IslamicFinance.de

While securities exchanges have been facilitating financial market transactions for centuries, the first social stock exchanges were officially launched only recently. These sorts of exchanges aim to connect social enterprises with so-called "impact" investors. Broadly, such an exchange enables private capital to be mobilised for public good. Yet we also need to recognise criticisms of such exchange platforms, as well as unintended consequences. We also need to ensure that mobilising private capital does not lead governments to shirk their responsibilities in dealing with those social and environmental problems that will not be addressed through market mechanisms.

The successful roll-out so far of a new “smart card” system to distribute subsidized bread has been a major achievement for Egypt’s government, saving money while earning praise from families who no longer have to wake early to fight for loaves. While the government still has a long way to go to roll out the new system countrywide, success so far marks an important civilian achievement for the president. The cards have so far been introduced in 17 of Egypt’s 29 provinces and consumption in those areas is already down between 15 to 35 percent. However, there are still worries whether the new smart card system is air-tight enough to squeeze out middlemen working the black market.

Pakistan's federal government on Friday launched the third round of Financial Innovation Challenge Fund designed to promote Islamic financing. The fund was launched with the assistance of the United Kingdom under the UKAid-sponsored Pakistan Financial Inclusion Programme being executed by the State Bank of Pakistan. The earlier two rounds focused on promoting innovative agricultural and rural financing in the country. Meanwhile, a steering committee constituted to promote Islamic banking has prepared an interim report and its recommendations will help in setting a roadmap and deciding a future course of action for providing an enabling environment for the growth of Islamic finance.

Pakistan's banking sector enters 2015 promising more deal-making activities. State-run National Bank of Pakistan has expressed interest in potentially acquiring Burj Bank Ltd. NBP recently said it will conduct due diligence on Burj, and hoped to complete the exercise in a ‘short timeframe’. The Burj deal is being closely watched by the market, as it has so far failed to meet the central bank’s minimum capital requirement (MCR) of Rs10bn. In case the deal goes through, it remains to be seen if Burj would exist as a standalone Islamic bank, or if its operations will be merged with NBP’s Islamic banking section.

Product innovation and enhancement is an important aspect for the development and growth of Islamic Finance. However, this is also one of the major challenges. To create products or services in Islamic finance, one should understand that there are two common ways — Shariah-based products, or Shariah-compliant products. The product development process should be governed by very prominent parameters, standards and framework to ensure that a proper product is introduced in the market. Needless to say, Islamic banking products are constantly being compared to interest-based products in terms of cost and return without any regard for the unique product rules of Shariah.

La compagnie d’assurance, Salama Assurances Algérie, devra clôturer l’année 2014 avec un chiffre d’affaires en progression de 4,6 milliards de dinars, a révélé son directeur général, Hadjou Abdelhakim. L’assurance automobile représente environ 72% du portefeuille de la compagnie, soit 4% de parts de marché. L’année 2015 sera donc riche, pour Salama Assurances qui compte non seulement de lancer un nouveau produit dédié aux agriculteurs, mais aussi ouvrir avec un partenaire local une nouvelle filiale d’assurance de personnes.

According to the Crowdfunding Research Centre, global crowdfunding activity is doubling every 60 days, and represents another potentially significant shift in that way entrepreneurs and start-ups access capital and credit in the developing world. A crowdfunding report speculates that the potential market size for crowdfunding in the emerging markets could reach $96 billion by the year 2025. The continued permeation of internet connectivity in emerging markets paired with further evolution of crowdfunding platforms holds tremendous potential for access to finance for the base of the pyramid.

Islamic investment bank GFH has reported that Bahrain’s High Civil Court has dismissed the Labor Case (amounting to $13.8 million) filed by Esam Janahi against GFH. The case had been filed by Janahi against GFH in June 2014, following several claims raised by the bank against him. All other cases filed by GFH against Janahi are still in progress. GFH also reported that the Bahrain Chamber for Dispute Resolution has awarded judgement in favour of GFH in a legal case amounting to $11.47 million (BHD 4.3 million) plus profits. The case was filed by GFH against Abu Dhabi Investment House and Qatar Entertainment City Company (QEC) pertaining to GFH’s investment in QEC.

Bank Islam Malaysia Bhd is offering a moratorium of up to six months for its financing products' monthly installment payments to flood-affected customers which include Personal Financing-i, Vehicle Financing-i and Home Financing-i. The "Prihatin Programme" aims to ease the financial burden during this emergency situation.

Russian lenders would like to tap Islamic finance just as the international sanctions and a low oil price brings their country to the brink of a recession. The Vnesheconombank is currently seeking advice from Middle East lenders on how to sell Islamic bonds. Banks and companies are seeking Shariah financing after the Russian currency recently weakened to an all-time low.

