IslamicFinance.de

The International Monetary Fund warned that Gulf Arab states could burn through all their savings in the next 15 years as worries about climate change and supply from new competitors dampen oil prices. The stark alarm from the IMF comes as the island nation of Bahrain faced defaulting on a loan in 2018 and received a $10 billion bailout from its neighbors. According to IMF, the world’s demand for oil is expected to grow more slowly and eventually begin to decline in the next two decades. Oil production in the GCC represents 20% of global supplies. While GCC nations largely grew their reserves from 1997 to 2007, they began spending rapidly in the decade that followed. The monetary body recommended faster diversification away from an oil-based economy, a renewed push to save money and reforming the region’s large civil service.

Swiss fintech company Instimatch has launched into the Middle East, having won a licence to operate in Qatar, and signed up its first Kuwaiti bank. The company is poised to incorporate Islamic finance-compliant solutions and blockchain into its platform. Qatar's Masraf Al Rayan and Ahli banks are among the 80-plus entities signed up by Instimatch, along with Kuwait's Gulf Bank. Instimatch plans to have Qatar as a springboard for further expansion in the Middle East and later to Africa and Asia. Along with other countries in the region, Qatar recently launched a national fintech strategy to beef up its financial centre with digital innovations.

Malaysia's central bank Bank Negara Malaysia is pushing the financial sector to join the digital banking revolution. It is preparing the issuance of the country's first five digital banking licences. Digital banks also named virtual banks, neobanks or challenger banks predominantly deliver banking services through digital channels such as Internet portals and smartphone apps with minimal, if any, brick-and-mortar presence. Among the largest standalone digital banks globally are currently N26 from Germany, Monzo, Starling and Revolut from the UK, Chime from the US, Tangerine from Canada, Nubank from Brazil, Neat from Hong Kong and WeBank from China. In the Islamic financial industry examples are insha, a co-operation of Turkey's Albaraka Turk Participation Bank with German solarisBank, and some others such as Boubyan Bank. Adding to this, Qatar Islamic Bank as part of its digital transformation has developed a fully digital financing services arm. Malaysia could potentially join with digital Islamic banking services in case Maybank and CIMB receive digital banking licences.

President Joko Widodo (Jokowi) drew attention to Indonesia's financial inclusion index (FII) having risen from 67.8% to 76.19% in 2019. However, the index is yet below that recorded of neighboring countries in the ASEAN, with Singapore standing at 98%; Malaysia at 85%; and Thailand at 82%. Jokowi has highlighted the importance of prioritizing easy access to formal financial services for all people. He has called to develop internet-based digital financial services, as internet users in Indonesia had reached 170 million, or some 64.8% of its total population. He also called to expand access to formal financial services through non-banking services, such as insurance, stock market, and pension fund, to support funding from domestic investors.

Cooperation between different groups was the focus of recent a two-day conference held at the World Council of Churches in Geneva, Switzerland. The conference titled: "FaithInvest: Impactful Cooperation" was sponsored by the Geneva Agape Foundation, World Council of Churches (WCC), and the UK-based group FaithInvest. The organizers of the conference said that churches and church-related institutions with their pension funds and capital invest billions of dollars worldwide. Bright Mawudor, head of finance and deputy general secretary of the All Africa Conference of Churches (AACC), spoke on sustainable church investments in Africa. He said the AACC has an ambitious plan to make the organization a 'donor' organization by 2025. Other speakers reflected on how to build innovative bridges using the United Nations and Geneva as a global center.

The well-known scholar and diplomat, Murad Hoffman, has passed to meet his Lord. May Allah have mercy upon him. Murad Hofmann was born a Catholic in 1931 in Aschaffenburg, Germany. He later studied at the University of Munich and Harvard University. Hofmann converted to Islam in 1980 as a result of witnessing the Algerian War of Independence, in addition to his admiration of Islamic art. His reversion was met with political resistance due to his high profile in the German government. Hofmann served as a diplomat for Germany for 33 years, beginning in 1961. He served as ambassador to Algeria and Morocco from 1987 to 1994, and was director of information for NATO.

