IslamicFinance.de

In line with the Sharia law on insurance of sharing profits and losses, Takaful Insurance of Africa company has shared Sh15.6 million surplus from its premium pool with clients. The company on Saturday issued 2,000 clients who contributed to the company's premium pool over the last one year with cheques for various amounts depending with the money they paid for various covers. The three highest paid customers took home Sh240,000, Sh150,000 and Sh100,000 respectively. According to its five-year plan, the company plans to spread its wings all over the country and to establish networks in Nyanza, Western and also Isiolo county.

IFC has announced the investment of $5 million equity in Gulf African Bank, one of Kenya’s two Islamic Banks. The bank will use IFC’s financing to increase finance for retail and corporate customers, develop programs for women entrepreneurs and extend more services to small and medium businesses. Jamal Al Hazeem, Chairman of Gulf African Bank, welcomed IFC’s decision to take up a 15% shareholding stake in Gulf African Bank. In addition to the equity investment, a further $3 million trade line will be made available to Gulf African Bank under IFC’s Global Trade Finance Program.

The African Banker Awards Committee has introduced a new category this year to recognise Islamic banking. The category, titled 'Best Islamic Finance Initiative' will go to the financial institution that has excelled in Islamic finance, in compliance with Shariah regulations and succeeded in providing ethical, reliable and affordable Islamic financial services. Sukuk, Takaful, Islamic project finance deals, Islamic commercial banking, and Islamic business banking are included in the list of eligible initiatives.Submission of entries from Banks and other financial institutions will close 25 March. The 2013 Awards ceremony will take place 29 May, 2013 in Morocco.

President of the Republic, Field Marshal Omer Al Bashir inaugurated Tuesday evening the Riyadh Centre of Faisal Islamic Bank in Khartoum. It includes the Electronic Branch, Banking Branch and Faisal Cultural Centre and is located in the Riyadh neighborhood of Khartoum. A speaker at the ceremony pledged going ahead with enhancing the work of the Bank to contribute to sustaining Sudan's economic growth through using modern technologies in transactions. Besides, the President of the Republic and the Governor of Khartoum State were honoured during the ceremony.

The lack of Sudanese banks in South Sudan is an impediment to trade between the two countries which could potentially reach a volume of $2 billion annually, according to the general manager of Sudan’s Export Development Bank (EDB) Mohammed Rashid Mohammed Salem. Therefore, he called for the swift signing of cooperation protocols between the central banks in Khartoum and Juba which would allow for a Sudanese banking presence in South Sudan. The Sudanese banker emphasised the readiness of the EDB to contribute to the development of trade and exports to South Sudan in order to support the banking system there.

The increased level of corruption and insecurity in the northern part of the country as well as mixed signals from power and petroleum sector reforms were likely to affect Nigeria's output performance, according to the Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi. Moreover, the CBN for the ninth time in a row decided to leave the Monetary Policy Rate (MPR) also known as the benchmark interest rate at 12 per cent with a corridor of +/- 200 basis points. It also maintained banks' cash reserve requirement (CRR) at 12 per cent and liquidity ratio at 30 per cent with the net open position at 1 per cent.

The Central Bank of Nigeria (CBN) recently released the Nigerian Sustainable Banking Principles (NSBP) to promote sustainable way of doing business, especially in the banking industry. NSBP is anchored on nine over-arching principles. These were among others managing environmental and social risk in business decisions, safeguarding human rights and promoting women’s economic participation and empowerment. The Bankers’ Committee, as a commitment to sustainable development adopted NSBP, with particular focus on the development of agriculture, power and oil and gas.

The Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has described China as a major contributor to the de-industrialisation as well as underdevelopment of Africa. He warned that with the growing interest of China in the continent, Africa was opening itself up to a new form of imperialism. Sanusi explained that China is no longer a fellow underdeveloped economy but an economic giant capable of the same forms of exploitation as the West. Trade between China and Africa was worth more than $200 billion in 2012. There has also been strong growth partly as a result of Asian demand for African resources.

Growth in the Muslim population throughout the emerging markets of Middle East and North Africa and Asia (MENA) is a key reason behind increasing demand for Islamic banking services. Especially sub-Saharan Africa offers growth opportunity for Shariah-compliant finance. Ja’iz Bank for example, Nigeria’s first Islamic bank, has witnessed growth in customer base, assets and branch network. The future of non-interest banking in Nigeria is bright. The Central Bank of Nigeria (CBN) has launched Liquidity Management Instruments to assist non-interest banks to be able to manage their liquidity while National Insurance Commission (NAICOM) has, in collaboration with Ja’iz, designed an Islamic cooperative kind of insurance called Takaful. Similarly, other institutions and commissions are mulling how to come up with non-interest-based bonds for financing infrastructure.

Kenya Reinsurance Corporation ( Kenya Re) is one of several local firms to venture into the Islamic re-insurance business with establishment of a Sh50 million Re-Takaful (or Sharia compliant reinsurance) window. Managing Director Jadiah Mwarania said demand for Shari’ah-compliant products has been growing and Kenya Re is seeking to ensure it retains existing business and expand into new markets. Kenya Re also launched a newly appointed board that would guide, monitor and supervise the new venture to ensure compliance with Sharia rules and principles. Mwarania expressed confidence that rekakaful would enable Kenya Re increase market share and attain financial growth.

