IslamicFinance.de

Malaysia's government through Deputy Prime Minister Ahmad Zahid Hamidi issued a startling statement saying the Swiss attorney- general should not have made public his request for Malaysia's help into 1MDB probe. More specifically, it was related to the US$4 billion (RM16.6 billion) suspected misappropriations by 1MDB and possible violations of Swiss law. The government must be very nervous since Switzerland is no longer the safe secret haven for ill-gotten funds as its banking secrecy law is no longer what it used to be. Since the Swiss AG's report mentioned possible involvement of former Malaysian government officials, Putrajaya is getting plenty of sleepless nights.

Worried by turbulent developmental challenges facing the Northern part of Nigeria, selected Governors from the northeast, northwest and north central, representing the 19 Governors of the region, will on Sunday begin a three day meeting with top executives of Islamic Development Bank (IDB), at the bank’s headquarters in Saudi Arabia. The parley deliberated on ways of tackling challenges of Agriculture, poverty, education, maternal mortality ?and other problems most prevalent in the north than any part of Nigeria. In subsequent days, the Governors will hold different meetings with the Islamic Corporation for the Development of the Private Sector (ICD), International Islamic Trade Finance Corporation, ITFC and the Islamic Corporation for the Insurance of Investment & Export Credit (ICIEC), Islamic Research and Training Institute (IRTI), Islamic Solidarity Fund for Development (ISFD).

Fixed term deposit accounts, which pay an “expected profit rate” instead of interest, beat the best fixed rate bonds when it comes to earnings. HM Revenue & Customs (HMRC) confirmed that profits from Sharia accounts would count towards the personal savings allowance. Where returns are the economic equivalent of interest (and meet certain other criteria) they are taxed as if they are interest - and will be included within the definition of savings income, according to HMRC. This means Sharia compliant savers will be able to take advantage of the new £1,000 tax free interest earnings allowance if they are a basic rate taxpayer (£500 for higher rate taxpayers).

President Beji Caid Essebsi and the Bahrain Prime Minister agreed to restart the mega project Tunis Financial Harbor, said official spokesman for the Presidency of the Republic, Moez Sinaoui. This mega project is financed by the Gulf Finance House, an Islamic Investment Bank of Bahrain, with a budget of 7.5 billion dinars. It will set up the first financial center for offshore banking institutions in North Africa. The Financial Harbor will house a set of shopping centers and residential units and recreation spaces: marina, golf courses.

The Central Bank of West Africa’s CFA-franc zone (BCEAO) has signed an agreement with the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD), to help finance Small and Medium-sized Enterprises (SMEs) through a $100 million Islamic fund. The ICD will commit an initial $30 million for the SME fund and will help seek additional investors to increase the amount to $100 million while the implementation monitoring was entrusted to the BCEAO. The Central Bank also committed to supporting SMEs by providing incentives to credit institutions, as well as developing complementary leasing and venture capital instruments.

There’s so much more to finance than just returns, says alternative finance expert Tiara Letourneau (Cambridge Judge Business School MFin 2014). She believes that, used wisely, financial systems can make the world a better place, on both an individual and a global level. Letourneau is now based in Seoul, South Korea, in a new role – strategist at the Green Climate Fund. It’s a global platform, accountable to the United Nations, set up by 194 governments to respond to climate change by investing in low-emission and climate-resilient development. The private sector is needed to invest in projects that will enable the switch to low-emissions technologies, says Letourneau. It’s a big challenge – one of the biggest. And to Letourneau, it’s yet another opportunity to use financial systems to make the world a better place.

It took a Malaysian lender more than 10 years to complete its conversion to a fully-fledged Islamic bank, highlighting the challenge for countries such as Indonesia in their bid to become Shariah funding hubs. Agrobank would have given up its ambition to be Shariah-compliant had there been no commitment from employees and directors, said Chief Executive Officer Wan Mohd Fadzmi Wan Othman. The process was “grueling,” involving numerous meetings with staff and customers, and redoing all documentation, he said. The plan was first announced in 2004, derailed and then revived in 2012. Agrobank’s experience with complex approvals and legal hurdles brings to focus the uphill task for nations seeking to become financial centers for the $2 trillion industry.

