IslamicFinance.de

The seminar titled "Islamic Microfinance - Approaches & Practices: A Case Study of Akhuwat" was held in Pakistan last Wednesday. Various initiatives of Islamic microfinance in Pakistan, their philosophies and methodologies were highlighted in the seminar and the case of Akhuwat Foundation was discussed as a case study. It was also observed that Islamic microfinance was still in its evolution, and speakers therefore gave recommendations for further growth and strengthening the operations of Islamic microfinance institutions.

During the last ten years, Pakistan-based Akhuwat, the world’s first completely interest-free microfinance program, has disbursed $30 million to over 1 million people, without charging any interest. The company now has more than 1,000 regular employees and offices in 105 cities of Pakistan across the country. Their mission is to challenge the interest based system and challenge Islamic finance to evolve out of its current complacency with interest-mimicking products towards products based on the foundational principles of equity, sharing, and gifting and therfore fight poverty.

The Reserve Bank of India (RBI) has taken a positive approach to the suggestion of an alternative banking system for Muslims after K. Rahman Khan, Minister for Minority Affairs, emphasized that it was the duty of the State to facilitate every citizen to practice and follow his/her religion. The RBI Governor pointed to the need for certain amendments to the laws concerned. The Minister said, in India the biggest issue was who should regulate the proposed alternative system, as it needed a strong monitoring mechanism. He added that concrete efforts should be made, such as setting up an expert committee to draw up a framework of an alternative banking system, along with a strong legal system to back it.

Siti Aminah Hj Abd Rahman, senior officer in Wealth Management at Baiduri Bank, spoke during a financial planning forum at the Ministry of Finance. She said a person's expenditure and lifestyle should be based on his or her income and explained the four concepts of financial planning. She also urged participants to consider insurance to protect themselves and loved ones, and added that those who are looking into investing should make sure to study the investment. Takaful Brunei Keluarga Senior Executive Officer Noor Amal Fitriyah Abd Rahim, emphasized the importance of insurance during her speech and recommended to being prepared to settle and manage debts as part of financial planning.

A group of mainly Malaysian academics and organizations published an advertisement in The Sun Daily asking Bank Islam Malaysia to lift its suspension of chief economist Azrul Azwar Ahmad Tajudin. According to the 135 professionals, politicians and academics and 59 organizations, Azrul had given a professional opinion based on economics and that his academic freedom should be respected.

Azrul Azwar Ahmad Tajuddin, Bank Islam’s recently suspended chief economist, is a member of the party PKR. However, PKR vice-president Mohd Azmin Ali said that Azrul’s party membership was irrelevant to his recent prediction that Pakatan Rakyat would win the 13th general election and that the analysis he gave is a professional opinion based on strong figures. However, Bank Islam released a statement yesterday saying the suspension was unrelated to Azrul’s personal political views.

Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia, reported a 24.3% jump in the net value of its investment portfolio in 2012, a profit before taxes of 2.1 billion ringgit, and a dividend payout to the Malaysian government of 1.0 billion ringgit. Khazanah cited its property development investments in Malaysia as well as initial public offerings by portfolio companies IHH Healthcare Berhad and cable-TV network Astro Malaysia Holdings Berhad as factors contributing to its annual gains. In a separate announcement, Khazanah and Sun Life Financial Inc. announced plans to acquire insurance joint ventures CIMB Aviva Assurance Berhad and CIMB Aviva Takaful Berhad for C$586 million (US$594 million) from Aviva PLC. The deal is expected to close during the first half of 2013.

Indonesia, the country with the world’s largest Muslim population, is developing its Islamic finance industry. It’s speeding up government approvals and fixing a fragmented regulatory system as part of an effort to reach more unbanked Muslims and increase the portion of Islamic assets in the banking system to 15 percent by 2017, from 4.3 percent. Currently, Indonesia ranks fifth in the amount of outstanding Islamic bonds, the number of Indonesians using Islamic financial products increased 36 percent over the past year. However, that’s still only 13.4 million people in a country of 208 million Muslims, which shows Indonesia's growth potential regarding Islamic finance.

A senior Islamic Bank of Thailand (IBank) executive has affirmed that the bank’s financial status and liquidity are normal despite its non-performing loans (NPLs) at Bt39 billion, 20 per cent of its total lending. Thanin Angsuwarangsi, IBank manager, said Bt24.3 billion debts are being negotiated by the bank and debtors and the majority are willing to discuss debt resolution on the NPLs with the bank. After a restructuring of IBank’s role, it will emphasise giving loans to Muslim Thai people and small-time business operators. Mr Thanin believed the problem of Bt39 billion NPLs will be solved in three years, adding that IBank officers who are found to unscrupulously offer loans to customers will be legally dealt with.