Jaiz Bank Plc has said it increased its authorised share capital to about N11 billion from only about N5 billion in January 2012 when it commenced operation. The bank is currently financing critical areas such as Agricultural, Small and Medium Scale Industries and Home Finance. General Manager, Business Development, Mallam Hassan Usman said the bank's plan is to expand to 25 branches before the end of the year. Moreover, Jaiz offers financing products and services like other conventional banks except these are devoid of interest. The services are available to all irrespective of race or religion, he added.

The Arab Contractors (AC) has won a $30mln contract for the extension and modernization of the Abidjan International Airport cargo facilities in the Ivory Coast. The project is funded by the Islamic Development Bank and aims to create a commercial zone next to the airport, with a lodging area, hangars, a convention centre, a duty-free zone, office buildings, warehouses, exhibition halls, a shopping centre and housing for flying staff. Moreover, the Egyptian contractors will also have to refurbish the apron, renovate access roads and increase the terminal’s capacity from 11’000sqm to 26’000sqm.

The Kenya Reinsurance Corporation is planning to venture in sharia-compliant business and confirmed that it will start ReTakaful insurance in the country and the areas where it already has a presence in West Africa and the Middle East markets. According to the firm’s managing director, Mr Jadiah Mwarania, the development is part of Kenya Re’s 2013-2017 core strategic areas that touche on market expansion and development of products. The firm elected a sharia-based supervisory board last year to advise the firm on acceptable aspects of the ReTakaful.

According to a report from Standard and Poor’s, an increasing number of African countries are considering issuing sukuk to fund their huge infrastructure needs and to diversify their investor base. South Africa, Nigeria, Senegal, and Mauritania have all announced in recent years their intention to issue sukuk bonds. Moreover, following the Arab spring and the rising influence of Islamist parties in some countries, the development of Islamic finance has gained importance for their governments, for example in Egypt and Tunisia. Standard & Poor’s believes that sukuk issued by African sovereigns could address an investor base in the GCC or at the Islamic Development Bank.

In Sudan, the convening of the 5th Islamic Financial Industry Forum is going to take place during the period April 25-26 under the theme "Role of Islamic financial institutions in funding economic development projects.” Many international and Islamic financial institutions have been invited to attend the forum, including Islamic Development Bank, Saudi Development Fund, Abu Dubai Development Fund, Islamic Corporation for the Development of the Private Sector, Islamic Solidarity Fund for Development among others. Delegations representing the Oman Sultanate, Yemen, Egypt, Libya, Mauritania, Saudi Arabia and Bahrain are expected to take part in this annual event which is organised by the Khartoum-based Bayan Centre for Islamic Financial Engineering.

Speakers at the seminar titled "Agriculture and Micro Insurance: Experience in Afro-Asian Region" discussed the need for Shari'ah-compliant financial services, including Takaful insurance. One speaker said that many poor Muslims are financially excluded because of both involuntary and voluntary reasons. Therefore, providing Shari'ah-compliant financial services is needed to accelerate financial inclusion. At the same session, the speakers also discussed about how Takful (Islamic) insurance can solve challenges in the micro-insurance sector.

Dubai Islamic Bank, Sharjah Islamic Bank and Abu Dhabi Islamic Bank are more than tripling Bank of Khartoum’s capital to around $225 million after it gained a short-term ‘A-1’ rating from The Islamic International Rating Agency last week. Bank of Khartoum’s General Manager Fadi Faqih said its bank wants to boost its agricultural finance business by preparing a fund to attract direct investment from mainly Gulf banks to invest into Sudan's agricultural sector. Bank of Khartoum also plans to arrange Sukuk for corporate clients in the infrastructure and utility sector for some 150 million pounds this year.

Demographic dividends are usually explained in terms of higher population growth in emerging markets leading to an expanding working age population This in turn means that the society can benefit from having more people who are both able to work as well as eager to consume. However, neither high population growth nor a great amount of young people can on their own deliver better economic performance. Without adequate investment in educating, providing health care for the young and sufficient investment in the economy to generate productive employment, youth unemployment and underemployment with all the associated social and political problems is the consequence. So the challenge is how to ensure that the expanding young population in the developing countries is converted into demographic dividends. Financial inclusion is an important part of that, since its benefits are not just economic, but social and political as well.

The Islamic Corporation for the Insurance of Investment and Export Credit has entered into an agreement with Nigerian Export-Import Bank for promoting Nigeria's exports. The ICIEC will provide credit insurance and reinsurance support to NEXIM. NEXIM insurance underwriters would be provided training after which joint promotion would be undertaken in the Nigerian market, Dr. Abdel Rahman Taha, ICIEC's chief executive officer said.

The Islamic International Rating Agency (IIRA) has assigned a national scale long-term credit rating of 'AA-' (Double A Minus) to Bank of Khartoum (BOK) with a short-term rating of 'A-1' (A One). The outlook on the assigned rating is 'stable'. The fiduciary score has been assessed in the range of '70-75', reflecting adequate fiduciary standards wherein rights of various fund providers are adequately defined and protected. BOK is the first financial institution to have been rated in Sudan.