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#Iraq’s Kurdistan region will immediately pay $1 billion to UAE-based Dana Gas and its partners to settle a long-running London court case. The full and final settlement of the $2.24 billion case is the latest effort by the semi-autonomous region to put its finances in order ahead of a referendum seeking independence from the government in Baghdad. Kurdistan has ramped up oil sales independent from Baghdad and is hoping to raise gas exports. The settlement is significant for both parties, with Kurdistan settling the dispute at a time it is working on reshaping public finances. For Dana, the Kurdish settlement will be eagerly watched by its bond holders which are disputing Dana's move to restructure its $700 million sukuk on the grounds it is no longer sharia-compliant.

Consulting firm Solidiance launched its new report entitled Digital Evolution in Indonesia's Banking Industry. In this report millennials are projected to account for around 58% of Indonesia's total population by 2027. Indonesia has a population of more than 260 million people and only 36% of the population are connected to financial institutions, leaving in the region 150 million citizens unbanked. The report also noted that digitalization helps provide greater opportunities for banks to seize the market share. The market will be soon occupied with digital-native millenials who prefer to use the new channels available them. The Solidiance report estimated the number of Internet users in Indonesia is expected to explode in the coming years from as low as 35% of the population in 2015 to an estimated 68% in 2020.

The Dubai Financial Services Authority (DFSA) launched its regulatory framework for loan and investment-based crowdfunding platforms. The DFSA crowdfunding regulations have the ability to catalyse growth in the FinTech industry by targeting the specific requirements of crowdfunding platforms. The regulations ensure clear governance for FinTech businesses and provide appropriate protection for their customers. They also formalise the DFSA’s approach to regulating crowdfunding platforms which had operated since 2016. Data provided by the Khalifa Fund shows that approximately 50-70% of SMEs have had their applications for funding from conventional banks rejected. Crowdfunding is expected to grow further in importance in the UAE as entrepreneurs seek alternative sources of funding.

Abu Dhabi Global Market (ADGM) and KPMG have come together to launch the first FinTech Abu Dhabi Innovation Challenge on Oct. 22. The Innovation Challenge includes an intensive five-week program for innovative and mature start-ups to conceptualize and present market-ready solutions that address real business challenges in the Middle East, Africa and South Asia (MEASA) region. During the program, 10 finalist teams will work divided into six focus areas: Financial and Investment Management, Financial Inclusion, RegTech, Trade Finance, InsurTech and Private Capital Markets.The finalists will showcase their solutions at the FinTech Demo Day in Abu Dhabi to a panel of industry experts. Each finalist will benefit from mentoring sessions and fast-tracked consideration for admission to ADGM’s Regulatory Laboratory (RegLab) program. They will also win a $15,000 cash stipend to cover any costs associated with travel matters and accommodation.

Shamsul Anuar Nasarah, chairman of the National Higher Education Fund (PTPTN), says the 1% interest charged on study loans is not to make a profit, therefore it is not right to abolish it. In his view, the cost is minimum and is used to cover the staffing and administrative costs of those who are managing the accounts. Borrowers are charged between 1% and 3% interest, and additionally, their loan amount will increase if they fail to pay their instalments. After the agency's establishment, administrative costs had amounted to 4% a year. It was gradually reduced to 3% a year since January 1, 2004. Now, the interest is only 1% a year, beginning June 1, 2008. In 2017 PTPTN is expected to collect RM4 billion by the end of the year. Higher Education Minister Idris Jusoh said the target was achievable as the agency had collected RM3.4 billion last year, when its target was only RM2 billion.

United Arab Emirates (UAE) regulators are setting out to establish a framework to guide the small business (SMB) crowdfunding market. Reports noted that regulators are aiming to promote innovation and a broadening of small business activity. Equity crowdfunding is expected to provide $93 billion to small- and medium-sized enterprises by 2020, reports added. In the UAE, SMBs stand to gain significantly from that trend, as these businesses make up an estimated 85% of all UAE companies. In Dubai, that number is even higher, at nearly 95% of all businesses. Meanwhile, research from the Khalifa Fund for Enterprise Development found that as many as 70% of small business loan applications in the UAE are rejected by traditional banks. Ian Johnston, Chief Executive of the Dubai International Financial Services Authority (DFSA), said the DFSA was the first in the GCC region to formalize a tailored regime for loan and investment crowdfunding platforms, which represent an important source of financing for the SME sector.

The Malaysian company Farad launched its Farad cryptoken at the Dubai International Financial Centre (DIFC) on Monday. The CEO of Farad, Wan Hasni, said this was the first cryptocurrency backed by real-economy activity. The Farad cryptoken (FRD) is a digital currency, with each token representing the rights to the forward purchase contract of 80,000,000 ultra-capacitor cells produced by a Chinese company over a period of 36 months. According to company documents, at the time of initial coin offering (ICO), 1 FRD will be equivalent to $12.50. The pre-sale ICO will happen on August 25, and then on September 15 the full sale will begin. Around 1.2 billion FRD will be issued in the ICO, half during the pre-sale and half at the full sale, for a 10% premium. The ICO will be followed by roadshows in Asia and Europe to promote the business.

