and stated Islamic finance can provide substantial investment for Nigeria. He suggested the North of Nigeria would in particular benefit from Islamic financial products. Yarrow who met with financial sector regulators and operators in Abuja last week, said London had the capacity to help Nigeria to deepen its Islamic financial system.

Kenya is set to host the first East Africa Islamic Finance Summit (EIAFS2015) that will be held on December 14th at Nairobi’s Villa Rosa Kempinski. The Cabinet Secretary for Treasury Henry Rotich will give a presentation on Kenya’s role in developing East Africa as an Islamic Finance investment destination. The summit themed “Unveiling opportunities”, aims to initiate dialogue, build network between East Africa’s financial institutions, policy makers and the Islamic Finance institutions in the region and the Middle East. Experts in Islamic Finance will discuss the development of Islamic Finance in East Africa, explore infrastructure projects in the region and discuss alternative opportunities for project and trade finance for both public and private sector projects.

The Securities and Exchange Commission and the City of London on Tuesday pledged to work together to deepen Islamic finance in Nigeria in order to bring financial inclusion to Nigerian Muslims and non-Muslims averse to traditional financial system and products. The Lord Mayor of London, Mr. Alderman Yarrow said London with six Islamic banks and another 20 lenders currently offering Islamic financial products and services had the capacity to help Nigeria to deepen its Islamic financial system. Meanwhile, the commission is considering modalities for setting up a Sharia advisory council as a body of experts to advise it on non-interest product applications.

Muhammad Islam, the managing director of Jaiz Bank Plc, has assured the bank's shareholders that it will declare dividend from the 2017 financial year. He said Jaiz, which started operations in 2012, was able to break even within three years because of its adherence to regulatory requirements. He explained the bank has three major categories of operations. The number one category is trade mode – that is buying and selling. Jaiz buys goods at the request of a customer and sells it to the customer adding our own profit margin. The profit margin is the bank's returns. On the outlook for the Bank, Islam said the bank wants to implement the vision of the directors of the bank not only to go national but internationally. That means in the entire West African region and beyond.

When Senegal issued a 100bn CFA franc ($168m) sovereign Islamic bond in June 2014, it beat economic giants Nigeria and South Africa to market and began a race to create a hub for Islamic finance in Africa. Senegalese officials are optimistic about the country's prospects. There is an Islamic bank in Senegal, the Banque Islamique du Sénégal. Alioune N'Diaye, the finance ministry's director for money and credit, also emphasized the good relationship with the Islamic Development Bank (IDB). With a gradual readjustment of tax and other laws to be able to accommodate sharia-compliant financial instruments and growing ties with Gulf states, Senegal could become a prime destination for Arab investors who are looking for higher returns on their money.

The Nigeria Deposit Insurance Corporation (NDIC) has urged the management of Jaiz Bank to embark on public awareness and financial education on the benefits of non-interest banking practice to attract more customers. Alhaji Umaru Ibrahim, NDIC's managing director, informed the team that the corporation had developed a non-interest banking deposit insurance fund framework in May. He said that the framework was designed to create a level playing field and provide deposit protection for depositors involved in non-interest banking and protect them against any possible losses. In addition, he said that the corporation was in the process of appointing committee of experts to advise it on all issues relating to Deposits Insurance Scheme (DIS) for non interest banking.

Central Bank of Nigeria (CBN) has granted a na­tional licence to Jaiz Bank and a waiver on the reduc­tion of its liquidity ratio from 30 per cent to 10 per cent. The licence will enable Jaiz Bank operate in any part of the country. The Managing Director and Chief Executive of Nigeria Deposit Insurance Corporation (NDIC), Al­haji Umaru Ibrahim, informed that the corpo­ration had developed a non-interest banking deposit insurance fund framework in May 2015, in order to provide depos­it protection for depositors involved in non-interest banking, in addition to training its staff in Malaysia in this area of banking. The NDIC was in the process of ap­pointing a committee of experts to advice it on all is­sues relating to Deposits Insurance Scheme (DIS) for non-interest banking, he added.

The Bank of Ghana is in the process of licensing Islamic Bank, which is expected to provide interest free loans to its customers across the country. The Central Bank Governor, Dr Henry Kofi Wampah, told journalists at a press conference in Accra that the Banking Supervision Department of his outfit is working assiduously to issue new banking licenses to Islamic Bank, as well as the Ghana Armed Forces Bank by the close of the year. Research from Lotus Capital Limited in Nigeria shows there is a growing appetite for Islamic finance as approximately 30 per cent of the Muslim population around the world would be interested in Islamic finance. Nevertheless, the operations of Islamic banks give rise to a unique set of risks, in addition to the standard risks associated with banking activities.

The Islamic Corporation for the Development of the Private Sector (ICD) and the Regional Council for Public Savings and Financial Markets (CREPMF), Regional Financial Market Regulatory Body of the West African Economic and Monetary Union (WAEMU) zone sign a partnership and cooperation agreement to promote Islamic finance in the WAEMU sub-region. The goal is to help mobilize long-term resources of the Union Member states and private sector companies, especially SMEs. The agreement covers the cooperation, the exchange of information, the development of the regulatory framework in order to create an enabling environment for Islamic finance, and the sharing of experiences and expertise of both institutions in the agreed areas.