IslamicFinance.de

The Islamic Development Bank has launched a programme to loan $180 million to six African countries for the purpose of renewable energy projects. Islamic finance is growing in Africa and mainly used by governments that want to develop infrastructure projects on a large scale. Saudi Arabia-based IDB promotes economic development in 56 countries through Shariah-compliant loans and grants. Just about half of the bank's member countries are in Africa. The continent is home to hundreds of millions of Muslims.

Such is the hype of activity about Shari’a-compliant product at the moment that even The Grand Duchy of Luxembourg has now moved a step closer towards the issuance of a debut sukuk. The government presented a draft bill to parliament that could get deal going, proposing the issuance of a €200m-equivalent sovereign sukuk denominated. Euros or US-Dollars, both are welcome. Additionally, the Luxembourg government has also identified three real estate assets to underpin the transaction.

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Le directeur général de la Banque islamique du Sénégal (BIS), Babacar Ndoye, soutient que la finance islamique est assez efficace pour financer les grands projets des Etats. Les autorités ont, à travers les sukuk, un instrument capable de satisfaire les besoins de financement des infrastructures et du développement, selon M. Ndoye. Le Sénégal, pays majoritairement musulman, peut aussi mobiliser beaucoup d’argent par "la zakat". Babacar Ndoye estime que les possibilités pour le monde musulman de lutter contre la pauvreté et de se développer, au moyen de la zakat, sont extraordinaires. Appliquée à la banque, la "zakat" peut même créer des emplois, a-t-il assuré. Pour toutes ces raisons, la finance islamique et la finance classique doivent être considérées comme deux entités complémentaires.

Religious investors, in economic terms the third largest group to invest on the world’s stock markets, can post high placement profits and remain faithful to their religious creed. This is the message of the third biennial world report on religious investors, the only report of its kind.

The report highlights the profile of religious investors who respect this balance and thus can have a major influence on company ethics:
- Their principles of faith can serve as a road map for investment choices;
- By nature, these investors have a long-term view which is key to the notion of responsible investment;
- They can call on the support of what is often a worldwide community;
- They have set up networks that offer the chance to work together on stakeholder actions and therefore increase their impact.

Even though a certain number of religious organisations invest responsibly and use their role as shareholder-activists to promote change this sort of profile is far from the majority.

Jaiz Bank Plc has appointed Mahe Abubakar as the Executive Director in charge of Business Development. Until his appointment, Mahe was a General Manager/ Group Zonal Head of Zenith Bank Plc in charge of the Northwest region. He has a Master Degree in Business Administration from the Ahmadu Bello University, Zaria and he is a qualified Dealing Clerk of the Nigerian Stock Exchange. Mahe has attended several trainings in and outside Nigeria. His appointment has been confirmed by the Central Bank of Nigeria.

Jaiz Bank will boost its net worth of investment in Nigeria to N22 billion by July, according to the bank's Managing Director Mr. Muhammed Islam. The bank's present investment stands at N15 billion and will rise to N20 billion by the end of June by sponsoring projects worth N7 billion in the period. The Jaiz bank boss explained that most of the investments were in home-financing, automotive, industrial sector, imports and exports among others. He disclosed that the bank has a deposit base of N25 billion and a working capital of up to N35 billion. Islam said the bank would soon secure licence from the Central Bank of Nigeria (CBN) to expand its operations to all state capitals in the country, to enable more customers access its services.

The Islamic Development Bank's (IDB) Board of Executive Directors has approved new fundings totalling $670.9 million for development projects in member and non-member countries. The Executive Directors approved $312.8 million to finance electricity projects in Egypt and Senegal; $110 million to fund the development of a major road in Uganda; $48 million to fund pearl preservation and economic revival projects in Bahrain; $44 million for an underwater communications cable in Bangladesh; and $12.4 million to finance fish farms in Mozambique. Moreover, the executive directors gave their approval for four donations for Muslim communities in non-member Bosnia-Herzegovina, Cambodia, India and Thailand while funds will also be channelled into development projects in Africa.

