IslamicFinance.de

Kenya plans to create an enabling regulatory framework to boost Sharia financing in the country. The country's Capital Market Authority is holding a workshop in Nairobi. Islamic finance, which follows religious principles such as bans on interest and gambling, is currently offered by two full-fledged Islamic lenders in Kenya - Gulf African Bank and First Community Bank.

Jaiz Bank Plc has introduced some specific small and medium enterprise (SME) products to empower small-scale businesses and teeming customers in the grassroots. Unveiling its corporate products and services at the on-going 35th Kano International Trade Fair at the weekend, Jaiz Branch Manager, Mallam Mansur Imam pointed out that besides its conventional products like savings account (Mudaraba), lease and acquisition finance (Ijara-Wa-Iqtina) and corporate and trade financing (Murabaha), the SME was uniquely conceived to finance market driven products and encourage growth of local enterprise.

Bahrain-based Ibdar Bank successfully concludes the structuring of a 12-year agreement expiring in 2026 for acquiring four brand new Bombardier Q400 Next Gen aircrafts and leasing them to the Ethiopian Airlines. The agreement that was structured under a joint venture with Dubai-based operating lessor Palma Holding, includes options for an additional four Q400 NextGen aircraft, which Ibdar Bank intends to exercise in the near future. Valued at USD 100 million, Ibdar Bank contributed as investor with USD 22 million, while an amount of USD 78 million was secured through a funding agreement with Canada’s Export Credit Agency “EDC”.

Kenya will issue its debut sukuk in the next financial year, not this one as some had expected, after it opted to borrow an additional $750 million from its maiden $2 billion Eurobond issued in June. Parliament is set to consider a recommendation by its finance committee to double the government’s external debt ceiling to $28 billion to fund the construction of a newrailway, port, roads and power plants. Henry Rotich, the cabinet secretary for the Treasury, said the re-opening of the Eurobond, which is expected to be completed on Wednesday, had given the government time to prepare the documentation for the sukuk issue. He said it would be issued in the finiancial year in the financial year ending June 2016.

Muslims in Nigeria have canvassed a good government policy that would promote affordable housing for the citizenry.ome group of Muslim businessmen and other professionals who gathered at the 2014 National Conference organised by The Companion, in Ibadan recently, advised Muslim organizations to join hands in tackling their peculiar challenges and assist members to secure affordable shelters. The gathering resolved that Nigeria’s massive housing deficit may further degenerate until governments and real estate private developers turn their focus to mass housing as a sector priority rather than the present proliferation of luxury estates.

Investment firm Kurwitu Ventures Limited has become the first Sharia-compliant firm to list at the Growth Enterprise Market Segment of the Nairobi Securities Exchange. The company has listed 102,272 shares by introduction at the GEMs making it the third company in Kenya to list on this segment. The others are real estate firm HomeAfriKa and Flame Tree Group, a cosmetics and water tanks manufacturing outfit. Kurwitu provides investment products and services that are based on Islamic laws on finances.

Nigeria’s aim to be a hub for Islamic finance is failing to materialise as a shortage of skilled and knowledgeable operators and lack of products combine to slow the sector’s take-off. There are very few professionals, such as lawyers and accountants who are conversant with Islamic Finance. Moreover, liquidity management in the country's industry is also a big problem, due to a lack of products. In 2013, the Nigerian Securities and Exchange Commission (SEC) established a Non-Interest Capital Market 10-year Masterplan Committee, to develop strategies to foster the Sharia compliant sector. Although there has been some progress, activities in the sector are way below potential.

No doubt, the CBN guidelines on non-interest finance have been long awaited due to the fast growing scale and demand for Islamic banking globally. However, there is a need for a more codified regulatory framework and guidelines by the Securities and Exchange Commission aimed at promoting future sukuk issuance and protecting investors’ interest. The regulatory framework should also provide for increased but regulated licensing requirements for Islamic fund managers, provisions for corporate governance, enhanced operational standards, enterprise-wide risk management, accounting, audit and disclosure requirements, advisory council of experts requirement, rendition of periodical regulatory return on Shariah compliance and prudential guidelines relating to fund reserve, liquidity ratio and provision for asset losses.

Nigeria's Jaiz Bank Plc has financed an executive aircraft as part of its programmes to venture into the aviation sub sector. The aircraft, which has been delivered to the customer, Aviation Resource Service Limited, was financed under the bank’s Ijarah wa iqtina. Under this model, the bank and the Aviation Resource Service Limited are co-owners of the aircraft based on a partnership arrangement whereby ownership is gradually transferred to the customer as it pays down. The general manager of Aviation Resource Service Limited, Tanko Yakubu, said that the company was a little bit skeptical at the initial stage of their discussion with Jaiz Bank but were proven wrong.

Leaders of global and regional institutions pledge political support and major new financial assistance for countries in the region, totaling more than $8 billion over the coming years. UN Secretary-General Ban Ki-moon, the World Bank Group (WBG) President, Jim Yong Kim, as well as the President of the Islamic Development Bank Group and high level representatives of the African Union Commission, the European Union, the African Development Bank, and Intergovernmental Agency for Development (IGAD) are combining forces to promote stability and development in the Horn of Africa. The initiative covers the eight countries in the Horn of Africa -- Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan, and Uganda.

