IslamicFinance.de

In a speech marking the end of a three-day economic conference, Egypt's president Abdel Fattah Al Sisi reiterated his commitment to peace and growth as he sought more investments from the international community, after receiving commitments worth billions of dollars. Egypt signed investment deals worth more than $138 billion on the first two days of the conference, while its Arab Gulf neighbors—Saudi Arabia, Kuwait and the United Arab Emirates—pledged another $12 billion to help stabilize its economy. But Mr. Sisi, in his concluding remarks, said his country would need a lot more, as much as $300 billion over the coming years, to make its economy strong enough to give its vast population a genuine chance to prosper.

Abu Dhabi Islamic Bank said Sunday it has been shortlisted as a buyer for Citigroup 's Egypt retail business in what is set to be a heated battle to tap into one of the world's fastest growing economies. Mashreq and Emirates NBD are also reportedly bidding to buy Citi 's Egypt consumer banking network. Whoever wins this will have an advantage because Citibank has a good portfolio of clients, they have more than 100,000 credit cards, Tirad Al Mahmoud, ADIB's chief executive, said. Citi , which has also dropped its retail banking businesses in Turkey, Romania, Greece and Pakistan, has said it sees potential in other booming economies such as in Sub-Saharan Africa.

Arab Women's Enterprise Fund (AWEF) aims to empower poor women, increasing their income and well-being and ultimately improving their livelihoods and growth opportunities. The programme will do this by increasing their participation in markets through working with market actors to encourage the adoption of new practices and also by addressing constraints in the enabling environment. AWEF is an 10 million pouns market development programme that will work in Egypt, Jordan and the Overseas Palestinian Territories (OPTs). DFID will work in partnership with the Islamic Development Bank (IDB) who will contribute an additional 10 million pounds in sharia-compliant concessionary finance through financial intermediaries.

Regardless of its average GDP growth, the widening of the gap between the rich and poor is certain to affect the well-being of everyone, the rich included. Although some governments aim to achieve narrower gaps through reducing gaps in earnings, others realize that goal through taxation and redistribution of wealth. Many Egyptians abide by redistribution constituted both by the state, in the form of taxes, and religion. Among the five main pillars of Islam is Zakat, which calls on well off Muslims to annually pay 2.5% of their net monetary wealth. Putting the previous through a simple mathematical calculation while bearing in mind that Egypt’s population has grown to 95 million, it isn’t hard to imagine the amount of money being willingly circulated in Egypt out of faith and spirituality.

In Egypt, 20% of small- and medium-sized enterprises (SMEs) have indicated a preference for Sharia-compliant products, according to an IMF working paper issued this month. The paper said there is a substantial demand for Islamic banking among the MENA region’s SMEs, with approximately 35% expressing their interest in financing by Islamic banks. Islamic banks need to make adjustments in the structure of their work to improve their ability to reach consumers. They also need to sell their products to the global Muslim population segment that does not currently have a bank account, according to the paper. Moreover, banks need to focus on SMEs and pursue private equity and venture capital initiatives.

A unit of the Jeddah-based Islamic Development Bank has provided $80 million worth of sharia-compliant reinsurance to cover political risk for oil and gas projects in Egypt. The deal covers the Overseas Private Investment Corporation for its own insurance policy on the exploration projects of Houston-based Apache Corporation, the Islamic Corporation for the Insurance of Investment & Export Credit (ICIEC) said in a statement. The announcement comes as Egypt is seeking new sources of energy to cope with its worst energy crisis in decades, caused by declining gas production and rising consumption. The policy would allow the country to retain foreign direct investment during a critical transtional period.

Banque Misr has registered total Shariah-compliant funding of two billion Egyptian pounds (US$135 million) by end of 2014. Banque Misr's Shariah-compliant deposits have totalled around 26 billion pounds. During fiscal year 2013/2014, Banque Misr had arranged a number of Islamic funding contracts including a US$110 million contract as pursuant to Mudaraba system. The bank had also implemented the first joint Islamic financing with Istisna'a followed by Ijarah system described in the disclosure to finance a project with a total value of about 1.07 billion pounds, Moreover, the bank had carried out the first Islamic finance in the Egyptian market with Musharakah Mutanaqisah system.