The International Finance Corporation, the private-investment arm of the US-based World Bank Group, has announced that the Gulf African Bank (GAB) in Kenya has become a member of its Africa Micro, Small, and Medium Enterprise Finance Program. Through this program, GAB will receive advisory services from IFC in the areas of accessibility for customers, speed of service, adding new products and customer relationships. In 2013, IFC paid USD 5 million for a stake of undisclosed size in GAB. As of December 2013, GAB had total assets of KES 16 billion (USD 184 million). IFC has 182 member countries and reported total assets of USD 77.5 billion.

As the World Economic Forum on Africa (WEFA) ended on Friday, Mrs. Elzie Kanza, the Director and Head of Africa WEF, said about 50,000 social media items mentioned the Forum. The coverage had a total reach of over 2.1 billion - about 30 per cent of the world's population. Kanza said that the Chinese government had planned to invest US$42 billion in Africa, US$10 billion in investment financing, US$30 billion in extending credit lines and US$2 billion into a China-Africa investment fund. In the business sector, she said that the Dangote group is investing US$16 billion in Nigeria over the next four years and it is expected to create 180,000 jobs. Kanza added that another company will be investing US$1 billion across Africa in the next 10 years while 20,00 jobs will be created through the Digital Africa initiative.

The Islamic Corporation for the Development of the Private Sector (ICD) plans to increase its activities in Africa, part of plans to widen the appeal of Islamic finance across the region. Under a new strategy, the ICD is helping develop what it terms "Islamic finance channels" to spread sharia-compliant financial products more widely, ICD chief executive Khaled Al-Aboodi said. Such channels include Islamic banks, investment and ijara companies, and takaful and retakaful firms. Some of the projects will be led by Senegal-based Tamweel Africa Holding which will establish an Islamic bank in Benin and is finalizing a feasibility study for one in Mali. In Chad, the ICD is supporting the establishment of an Islamic bank and a leasing company, depending on the approval from local authorities.

In Nigeria, the practice of Islamic finance was introduced in 1992 by the former Habib Bank (Bank PHB, and now Keystone Bank). The profile of this type of banking was again raised between 2008 and 2009 when Nigeria joined the Islamic Financial Services Board (IFSB). Later, the CBN issued framework dated January 13, 2011 to regulate Islamic finance in Nigeria. In July, 2011 the CBN granted licence to Stanbic IBTC Bank to operate an Islamic banking window and subsequently to Sterling Bank in 2013; the CBN had earlier granted approval for the establishment of Jaiz Bank to operate as the first full-fledged Islamic bank in Nigeria. In sum, for Nigeria to benefit from Islamic finance, the governing laws and regulations must be written and subject to interpretation and analysis.

The 11th IFSB Annual Global Summit, themed "New Markets and Frontiers for Islamic Finance: Innovation and the Regulatory Perimeter", will be held in Mauritius. The session topics which reflect the importance of the Summit theme include: Global Overview of the Islamic Financial Services Industry (IFSI): Outlook and Policy Developments; Legal and Regulatory Environment of Islamic Finance; Sukuk, Market Development and Regulation, The Role of Islamic Finance in Economic Development: Promoting Financial Inclusion, Sustaining Innovation, Expanding the Regulatory Perimeter - Striking a Balance; Panel Discussion on "New and Emerging Islamic Finance Jurisdictions: Opportunities and Challenges Ahead. Global players and thought leaders from among the regulators and market players of the Islamic financial services industry have confirmed their participation.

A mutual insurance scheme based on Islamic Sharia law has been launched to reduce the impact of extreme weather events on pastoral livelihoods in Kenya’s arid northern regions where perennial drought often decimates thousands of livestock. The Islamic Takaful insurance is boosting risk management. Those insured under the Tafakul scheme are compensated for the loss, or reduction in value, of their livestock based on an index formulated by the International Livestock Research Institute (ILRI), and according to information gathered by satellites to measure vegetation coverage and thus the severity of drought. Recently, some 101 livestock farmers received their first pay-out.