Dear Reader,

Please visit the following sites to see the latest updates in the Islamic finance job market:

http://www.islamicfinancejobs.com/

http://www.bayt.com/en/international/jobs/q/islamic-finance/

https://www.linkedin.com/jobs/search?keywords=Islamic&locationType=Y&ori...

http://www.naukrigulf.com/islamic-finance-jobs

https://www.gulftalent.com

http://www.gulfbankers.com/home/index

http://www.efinancialcareers.ch/search?keywords=islamic

http://www.isdbcareers.com

https://jobs.thelawyer.com/jobs/islamic-finance/

Best regards,

Michael Gassner

As part of efforts to ensure that the ecosystem was preserved, the Central Bank of Nigeria (CBN) about two years ago rolled out guidelines on the Nigerian Sustainable Banking Principles (NSBP). The central bank had directed that sustainability reporting would commence in June 2014 with the submission of the one-off report (first quarter) not later than July 7, 2014. The CBN also instrcted that the second quarter one-off report should be submitted to it, not later than October 7, 2014, while the third quarter report should reach the CBN not later than January 7, 2015. Nonetheless, there are indications that some banks are having challenge complying with the reporting template because they are required to implement a sustainable banking principles and the respective management approach.

African markets are gradually opening to Islamic finance, buoyed by governments’ debut sales of sovereign sukuk and legislative efforts to make the sector more attractive for companies across the region. Despite the strong growth of Islamic finance in its core markets of the Middle East and south-east Asia, the industry has lagged behind in Africa, which is home to one in four of the world’s Muslims. Governments across the continent are using sukuk as a way to attract cash-rich Islamic investors, with South Africa making a $500 million (R5.6 billion) issue last month.

Considering the huge infrastructural deficit that faces Nigeria, and the challenges being faced by the Federal Government of Nigeria due to a decline in oil revenue, it has become imperative for State Governments and corporates to access alternative financing techniques to meet their capital development needs. The potentials for using sukuk as a tool for capital raising and infrastructural development in Nigeria are examined and discusses the recent sukuk issuance by the Osun State of Nigeria under the State’s N60 Billion Debt Issuance Programme.

Burkina Faso’s Coris Bank International (CBI) has decided to open a window dedicated to Islamic financing in the West African country in early 2014. According to the bank, this will be possible due to the support of the Islamic Corporation for the Development of private Sector (ICD), an affiliate of the Islamic development Bank (BID). The CBI would be the first Burkinabe bank to introduce Islamic banking. According to the bank, this would enable it to set up in parallel institutions for the provision of financial products to its customers on the basis of the Islamic regulations. There are plans to replicate this project in other countries where CBI is operating.

There are many reasons that Islamic financial products are popular outside the Muslim world. Britain became the first non-Muslim country to issue sukuk, the Hong Kong Monetary Authority made an issuance, and the governments of Luxembourg and South Africa will follow suit later this year. Last month Goldman Sachs issued an Islamic bond, and before the end of the year, Bank of Tokyo-Mitsubishi and Société Générale, a French bank will probably do the same. All of these entities want to get a piece of the $2 trillion Islamic finance market.

A study by the Dubai Chamber of Commerce and Industry , has revealed that Gulf entities have provided at least US$30bn of funding, at current prices, to African infrastructure over the past decade. This amounts to between 7% and 10% of total inflows, of which approximately US$15bn in loans and grants from Gulf development agencies and approximately US$15bn in direct investments. The study also revealed that Gulf funding for African infrastructure has focused on North Africa. To date, there has been relatively little Gulf investment in the continent's fast-growing economies of Angola, Ethiopia and Nigeria which have attracted funding from other parts of the world.

Jaiz Bank Plc has increased its branch network to fourteen with the opening of the Kano Kabuga branch within Bayero University. A statement from the Head, Corporate Communications of Jaiz Bank, Idris Salihu said more branches would come on board before the end of the year. Salihu also stated that the bank has raised its capital base from the initial N5 billion it started with in 2012 to over N11 billion and is currently working on increasing it by way of right issue. The Bank commenced operations with three branches in Abuja, Kaduna and Kano states in January, 2012 and soon added branches in Gombe, Maiduguri, Katsina and Gusau (Zamfara state), Bauchi. It has three branches in Abuja and four in Kano with the addition of Kabuga branch.

For Islamic banking in Africa, the potential pool of customers is vast while the significant liquidity available within Islamic finance presents an ideal source of funding for Africa's huge infrastructure needs. Despite this evident potential, however, standalone Islamic banks are still comparatively rare across the continent. This is a consequence of the logistical difficulties and high-risk involved in setting up a new bank in Africa, together with the strict regulations involved in offering a Shari'ah-compliant solution, which have presented a double barrier to start-up Islamic banks in the continent. Offering an Islamic solution within an existing bank is a lower-risk way to access Africa's market potential.

There are basically two models of Islamic insurance that is, al-Mudarabah model and the wakalah model though most jurists prefer the first one. This element enables members to fulfill their obligations of mutual help and guaranteeing one another. It should, however, be noted that the element of profit sharing among participants from the proceeds of the Islamic insurance operations is only made after fulfilling the mutual obligation of assisting one another and this calls for proper asset keeping and sufficient protection of funds against over exposure to loss. Where the insured is still alive on the maturing of the policy he/she is entitled to the whole amount of the premiums, a share of the profit made over the premiums, a bonus and dividends according to the company policy.