The successful roll-out so far of a new “smart card” system to distribute subsidized bread has been a major achievement for Egypt’s government, saving money while earning praise from families who no longer have to wake early to fight for loaves. While the government still has a long way to go to roll out the new system countrywide, success so far marks an important civilian achievement for the president. The cards have so far been introduced in 17 of Egypt’s 29 provinces and consumption in those areas is already down between 15 to 35 percent. However, there are still worries whether the new smart card system is air-tight enough to squeeze out middlemen working the black market.

Head of the Egyptian Islamic Finance Association (EIFA), Mohamed El-Beltagy, said that Islamic banking clients in Egypt estimated approximately 2.5 million, constitute about 20% of the Egyptian banks clients. After the 2008 global financial crisis, international interest in the Islamic banking and finance industry increased. With the Muslim Brotherhood coming to power in 2012, Islamic banking’s importance grew once more. The move towards Islamic banking encouraged some conventional global and local commercial banks into setting up branches offering Islamic banking services. El-Beltagy said that the size of Islamic deposits as of 30 June 2014, about EGP 115.8bn, accounting for 8.3% of the Egyptian banking market size.

Tokio Marine Family Takaful’s newly appointed Managing Director Masaya Inagaki comes to Egypt with great expectations for the Egyptian insurance market. Inagaki said that providing a service with high quality at a reasonable price for customers is a core concept in Japanese culture, and that he is determined to apply that in Egypt. His goal is to make Tokio Marine Family Takaful the number one Takaful company in the country, he added. The company also intends to cooperate with banks in light of the new regulations issued lately by the Central Bank to activate banking insurance.

Abu Dhabi-based Khalifa Fund for Enterprise Development will provide $200 million in loans for microfinance projects in Egypt, a move it said would create more than 120,000 jobs by 2020. The UAE state investment fund has signed the loan agreement with the Egyptian government in Cairo. The loan will be directed towards microfinance development in remote and disadvantaged areas and pockets of poverty throughout Egypt. It will also help Egyptian women in rural areas find work. Egypt issued its first law regulating microfinance services last week, seeing the provision of extremely small loans could help to create jobs by giving individual entrepreneurs a start.

EIIB-Rasmala, a Dubai-based investment bank and asset manager, is moving to buy the remaining 49 per cent of an associate company based in Egypt. The takeover of Rasmala Egypt Asset Management (Ream) follows new strategic initiatives for next year. EIIB-Rasmala is now opening discussions with potential joint venture partners to expand its investment activities in both Egypt and other parts of Africa, its chief executive Zak Hydari said. In November, EIIB-Rasmala announced it was finalising the launch of two leasing fund strategies and planning to expand its UAE property business. The Dubai investment bank also said it expected to raise about US$1 billion for its growing leasing and alternatives business and approximately $250m to invest in a broad mix of property transactions in the United Kingdom.

Egypt's Wethaq Takaful Insurance has purchased EGP 17 million worth of investment certificates to fund the new waterway along the Suez Canal, said General Manager of Financial and Administration Affairs Abd El Aziz Labib. Labib referred to the Suez Canal investment certificate as a guaranteed saving pool, at an interest rate of 12%, which is higher than those invested in the Treasury bill and bonds. Furthermore, the Egyptian official said Wethaq Takaful's portfolio of total investments reached EGP 230 million by end of last fiscal year 2013/2014. The company plans to boost its investment portfolio to EGP 250 million by end of the current fiscal year.