Kenya is preparing to allow the use of Islamic finance, and is even preparing to launch its first sukuk. Speaking at the International Islamic Finance conference of Africa in Nairobi on Monday, Treasury Secretary Henry Rotich said that the Kenyan government would adopt legislation that would make Islamic finance possible. The conference is intended to aid developing countries in Africa to tap into the $2.1 trillion market of Islamic finance, using it as a catalyst of economic growth. Kenya can learn about the application of Islamic finance by taking advice from Muslim countries, Rotich said. Policymakers’ business leaders and government officials spent Monday and Tuesday speaking on how Islamic financial principles can help combat poverty and alleviate poverty in Africa.

President Uhuru Kenyatta is hosting two leaders of Africa’s Ieading economies, Muhammadu Buhari of Nigeria and Abdel Fattah el-Sisi of Egypt. These visits are to be viewed within the prism of Uhuru’s broader strategy of economic, trade, and cross-cultural bridgebuilding. They underline his growing clout not just in trade and commerce, but also in the cut-throat arena of global geopolitics and nuanced national interests. The booming African Islamic economy provides an opportune vehicle to ameliorate the deprived conditions and lack of economic opportunity. It is a perfect fit for our infrastructure financing needs. Uhuru signed three agreements and four MoUs to promote trade between Kenya and Nigeria in June 2014 – on Trade and Agricultural cooperation, immigration and drug trafficking. A Joint Business Council was formed.

Hosted by Operation HOPE in January in Atlanta (Georgia, USA), the 2016 Hope Global Forums Annual Meeting convened to Reimagine the Global Economy with a focus on 'Inclusive Economics'. Setting forth a goal to outline a solid vision for today's global economy, the meeting connected global leaders and Nobel Prize winners with government officials and the private sector. Leading the efforts to deliver youth financial literacy in the region with the Riyali financial literacy program, SEDCO Holding Group participated in this fourth edition of the Hope Global Forums. The three-day Annual Meeting topics covered the new and modern global economy, and demonstrated how community can serve as a call to action to inspire innovation and thought leadership to achieve economic growth and financial stability.

According to the official statistics, nearly 85 percent of the Kuwaiti population is still employed by the government. While the last decade has showed a surge in entrepreneurial initiatives, roadblocks and barriers remain. There have been many initiatives for and by entrepreneurs, such as support organizations, bazaars, and farmers markets that were geared toward small businesses and entrepreneurs, many of them just in their first or second year of operation. In 2010, Kuwait passed its first long-term development plan in almost 25 years. The government planned to spend $104 billion over four years to diversify the economy away from oil, and to boost private sector participation in the economy. Young business people are extremely supportive of the government’s initiative and focus on SMEs.

For over 6 million Pakistani smallholders with 10 acres of land or less, financing options are very limited and prevent them from building assets over time. Thus, farmers tend to do what has been done for centuries: use Artees, middlemen who have long responded to their agricultural and personal financial needs. Artees directly provide farmers with seeds and fertilizers, and collect the equivalent amount in crops at harvest time. According to some estimats, Artees finance at least 50% of smallholders in Pakistan. Since 2009, farmers in Punjab have had another financing option called Salam, which seeks to give them a bigger role in the decision-making. It is offered by Wasil Foundation.

Here are four five theses, which introduce P2P's special wiki section on Mutual Coordination Economics: 1. Today we have the emergence of a new proto-system of production, Commons-Based Peer Production in which contributors are free to contribute to a common pool of shareable knowledge, code and design. 2. This emerging new system of value creation and distribution is not sustainable if contributors need to find work as labour for capital. 3. To achieve this, we advocate the use of Commons-Based Reciprocity Licenses such as the Peer Production License. 4. The production of immaterial common pools is already regulated through mutual coordination and stigmergy, i.e. coordination based on open and transparent signals of what is needed by the system.

