IslamicFinance.de

According to an announcement by Abu Dhabi Islamic Bank (ADIB), the bank plans to expand its original footprint by launching its branch in Khartoum in Sudan. Thus, ADIB becomes the first UAE-based Islamic financial institution which has received a banking license from the Sudanese Central Bank. A Wealth Management and a Corporate Banking Centre will be established alongside the provision of the bank's award-winning products and services. This way ADIB will ensure a leading platform for Shari'a-compliant banking in Sudan and will be able to contribute to the economic development of the country.

Mauritania is working on the development of an Islamic interbank market. The initiative has already begun with the establishment of several Islamic banks. Recently, the Central Bank of Mauritania (BCM) conducted a study on the potential development of a local Shari'ah-compliant securities market. The study was made possible with technical help and expertise of IFAAS (Islamic Finance Advisory & Assurance Services).

On Tuesday afternoon, Caretaker Prime Minister Hamadi Jebali, Sheikh Jassim Ben Hamad Al Thani and Board of Directors' President of the Qatar Investment Bank "Qinvest" and Qatar International Islamic Bank had a conference. The meeting enabled examination of the means likely to boost co-operation between the Tunisian government and the Qatari banks in terms of finance and infrastructures. The key role of dollar denominated sukuk issuance was pointed out.

Reporting to the Head of Risk and Compliance, the successful candidate will identify measure and analyze the various enterprise-wide operations risks that the Bank faces and formulate strategies on how to mitigate and minimize the risk exposures.

The Islamic Corporation for the Development of the Private Sector gave start to a fund aiming to finance renewable- energy projects in Central Asia and plans another in Africa. The fund is worth $35 million and is situated in Kazakhstan. In the very near future the North Africa fund containing $35 million to $50 million is to be opened. Financing for renewables ventures is targeting emerging markets due to the governments' striving to curb reliance on fuel imports and cash-strapped nations in Europe cut subsidies for clean power.

Banque Populaire de Mauritanie (BPM) recently announced its decision to use Path Solutions's new iMAL as its Islamic Core Banking Solution in order to keep up with the national and international competition in terms of functionality and technical state. According to Limam Ould Ebnou - AGM of Groupe Mauritanie Leasing, the owner of BPM - Groupe Mauritanie Leasing is set to diversify their activities. Banking operations compliant with Islamic law are a key area in the financial group's plans. Thus a suitable alternative to conventional banking and the establishment of socio-economic infrastructure in the country can be ensured.

The practitioners report “Believers in the Boardroom. Religious Organisations and their Shareholder Engagement Practices” by 3IG is online. Please access the practitioners report by clicking on the following link :

http://issuu.com/3ignet.org/docs/3ig_rse_practitioners_report_final_2012...

The report also remains available as hard copy: http://www.3ignet.org/documents/OrderRSEresearchnow.pdf

The Bank of Ghana (BoG) has indicated that it might consider introducing Islamic finance to Ghana provided that the prospects are positive. There have been arguments among industry players whether or not Islamic banking is a potential solution to the high interest rates challenges for the private sector. According to Dr. Henry Wampah - Acting Governor of the BoG - the bank intends to consider this matter in the very near future.

Dear Reader,

The issue of debt vs. equity is now going to be increasingly recognised - in microfinance - as I found out today on the cfi blog:

"Debt to Equity. The demand for equity and subordinated debt is huge and continuing to grow, mainly coming from mature MFIs. More MIVs are moving away from debt toward equity, being driven in part by a desire to be more involved in governance, to play a larger role in risk management, and because the regulators are requiring more capital. Also, fund investors increasingly want to know how much of a fund’s return is coming from debt versus equity. Some of the larger DFIs need to disburse large amount of funds, so they have to make debt investments, leaving an unmet demand for equity."

http://cfi-blog.org/2012/11/19/microfinances-new-normal/

An important food for thought beyond microfinance itself in my opinion.

Best regards,

Michael Saleh Gassner

Two new Islamic banks are planned to be opened in Mali and Benin by the Islamic Corporation for the Development of the Private Sector (ICD). The openings are scheduled for next year. The initiative is part of the efforts to expand the industry's consumer base in Africa. According to Khaled Al-Aboodi, the development of Islamic banking in Africa is more important in terms of supplies than in terms of the potentially massive demand. ICD further intends to establish Islamic financial institutions including banks and takaful insurers in Africa. The established in 2009 Tamweel Africa Holding (TAH) is to contribute to the establishment, acquisition and management of Islamic financial institutions in West Africa.

The initial storm regarding the introduction of Non-Interest Banking (NIB) is gradually settling down. Now it is important to start exhuming the challenges that might crop up in its operations. Especially the taxation of the sub-sector by the relevant tax authorities and the corresponding setting of standards for the type of taxes that apply and that are to be collected from the transactions is extremely important. If the CBN manages to meet the regulatory requirements, it is empowered by law to issue licenses to appropriate entities for the establishment of non-interest banks.