Egypt said on Sunday it expected to receive around $425 million in funding from the Islamic Development Bank to develop an oil refinery in Assiut and an airport in the Red Sea resort of Sharm el-Sheikh. The first agreement is for $198 million earmarked for the refinery. A further $226.8 million (not $8.23 million) will go towards the first phase of the Sharm el-Sheikh airport project. Egypt has requested a further $223.2 million for the second phase of the project. The Islamic Development Bank made financing contributions worth about $1.85 billion in Egypt between July 2013 and August 2014. The country will also seek external sources of funding for other development projects.

Egypt's President Abdel-Fatah Al-Sisi has ordered the formation of an independent Zakat House with the purpose of raising charity funds in accordance with Sharia. A presidential decree stipulated the formation of a charity fund called Zakat House, which will have a legal jurisdiction and will be financially and administratively independent, but will be overseen by the Grand Imam of Al-Azhar. The decree aims at receiving Zakat, alms, donations, and subventions from Muslim citizens to spend them on the development of the individual and society as stipulated by Sharia law. The board of trustees which will manage the fund will include a number of public figures with backgrounds in Sharia law, economics, finance and business.

Managing Director of Egyptian Takaful Company (Life) GIG Hisham Abdel Shakour revealed that the company plans activating marketing its products through Audi and Abu Dhabi Islamic banks by October. Abdel Shakour explained that GIG obtained the initial approval of Egyptian Financial Supervisory Authority ( EFSA ) to start activating its various products via the two banks' branches along with obtaining the approval of the Central Bank of Egypt (CBE). GIG is still waiting EFSA 's final approval to activate this new marketing activity in Egypt, Abdel Shakour added. The company is planning promoting new five products according to the new marketing system as it contributes to facilitate for the customer to obtain automatically policies with high speed.

Alpha Capital Holding (AC) has been chosen to manage Wethaq Takaful Insurance - Egypt's launched-to-be mutual fund. Wethaq's planned fund will be at an initial capitalisation amounting to EGP 50 million. It is expected to be launched in local markets within the next three months. The Egyptian Financial Supervisory Authority (EFSA) has recently given its regulatory approval for the launch of six open-ended mutual funds by insurance companies, with total capitalisations worth EGP 450 million. Wethaq is currently completing the regulatory procedures required to launch its mutual fund. The fund's investment objective is to provide a savings and investment pool in order to give daily liquidity through accumulating daily returns on the fund's investments.

Abu Dhabi Islamic Bank PJSC (ADIB)’s Egyptian unit sees demand for Shariah-compliant finance picking up, expecting to complete deals for about 5 billion pounds ($699 million) in the next year. The institution is working to provide syndicated financing for as much as five infrastructure projects in electricity, oil and gas, Nevine Loutfy, the only woman chief executive officer of a Shariah lender in the Middle East, said. ADIB Egypt was one of six lenders, including state-owned Banque Misr SAE that arranged a $110 million Islamic facility for East Delta Electricity Co. in February 2013, the nation’s first Islamic loan, she said. ADIB Egypt expects 2014 to be its second profitable year in a row, Loutfy said.

Egypt’s minister of industry, commerce and small and medium enterprises, Mounir Fakhry Abdel-Nour has said the World Bank has approved a $300m interest-free loan to fund Egyptian micro and small enterprises (MSEs). The Egyptian government plans to cooperate with the World Bank in building infrastructure for small and medium enterprises, particularly in the impoverished Upper Egyptian governorates, Abdel-Nour said during his meeting with a delegation from the World Bank.

Two weeks after the launch of the 037037 bank account to collect donations to help Egypt’s economy, the total value of donations exceeded EGP 400m, the Central Bank of Egypt’s (CBE) informed. The latest donation was from a Saudi businessman who contributed EGP 214m to the fund. The CBE announced in a Tuesday statement that donations from banks operating in the Egyptian market have increased to record around EGP 160m, including EGP 20m from State-run Banque Misr, Banque du Caire and National Bank of Egypt each. Other contributing banks include the Commercial International Bank (CIB), Arab African International Bank, Emirates NBD, the United Bank, QNB Al-Ahli, Faisal Islamic Bank of Egypt, SAIB, Egyptian Gulf Bank and Arab International Bank (AIB).