The Abdulla Al Ghurair Foundation for Education (AGFE) has appointed Dr. Sonia Ben Jaafar as Chief Executive Officer. Dr. Ben Jaafar’s experience in the education development sector spans over 20 years in Canada, Africa, the Middle East and Asia. Her leadership roles working on major educational development projects include engagement with the American Institute of Research, Ericsson, UNESCO, UNICEF, and War Child UK. His Excellency Abdul Aziz Al Ghurair said that her commitment to inclusive and equitable quality education and promoting lifelong learning makes her an excellent addition to the AGFE team.

CIMB Islamic Bank has committed RM1 million per year, renewable annually for up to 3 years for the conservation efforts of Setiu Wetlands, Terengganu. The three-year project with a total potential commitment of RM3 million, is in collaboration with World Wide Fund for Nature Malaysia (WWF-Malaysia). The project contributes towards safeguarding Setiu Wetlands’ healthy and functioning ecosystem by establishing a critical knowledge base to guide sustainable development. This is CIMB’s third collaboration with WWF-Malaysia on strategic conservation projects, subsequent to the project in Ulu Muda, Kedah, and in Ba’ Kelalan and Long Semadoh in Sarawak.

A majority of people around the world believe capitalism in its current form is doing more harm than good. The survey was launched in 2000 to explore the theories of political scientist Francis Fukuyama, who after the collapse of communism declared that liberal capitalist democracy had seen off rival ideologies and so represented "the end of history". That conclusion has since been challenged by several critics. Of possible interest to corporate leaders gathering in Davos this week was the finding that trust in business outweighed that in governments and that 92% of employees said CEOs should speak out on the social and ethical issues of the day.

Turkey has been talking a lot about Arab purchases in the country. Most recently, the issue of Arab acquisitions has made headlines as part of a simmering controversy over a government plan to build an artificial waterway in Istanbul as an alternative to the Bosporus. Sheikha Moza bint Nasser, the mother of the Qatari emir, is among the buyers who have reportedly purchased 4.4 hectares of land in the area. While real estate sales to foreigners account for less than 3% of Turkey’s export revenues, Gulf investors hold only 9% of direct foreign investments in the country. In sum, any media buzz suggesting an Arab buying spree in Turkey is overblown.

Dubai Financial Services Authority (DFSA) has published the UAE’s first Guiding Principles on Sustainable Finance. The Guiding Principles are the result of co-operative efforts among a number of authorities in the UAE, namely the Dubai Financial Services Authority, the Central Bank, the Insurance Authority, the Securities and Commodities Authority, the Financial Services Regulatory Authority of the Abu Dhabi Global Market, the Ministry of Climate Change and Environment, the Dubai Islamic Economy Development Centre, the Dubai Financial Market, Nasdaq Dubai, and the Abu Dhabi Securities Exchange. The Guiding Principles are based on the United Nations Agenda for Sustainable Development and will serve as a catalyst for the implementation of the UAE’s sustainability priorities.

Since the global financial crisis of 2008, gross capital inflows to the Middle East and North Africa (MENA) have remained high compared to other emerging markets, but their composition has changed significantly. There has been a surge in portfolio flows (equity and bond instruments) and a decline in foreign direct investment. The inflows to the region surged to more than $155 billion over 2016–2018. About two-thirds of the increase can be attributed to a more favorable global risk sentiment. However, with global economic risks now on the rise, MENA countries would be particularly vulnerable if global risk sentiment shifts. Improved policy frameworks are crucial not only in attracting but also in preserving capital flows, while helping mitigate the risk of outflows. Countries will also need to undertake certain key structural reforms, including measures to strengthen financial supervision and regulation.