Malam Hassan Usman, CEO of JAIZ Bank, perfected a partnership with Borno State government on the reconstruction of the state economy.
Usman said, that the fourth branch of JAIZ Bank had been opened in Nigerias Maiduguri about five years ago. And it has so far been getting the strong support of the state government since the branch was opened. So he was in Nigeria to explore the ways and means to reciprocate this kind gesture by the state government. His bank wants to help Governor Kashim Shettima in all his efforts to turn things around, especially now that peace and normalcy are gradually being restored in Maiduguri and the entire state.
JAIZ bank has launched a programme, which is being implemented since the beginning of the rainy season, to provide small-holder farmers with inputs. It is working with the coordinator as well as the private sector partner for the state to provide the seeds, fertilizer and other inputs to the partner. The idea of the state government is to start with 5,000 farmers, which it wants to empower at this initial phase of the programme.

The Dubai Islamic Economy Development Centre (DIEDC) announced the commencement of nominations for the fifth edition of the Islamic Economy Award (IEA). The award is a joint initiative of DIEDC and Dubai Chamber of Commerce and Industry under the directives of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. The eight key categories of the Islamic Economy Award 2017 are: Money and Finance, Food and Health, Media, Hospitality and Tourism, Waqf and Endowments, SME Development, Islamic Economy Knowledge Infrastructure and Islamic Arts. In addition to the eight main categories, the Lifetime Achievement Award recognizes a notable individual, whose work over several decades, has inspired others and had a major positive impact on the Islamic economy.

The Mindanao Development Authority (MINDA) is currently pushing to fast track the institutionalization of the Islamic Financing Mechanism. MINDA assistant secretary Romeo Montenegro said they are proposing the amendment in order to have specific mechanisms for full implementation of the Islamic Finance Mechanism. He added the bill in the Senate is already in the committee level and are already waiting for the same version to be filed in the House of Representatives. Montenegro said they wish to have the Islamic Financing Mechanism to pilot at Marawi to help with the reconstruction efforts in the area. It is also targeted to be a channel for the Middle Eastern countries willing to shell out financial support for the victims of the Marawi siege.

The Nigeria Customs Service announced that only Jazz Bank was able participate in the first bidding of its e-auction exercise. Joseph Attah, the Customs National Public Relations Officer (PRO), said that Jazz Bank was the only one out of the 23 customs duty collecting banks that accessed the e-auction platform. The PRO said that all the 23 Customs duty collecting banks were carried along and the process was subjected to user acceptability test. Throughout the testing period, no bank indicated any problem with the platform. However, upon launch only Jaiz Bank was discovered to be ready and active on the platform. Attah noted that the first 48 hours bidding period produced 43 winners. Items uploaded were 130 vehicles, 43 people placed their bids and won vehicles.

For many years, the global Islamic finance has been seen as a laggard in digital innovation, but now Islamic finance players are catching up with their conventional peers. According to Zeeshan Uppal, co-founder of crowdfunding company Yielders, fintech has opened up opportunities for Islamic finance to catch up because it allows scalability, which is in line with shariah law. Ibrahim Mohammed, the founder of OneGram, says that blockchain technology can create digital banks or P2P lending platforms that adhere to Islamic principles, and many other asset classes can be made shariah-compliant. Umar Munshi, founder of EthisCrowd, finds the slow innovation in Islamic finance perplexing as there is an urgent need for financial inclusivity. He expects to see more players in the takafultech, crowdfunding and P2P financing, payment and remittance, and smart contract space next year. According to EY’s Banking in Emerging Markets GCC FinTech Play 2017 report, Fintech can propel Islamic banks into the mainstream space in 20 promising markets by 2021, up from five markets today, and effectively add 150 million new Islamic banking customers.

There are over $3 trillion in stressed loan assets globally and the World Bank estimates that the current ratio of non-performing loans (NPLs) to total gross loans is around the 2009 levels of 4.2%. European banks have around euro 1.2 trillion of problem loans. Banking systems in many other advanced economies also face increasing risks. NPL problems are also apparent in India, China and Brazil. Solution of banking crises requires strong earnings, capital infusions, isolation of bad loans and industry reforms. But the ability of banks to earn their way out of the crisis to allow losses to be written off is limited. Banking problems represent a major source of continued economic instability. In modern economies, the financial system acts as a reservoir of bad debts, which can create financial crises. A new such episode may be beginning.