There have been some particularly noteworthy events during Sanusi's leadership at the Central Bank of Nigeria. First of all, he expressed his criticism of the 7-point agenda of late President Umaru Musa Yar' Adua during the confirmation hearing at the Senate in June 2009 and received high publicity. After his appointment as CBN Governor, he found confirmation of his suspicions that some Nigerian banks were just giving high figures to give the impression that they were doing well. It is obvious that Sansui's passions include banking, quest for justice, philanthropy, insightful intervention in public discourse, and vigorous defence of his own opinions. He is a contradictory person since he is supervising a western type of banking which is not in the least compatible with the Islamic heritage.

Recently, the Islamic Banking Summit Africa (IBSA) started at the Djibouti Palace Kempinski, Djibouti. The main purpose of the event is to make use of the Africa opportunity in Islamic finance. More than 200 leading figures in the international Islamic banking and finance industry took part in the discussions on the topic. A special address by Ismail Omar Guelleh, President of Djibouti, and a keynote address by Djama M. Haid, Governor of the Central Bank of Djibouti, were included in the summit. Key challenges for Islamic banking in Africa were analyzed and discussed at length.

Saba Islamic Bank of Yemen and Dahabshil Bank of Djibouti are making plans to engage in operations in Somalia in the coming year. Basel Haj-Issa, the new CEO of Saba Islamic Bank, said at the Islamic Banking Summit Africa in Djibouti that the reason for the bank's expansion into Somalia is the client demand. Since trade between Djibouti and Somalia is quite intensive, many clients of the bank need Islamic banking services in the country.

The two-day inaugural Islamic Banking Summit Africa (IBSA), which was held at at the Djibouti Palace Kempinski, Djibouti, focused on topics concerning 'capturing the Africa opportunity in Islamic finance'. More than 200 leading figures in the international Islamic banking and finance industry took part in the discussions. The event was officially supported by the Central Bank of Djibouti. The programme of the first day included keynotes from President of the Republic of Djibouti Ismail Omar Guelleh, and Governor of the Central Bank of Djibouti Djama M. Haid.

The Islamic Corporation for the Development of the Private Sector (ICD) considers opening two new Islamic banks in the countroes of Mali and Benin in the coming year. This was announced by the CEO of the ICD - H.E. Khaled Mohammed Al-Aboodi - at the Islamic Banking Summit Africa in Djibouti. This way, Islamic financial services can be provided in a greatly underserved area. Furthermore, the corporation intends to issue a $200 million Sukuk which is to serve the Government of Senegal to provide liquid Islamic products for Islamic banks.

Over 200 leading figures in the international Islamic banking and finance industry took part in the inaugural Islamic Banking Summit Africa in Djibouti. They discussed various topics concerning capturing the Africa opportunity in Islamic finance. The two-day was held at the Djibouti Palace Kempinski and was officially supported by Central Bank of Djibouti. On the summit, it was pointed out that Africa was becoming an increasingly attractive destination for Sharia-compliant investments.

Well, repeatedly we read and hear about the lack of profit/loss sharing (equity finance) in Islamic finance. Here my five cents about it:

1) Islamic commercial law, Fiqh Muamalat, per se has no preference of either permissible mode of finance, be it musharaka, ijara or murabaha whatsoever. All is halal. However, the call for modesty of debt in many hadith and the seriousness of being indebted upon death (withholding of death prayer) shows a call for a solid equity portion in business; let's call it a technical preference.

2) If we look up all debt financing modes (e.g.Murabaha, Ijara) there are remaining difficulties to finance wages, rents and installments on fresh debt. This is a true indicator for a required minimum amount of equity in a company.

3) Point 1) and 2) leads us to demand a sound debt/equity ratio.

IslamicFinance.de offers an overview about new job openings of October 2012 herewith - firms aiming to be included please send a job profile/hyperlink to newsdesk@islamicfinance.de - the full details of the advert has to be accessed by the hyperlink below the brief description:

Product Manager, Islamic Banking

Standard Chartered Bank - United Arab Emirates-SCB (United Arab Emirates)
Job Description
?Development of Islamic wealth products across CBMS, insurance and investment streams to create customer value proposition.
?Ensure successful implementation of the Islamic banking strategy across high value segment.
?Concentrated responsibility to work with the Priority/Wealth/Private/SME product/frontline teams and support functions to build on the current Islamic banking capabilities and to create seamless customer experience
?Act as a product specialist for RMs on client meetings to introduce and explain the Saadiq solutions to meet their needs
?Financial budgeting and business forecast. Evaluation of financial performance.

There has been a noteworthy growth in trade between African countries and the rest of the world. Trade with the Gulf region especially has increased 170%. African countries are in the process of changing from dependent on external aid to closely tied with the Middle East in terms of trade and investment. This makes Islamic finance a key factor in facilitating further development of trade and investment flows between Africa and the Middle East. Moreover, this is particularly important for providing funding for key areas such as SMEs and project finance.

Read more on: http://www.tripolipost.com/articledetail.asp?c=2&i=9396