Dubai World can repay its 2015 maturity in full, while 2016 looks to be more challenging with approximately $6bn in restructured debt coming due, according to Jean-Michel Saliba, Mena Economist at Bank of America-Merrill Lynch. In the near-term, Dubai should be able to tackle refinancing challenges, but the possible increase in government external borrowing needs is set to take place against a more challenging backdrop, Saliba said. Direct impact of low oil prices will be more muted in UAE than in other GCC countries - thanks to Dubai's diversified economy, he added.

Africa is not only ready for Islamic finance but also is aiming to take its stand in the global Islamic finance arena, according to Abdelilah Belatik, secretary-general of Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI). Human capital development remains one of the main pillars in establishing sound Islamic financial services practices in Africa, especially with the recent regulatory development, he said. CIBAFI has completed a 'Certified Islamic Banker' training for 48 top level executives from 10 banks in Mauritania. The professional development training programme was co-organised by CIBAFI and the Islamic Development Bank (IDB).

Oman's Bank Nizwa recently held its 11th Sharia Supervisory Board meeting to discuss proposals for additional Sharia compliant financing solutions to meet the growing needs of the Bank’s individual and corporate customers. Dr. Jamil El Jaroudi, CEO of Bank Nizwa said the regular meetings allow the Bank to assess the performance of current products and services while also identifying the best approach for launching new propositions. The Board’s decisions are guided by the Islamic Banking Regulatory framework issued by the Central Bank of Oman, as well as the Sharia standards issued by the Auditing and Accounting Organization for Islamic Financial Institutions in Oman.

Amen Bank, Tunisia’s second-largest private sector bank, launched two Islamic mutual funds this week, managed by Tunis-based United Gulf Financial Services-North Africa. In October, El Wifack Leasing said it had received central bank approval to become the country’s third full-fledged Islamic bank, with 150mn dinars ($80mn) in capital, adding the firm would bring international shareholders to the venture. These are welcome steps for the Islamic finance industry which has been waiting for the government to issue a debut Islamic bond. Earlier this year the private sector arm of the Islamic Development Bank teamed up with Tunisia’s newly created sovereign wealth fund, Caisse de Depot de Tunisie, to set up a $30mn fund to support local businesses.

In line with its commitment to foster the cargo insurance facilities, Dubai Trade has signed an agreement with Dar Al Takaful to provide the marine and cargo insurance services through Dubai Trade's online platform "Tradeshield" which has been launched earlier this year. The agreement was signed by the CEO of Dubai Trade, Eng. Mahmood Al Bastaki, and Mr. Saleh Al Hashmi, the Managing Director of Dar Al Takaful . Dubai Trade allows clients to easily complete the end-to-end process of purchasing cargo insurance online through its website.

A combined team of partners and associates from the corporate and finance groups of Ogier's Cayman office recently advised Gatehouse Bank plc on its joint venture with Sigma Capital, for the construction of an initial 927 new rental homes, with a total development cost of approximately £110 million.

Tunisia's Amen Bank launched two Islamic mutual funds this week, managed by Tunis-based United Gulf Financial Services-North Africa. Moreover, El Wifack Leasing said it had received central bank approval to become the country's third full-fledged Islamic bank, with 150 million dinars ($80 million) in capital, adding the firm would bring international shareholders to the venture. These are welcome steps for the industry which has been waiting for the government to issue a debut Islamic bond. Meanwhile, the Islamic Development Bank teamed up with Tunisia's newly created sovereign wealth fund, Caisse de Depot de Tunisie, to set up a $30 million fund to support local businesses.

Bahrain-based Gulf Finance House has signed a joint venture with France's Alliance International Holding which is likely to kick-start the Tunis Bay project. Tunis Bay is part of the overall $3 billion Tunis Financial Harbour project. Alliance International Holding is a French consortium which specialises in the building of golf course projects and new community developments. It said it has signed a deal with the GFH-owned Tunis Bay Project Company which will see more than 800,000 sq m of land developed into a golf course with surrounding villas and apartments. Construction work by the joint venture will start next year as part of the first phase of the Tunis Bay development.

The Council of the Islamic Financial Services Board (IFSB) has today resolved to approve the applications of five financial institutions as Observer Members of the IFSB. The newly admitted Observer Members are: Bank Muamalat Indonesia; Mellat Investment Bank (Iran); Qatar First Bank; Turkiye Finans Katilim Bankasi; Al Masraf - Arab Bank for Investment & Foreign Trade (United Arab Emirates). The 184 members of the IFSB comprise 59 supervisory and regulatory authorities from the banking, capital markets and Islamic insurance (Takaful) sectors in 44 jurisdictions, as well as eight international inter-governmental organisations, and 117 market players.

Mishal Kanoo, deputy chairman of the Kanoo Group, believes that the big merchant families of the Gulf are the backbone of the regional economies, and that of the UAE. Most of them came into being around the time Gulf states won independence in the 1970s, so now they are in the third generation of ownership. This creates its own tensions. Part of the problem lies in the blurred distinction between ownership and management, he says. The other question is how to protect minority family members who do not wish to be involved in the management, but who have an economic stake in the running of the business.