There are three possible explanations to the question why innovation might be slower in Islamic finance than in the conventional finance industry. These are the size of the industry, cultural factors and religious conservatism. First, the industry is tiny compared with conventional finance, Islamic finance assets are only 1.07% of total financial assets. Culturally, Muslim majority countries display much more respect for age and seniority than do locations like Silicon Valley or London. Finally, there is the question of religious conservatism. The rules of traditional Islamic law have always been derived from the original sources of Quran and hadith, and from past judicial rulings. Requiring all legal developments to be based on prior sources limits the scope for innovation. Mohammed Amin states that fintech can only transform Islamic finance if Shariah scholars are sufficiently agile in developing traditional Islamic law to accomodate innovation.

As the world of business is global, business schools are getting similarly global in their outlook. The need for a more diverse approach in business schools crosses all levels, from the makeup of faculty and the curriculum to the students themselves. Walid Hejazi, associate professor at University of Toronto’s Rotman School of Management stresses that diversity from a business school perspective is not so much a moral or equity imperative as it is about long-term sustainability. In his view, businesses that are diverse in their workforce are not only more innovative, they also work more effectively. Other business schools are following suit emphasising diversity on all levels. For example, the Beedie School of Business at Simon Fraser University introduced an Aboriginal Business and Leadership EMBA program to advance aboriginal leaders’ business education.

Islamic Development Bank (IDB) Group President Bandar Hajjar and UN Deputy Secretary-General Amina Mohammed identified priority areas for a strengthened cooperation. They also explored opportunities to collaborate on global, regional and country-level priorities to achieve the SDGs. The UN and the IDB will seek to develop private sector partnerships, advance the Global Islamic Impact Investing Platform for blending Islamic Financing and Private Sector resources, and promote institutional cooperation. Bandar Hajjar stressed that the IDB Group was fully committed to the SDGs, while Amina Mohammed underscored the importance of interactive partnerships with governments and of country-level results.

A significant proportion of recent economic growth has relied on borrowed money, which stands today at 325% of global gross domestic product. Debt allows society to accelerate consumption, but the bill for these commitments will soon become unsustainable, as demographic changes make it more difficult to meet. Degradation of the environment results in future costs, too: either rehabilitation expenses or irreversible changes that affect living standards. Rather than reducing high borrowing levels, policy makers use financial engineering, such as quantitative easing and ultra-low or negative interest rates. A 2010 study found that European states have mortgaged themselves beyond their capacity to easily repay. Another 2010 study from the International Monetary Fund found that in the US the lifetime tax burden was positive for all ages, with the largest benefit accruing to those over age 50. But the figure for future generations is negative, meaning they will have to meet the obligations of their elders.

The #Philippine team of the APEC Business Advisory Council (ABAC) has expressed interest in developing the Islamic Infrastructure Investment Program (I3P), making it a priority for the country. ABAC Philippines said it would look into how the Philippines can tap into the available funds from the Islamic banks in the region. The advisory council has identified infrastructure investment, areas involving people and labor, and micro, small and medium enterprise development as key priority areas for the country. For people-to-people connectivity, ABAC Philippines agreed to continue advocating for labor mobility and working on the APEC Business Travel Card (ABTC). It will also work with the Department of Foreign Affairs on how to improve access to ABTC and to increase penetration of the travel card among Filipino business people.

Abu Dhabi is taking ambitious steps to tap into financial technology. The Abu Dhabi Global Market (ADGM) signed a cooperation deal with the Monetary Authority of Singapore. The goal of the arrangement is to spur financial entrepreneurship through mutual exchanges of fintech know-how. Last November the ADGM launched the FinTech Regulatory Laboratory, or RegLab, to provide a platform for foreign players to innovate. So far five companies have been selected to participate. Richard Teng, CEO of the emirate's Financial Services Regulatory Authority, said there was a clear trend toward cultivating sectors besides oil and the cooperation with Singapore is designed to make fintech the driving force of economic diversification. In his view, Asian financial companies have a big market in the Middle East to develop and explore business in wealth management, remittances and other fields.

Dana Gas and its partners are looking at recovery for damages of at least $26.5 billion from Iraq’s self-governing Kurdish region for all delays in oil and natural gas projects. Dana Gas is based in the UAE and its partners in the venture named Pearl Petroleum, filed a petition in May at a federal court in Washington, DC, seeking “recognition and enforcement” of awards in a London arbitration case. The petition is part of a legal process that may allow Pearl Petroleum to seize Kurdish assets if the Kurds don’t pay awards decided in arbitration.
According to the Kurdish Energie Minister stated, the Kurdistan Regional Government “considers that the claimants’ approach in the arbitration is unconstructive and unnecessarily escalates the dispute. It will continue vigorously to pursue its rights and defend its position in all appropriate forums.”
Dana Gas and partners are pursuing claims in the London Court of International Arbitration against the Kurdish Regional Government for damages related to delays they say were caused by the Government in developing the projects.