With Islamic financing growing significantly in Kenya over the last five years and now accounting for 2% of the country's total banking industry, it's not surprising that Standard Charted chose Kenya as the first African nation in which to launch its Sadiq suite of Islamic banking products. Trade Finance caught up with Wasim Saifi, Standard Chartered's global head of Islamic banking, to find out what Islamic trade products it has planned for Kenya and why the bank sees Africa as the new growth frontier for the $1 trillion plus Islamic finance market.

Jaiz Bank has increased its investment portfolios by N7.5bn within the last two years. The investments represent an increase of 380 per cent from the N1.9bn in January 2012 to the current N9.4bn. In terms of profitability, the bank grew its total earnings by more than 750 per cent during the year. Jaiz has expanded its operation from just 3 branches to 13 branches since 2012. It plans to operate in every state capital of Nigeria before the fifth year of operation. In December, 2013, the bank submitted its application for a National Banking License to the Central Bank of Nigeria. Hopes are that this will come through before the end of the second quarter.

Researchers in Kenya have developed a pioneering insurance policy for nomadic Muslim livestock herders, which has now delivered its first payout of approximately $5,800 to 101 farmers to compensate them for drought losses. The policy, which was purchased by about 4,000 pastoralists in Northern Kenya, was developed by the International Livestock Research Institute and commercially delivered by Takaful Insurance of Africa. Since the farmers usually habitat isolated areas, index-based insurance works better than traditional insurance. For Takaful Insurance of Africa, the project is a leap of faith, as they are not currently making a profit. However, hopes are the project will eventually be self-sustaining.

Dubai-based Souq.com, an Arab e-commerce site, has secured a $75 million investment from Naspers, a South African media organization. Besides, Silent Herdsman, which produces wearables for cows, has received £3M ($4.9 million) in funding. Moreover, Waltham, MA-based Actifio, which provides copy data virtualization to customers, has gained $100 million in an oversubscribed investment round. Software defined storage company Amplidata has realized an $11 million investment led by Intel Capital and Singapore sovereign wealth fund GIC has pumped about $63 million into U.K.-based energy tech company Intelligent Energy Holdings. Moreover, there have been several Mergers & Acquisitions, including Palo Alto Networks buying cybersecurity startup Cyvera.

Islamic banking was introduced in 2008 in Kenya when the first two Islamic Banks, Community Bank (FCB) and Gulf African Bank (GAB), opened their doors. Islamic finance has evolved rapidly into insurance, investments, and pensions which are in line with the Islamic law. Owing to the success of the two Islamic Banks in terms of attracting deposits from the Muslim community, other commercial banks have quickly opened up Islamic segments to compete for the Muslim wallets. Currently, 10 out of the 42 commercial Banks in Kenya have created such segments. However, one of the main challenges facing Islamic finance in Kenya is lack of Shari`ah-compliant investment instruments in the financial markets, such as shares, stocks and bonds.

While suspended governor of the Central Bank of Nigeria, Lamido Sanusi, is trying very hard to clear his name from the indictment of financial recklessness by the Financial Reporting Council of Nigeria (FRCN) and the presidency, his colleagues appear to be gradually distancing themselves from actions taken during his reign at the regulatory bank. A deputy governor at the bank and once a leading contender to replace Mr Sanusi, Kingsley Moghalu, said that his boss overstepped his authority. Mr. Sanusi, however, said that he believed that his suspension was hastened after he threatened to commission a special audit of all Nigerian banks to unravel the whereabouts of the missing $20 billion. Ironically, the FRCN report also indicted that Mr Moghalu and his colleagues were also recommended for dismissal and prosecution.