In this interview Stalla Cox CBE, the Managing Director of DDCAP speaks about her company and the evolving Islamic fintech scene. DDCAP Group was established over twenty years ago and has always selected its global expansion strategically. DDCAP opened in the Dubai International Financial Centre (DIFC) in 2008. Following the turn of 2000, there was significant repatriation of Shari'ah compliant capital to the Middle East. At a similar point in time, DDCAP was also invited by Bank Negara Malaysia to join a steering group that was formed in response to the Malaysian financial authorities granting permissions to Islamic banks from the GCC to do business locally. Consequently, a regional office was opened in Kuala Lumpur, Malaysia. The global financial services industry is moving at an incredible pace. With ETHOS AFP, DDCAP managed to create an enabling platform with global reach and provides a fully integrated treasury trading workflow for Shari’ah-compliant transactions.

Fintech is a crowded space, but a new subgenre is emerging to attract the world’s 1.8bn Muslims with a Shariah-compliant alternative. The new ecosystem includes Islamic online wealth managers like Wahed and streams of Islamic mobile-first banks, including the UK’s Niyah and Germany’s Insha. Over the last few months Insha has onboarded 12,000 users in Germany, aiming to have 1m across Europe by the end of 2023. Insha plans to draw in Turkish-born Muslims in Europe with its trilingual offering and to make speedy returns by offering mortgages immediately (supported by its partner bank). But for all its promise, Islamic fintech is still a hard sell, even for its target audience. Shariah law itself is complicated and Muslim-specific financial services aren’t always a good deal. Islamic fintechs will also need to compete with a wave of new secular, ethical banks like Bunq.

Despite having the world’s largest Muslim population and despite forming a dynamic emerging economy, Indonesia plays a small role only in the global Islamic banking industry. Islamic banking apparently has a hard time taking off in Southeast Asia’s largest economy. Despite the low penetration of Islamic finance in Indonesia, the country now ranks first in the Islamic Finance Country Index. The country has recently launched the Masterplan of Sharia Economy 2019-2024, with ambitious plans for the future.

Alliance Islamic Bank launched its Halal in One Programme, a halal enterprise ecosystem that aims to help small-and-medium enterprises (SMEs). The programme offers business owners solutions like business advisory, business matching services, and shariah-compliant financing. Alliance Islamic signed a memorandum of understanding with its strategic partner HQC Commerce Sdn Bhd (HCSB) in conjunction with the launch of Halal in One Programme. Alliance Islamic CEO Rizal IL-Ehzan Fadil Azim said SMEs in Malaysia have the advantage to tap into the global halal segment, where 90% of SMEs are not certified. He said Alliance Islamic's Halal in One Programme offers business advisory to help SMEs obtain halal certification from the Department of Islamic Development Malaysia.

The Qatar Financial Centre Regulatory Authority (QFCRA) announced that virtual asset services may not be conducted in or from the Qatar Financial Centre (QFC). The QFC is a business and financial center with its own legal, regulatory, tax and business infrastructure in Qatar that was created in order to attract businesses to the area and promote economic development. The regulator's decision came right after the country adopted new Anti-Money Laundering and Counter-Terrorist Financing norms. While some countries like Switzerland have opened up to the possibilities of digital assets, others see them as a threat to monetary sovereignty and have adopted a hard line.

The overall macroeconomic conditions have contributed to a slowdown in economic and banking growth. To address the challenges, the industry must come together to create a global ecosystem for Islamic finance. Currently, there are several disconnected hubs that each operate at different stages of their development. Emerging and frontier Islamic finance markets have a clear disadvantage. The industry needs to work to create a global ecosystem, driven by technology, that can narrow the information gap so that institutions in Africa and America have the same access as institutions in Bahrain, Malaysia and the UAE.

Malaysia becomes the latest to capitalize on the rising trend of digital banking with plans to issue up to five licenses.

A strategic partnership agreement had been signed, between Kuwait Finance House (KFH) and Entrepreneur Magazine. (KFH) asumes that they will sponsor the Entrepreneur platform for Kuwait with “Entrepreneur Middle East” which specializes in business entrepreneurship and young people’s initiatives.