For Iran to resume business with the global banking world - for the first time since 2012 - its banks need to be linked to overseas lenders on SWIFT. The system, the Society for the Worldwide Interbank Financial Telecommunications, is used to transmit payments and letters of credit. A senior official with Iran's central bank said that all the private and state-owned banks have taken the necessary bureaucratic steps, regarding rejoining the SWIFT system. While international banks are expected to link up with their Iranian counterparts via SWIFT, Iran will also be looking to encourage foreign institutions to expand involvement in the country’s financial system. But for many foreign banks, there are concerns about being caught up in ongoing U.S. sanctions.

Togo has reportedly signed three funding agreements worth 194 million U.S. dollars with the Islamic Development Bank (IDB). The agreements were signed Wednesday in Jeddah during the visit to Saudi Arabia by Togolese President Faure Gnassingbe. The first agreement worth around 131 million U.S. dollars concerns the construction of Adoua-Kara road which links five regions in Togo. Its completion will enable Burkina Faso to have direct access to Lome port. The second funding agreement will go towards improving and expanding access to basic education as well as supporting concerned institutions. The third agreement concerns the energy sector. It will see 46 million dollars spent on electrification of 43 villages in northern Togo.

Iran's capital market regulator wants to develop a market for mortgage-backed securities (MBS) and has published rules covering them, the latest move by authorities to revamp the financial sector. MBS could help to stimulate the debt market and spur housing construction in the country of about 80 million people. Iran has seen some issues of MBS but on a small scale, and active trade in them has not developed. The new MBS rules, released by the SEO last week, include strong consumer protection features. They also feature some particularly Iranian aspects that make them different from similar securities elsewhere. The central bank uses tools such as reserve requirement ratios and open market operations to conduct monetary policy.

It is a common perception that the Arab world lags behind when it comes to financial inclusion. According to the 2014 Findex figures and excluding Gulf countries, the region indeed reports the highest percentage of financially excluded adults, with 80% of the population or about 200 million not having access to an account, and 95% not having access to credit. Yet, this has not always been the case. However, limited advocacy efforts concerted from within the industry as well as a lack of champions within public authorities both played a contributing factor here. Microfinance professionals can attest that 2010 marked the beginning of a new era, with positive signs of long-lasting, albeit arduous, change.

Banks from the UAE, Oman, Qatar and Kuwait have reportedly spent months drawing up plans for entering the Iranian market. There are certain regional institutions taking legal advice to manage very real risks associated with doing business with Iran, according to Stuart Jones Jr., an executive director at EY. Any re-engagement with Iran will take place in several stages and will require updates to policies, procedures, systems and controls as well as ongoing communication with regulators and correspondent banks, Emirates NBD said, adding it did not currently have any material assets or liabilities in Iran. The Persian Gulf banks are weighing re-entry into the Iranian financial system after it was announced that the implementation of a nuclear deal finalized by Tehran and world powers back in July 2015 has officially been started.

The deputy governor of the State Bank of Pakistan has announced that the bank is setting up a Shariah-compliant open market to manage liquidity of the Islamic banking sector. Deputy Governor, Saeed Ahmed's announcement came on Wednesday as he addressed the global forum on Islamic economics, banking and finance arranged by the University of Management and Technology's Institute of Islamic Banking and Finance. In his speech, he reiterated his bank's commitment to promoting and developing the Islamic banking in Pakistan. The existing banking laws are being amended and soon this process will be finalised, he said. Those who too addressed the forum were Islamic finance scholars Mufti Muhammad Taqi Usmani, Justice Khalil-ur-Rehma, among others.

From Oman to Algeria, the MENA region is being hammered by low oil prices, which fell below $28 a barrel on January 18, a drop of more than 60% since June 2014. Some countries have been hurt particularly hard. In Libya, for example, the World Bank estimates that the fiscal deficit is more than 55% of GDP and the current account deficit is about 70% of GDP. In Saudi Arabia, central bank reserves have plunged from $732 billion to $623 billion in less than 12 months. Some 75% of the Saudi government’s budget comes from oil. Given the deficit, the International Monetary Fund (IMF) notes that Saudi Arabia needs to sell oil at around $106 a barrel to balance its budget. A regional country that could potentially do better in 2016 is Iran.