Strong investor demand and a need to improve capital adequacy ratios are causing Turkey's Islamic banks to consider issuing subordinated sukuk. Ibrahim Oguducu, head of the financial institutions business at Bank Asya, said longer-tenor subordinated sukuk would help balance mismatches between the maturities of banks' liabilities and assets, while diversifying their funding sources. Subordinated issues might not be expensive for Turkey's Islamic banks that have issued only two sukuk so far.

Former executives of the Islamic Bank of Thailand who did not adequately pay attention to cash flow, collateral value and monitoring, are to be blamed for the high amount of bad dept at IBank, according to its new president Thanin Angsurarangsit. Non-performing loans at IBank currently amount to Bt39 billion, or about 30 per cent of outstanding loans. Moreover, the Finance Ministry is investigating possible corruption at IBank. The bank will try to maintain its lending at Bt120 billion this year. New lending to large corporates will be reduced as the bank focuses on retail clients who are Muslims.

Indonesia's Finance Ministry is targeting Rp 15 trillion ($1.55 billion) from issuing rupiah-denominated sukuk to its citizens as part of the country’s effort to plug the budget deficit. Dahlan Siamat, director of Islamic financing at the Finance Ministry’s debt management office, said that the sukuk would use government infrastructure projects such as toll roads and bridges as the underlying assets. The government set the annual coupon rate of the rupiah sukuk at 6.0 percent with a tenor of three years.

The government of Pakistan raised Rs182 billion through a Sukuk against the security of Jinnah International Airport Karachi for budget financing. The Sukuk operations were launched through the Pakistan Domestic Sukuk Company Limited. However, analysts question the use of Islamic bonds for budget financing and linking the return with treasury bills, saying it is forbidden and against Shariah laws. In the last fiscal year, the government borrowed a total Rs412 billion through Sukuk, enabling it to meet 23.2% of financing needs.

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.

A mass awareness campaign to increase public trust and confidence in Islamic banking, to be led by the Islamic banking industry with the support of State Bank of Pakistan (SBP), is being launched shortly. According to Deputy Governor of SBP Kazi Abdul Muktadir, the Islamic banking industry is still facing many challenges which include low awareness and understanding of public at large about Islamic banking and its distinction over conventional banking. The campaign is expected to lead to further acceleration in the growth of Islamic banking.

The Finance Ministry is supervising and working on a restructuring of The Islamic Bank of Thailand, or IBank. The ministry's approval for a capital increase depends on the success in the restructuring plan, according to Somchai Sujjapongse, the director-general of the Fiscal Policy Office. The bank is pursuing several options to recover debt, including filing court foreclosures or restructuring debt with clients. Mr Somchai stressed that IBank continues to operate normally, particularly retail lending operations, but has tightened underwriting practices for large corporate lending.

Technical report for free download regarding the Agricultural Development Fund (ADF), the first lender to the agricultural sector in Afghanistan in over 25 years, which was initially designed to be a wholesale lender utilizing existing financial institutions as conduits to reach farmers.

While the original design did not emphasize on the provision of Islamic financial products, there was the implicit assumption that with the help of technical assistance and grants some financial intermediaries would do so.

The Dhaka Stock Exchange (DSE) is planning to introduce an 'Islamic Shariah Index' to increase investment of Islamic Shariah-based banks in the stock market. A meeting was held with the representatives of Islami Bank Bangladesh in order to prepare a guideline for its introduction. According to DSE president and coordinator of the Stock Market Coordination Committee Rakibur Rahman, the DSE is also talking with the Standard and Poor's (S&P) for introduction of the new index.

?Accountable for the entire business portfolio of New Market Business Development function.
?To penetrate into the Non-Muslim market, especially in the higher purchasing power category focusing on Family Business.
?To recruit, train and manage the productivity of the New Market Agency force.
?To source, recruit and develop 'New Market' agencies.

•Possess minimum SPM with strong credits in English and Mathematics or STPM. Diploma in Business related courses is preferred.

•Preferably with one year customer service experience in a shopping centre or the hospitality industry

•Good command of English and Bahasa Malaysia. Ability to speak Mandarin would be advantageous