IslamicFinance.de

The International Islamic Liquidity Management Corporation (IILM) has announced on monday that Dr. Umar Aimhanosi Oseni is their new CEO. (IILM) is an international consortium that issues short-term Shariah-compliant financial instruments to facilitate cross-border liquidity management for institutions that offer Islamic financial services.

Winner of the 2019 Islamic Development Bank (IsDB) Prize in Islamic Economics, Dr. Mabid Al-Jarhi, has delivered a lecture on the gains of switching from conventional to Islamic Finance. He argues that mainstream economics has many limitations, and therefore economists need to be able to identify the weaknesses and propose alternative frameworks. The principles of Islamic Economics provide such a framework. Prohibiting interest on money is not sufficient from an Islamic Finance point of view. Financing through trade contributes to addressing the inefficiency arising from search for trade partners. Together, prohibition of interest and financing through trade would improve allocation of resources in the economy. Dr. Al-Jarhi warns that there is a lot to be done to have a proper Islamic financial system in place. Proper regulations and governance are neccessary to address other kinds of inefficiencies arising from partnership of equity financing.

The first consumer sentiment survey conducted by Boston Consulting Group has found that GCC residents hold higher levels of financial optimism than their contemporaries around the world. Only in the UAE and Oman does the optimism level dip below 90%. Meanwhile, the optimism in Bahrain is as high as 96%. The respondents also reported stricter savings habits than international counterparts such as those in the US and Japan. Results from the survey suggest a potential boon to the food & beverage, non-luxury fashion, educational services, and out-of-home entertainment segments. Taken together, these factors represent a significant opportunity for expansion-minded companies. The survey also points to two other fertile conditions; exceptionally high internet penetration rates and a fledgling ecommerce culture.

Indonesian fintech Akulaku will launch its Shariah-compliant platform in the first half of 2021. The Jakarta-based company is a leading online multifinance provider in Indonesia and now it wants to enter the Islamic sector with Akulaku Syariah to tap into local demand. Akulaku in January raised $100 million from investors including Alibaba’s financial services arm Ant Financial. Akulaku disbursed around 4 trillion rupiah ($285.34 million) in loans during January-October this year and announced on Dec 12 that it wants to raise offshore financing to help it reach its target of 6 trillion rupiah next year. Akulaku started in 2014 with virtual credit cards and moved into providing services for a range of virtual payments, from phone and mobile top-ups to utilities bills. It now also offers P2P lending, financing, and e-commerce in Indonesia, and also has a presence in the Philippines, Vietnam, and Malaysia.

Assets worth over Rs 10 crore of a Bengaluru-based firm have been attached under the anti-money laundering law in connection with an alleged 'Islamic banking or halal investment' ponzi scam case. The accused firm is Ambidant Marketing Pvt Ltd and the case had made headlines last year in Karnataka. The firm is accused of collecting investments from customers under the Haj/Umrah plan in the name of 'Islamic banking or halal investment' and offering huge returns to the extent of up to 15% per month. The company was not authorised to collect such funds as it was neither registered with RBI nor with the SEBI under their collective investment scheme. The company had hired agents who would convince investors to invest in the plan by giving these agents a heavy commission. Initially, the company shared profits to the existing investors out of funds obtained from its new investors.

According to the World Wide Fund For Nature (WWF), banks belonging to the Association of Southeast Asian Nations (Asean) need to shore up regulatory safeguards to address the environmental and climate crisis. WWF’s Head of Asia Sustainable Finance Jeanne Stampe called on Asean banks to be more "proactive" in addressing environmental issues. In Malaysia, Singapore, Thailand and Vietnam, WWF found out financial regulators and banking associations expect banks to develop environmental policies on environmentally or socially sensitive sectors. But WWF said 43% of the banks assessed in these four countries mention having such policies in place, while only 15% disclose these policies. In light of this, WWF recommended regulators to provide more prescriptive guidance to enhance resilience and attractiveness of the finance industry.

According to the Global Islamic Fintech Report, P2P crowdfunding and challenger banking are the top expected growth sectors for Islamic fintech in 2020. The report is produced by London-based digital finance firm Elipses in collaboration with the UK Islamic Fintech Panel. The report finds that peer-to-peer and crowdfunding, the largest area to date, is set to remain so, with challenger banking seen as a significant growth area. The three other expected top growth sectors for next year are blockchain/crypto, robo-advisory/personal finance management, and lending. In terms of regions, 39% of respondents picked Southeast Asia as the one presenting the biggest growth opportunity for Islamic fintechs. The Middle East is the second biggest expected growth region, as chosen by 31% of respondents, followed by 16% who picked the UK.

The Sharjah Department of Culture is organising the 22nd edition of the Sharjah Islamic Arts Festival from 11th December 2019 to 21st January 2020. The new edition's theme, 'Prospect', will serve as a concept to unite artists and art enthusiasts. The festival will contain 253 activities in the form of exhibitions, lectures, and workshops. More than 28 organisations assisted in the coordination of the festival's projects. There will be 55 exhibitions at the Sharjah Art Museum, Al Majaz Waterfront, Maraya Art Centre and at other locations. These exhibitions will be presenting works of artists from the UAE, the neighbouring Arab countries, and other countries from around the world.

Crowdfunding markets have experienced a severe growth in recent years; however, this was mostly among non-philanthropic platforms. Philanthropic crowdfunding builds on a large group of individuals each donating a small amount online. Worldwide, philanthropic crowdfunding fulfills a small role, since only 15% of the total amount raised through crowdfunding is raised through philanthropic crowdfunding. The global crowdfunding activity mostly exists out of platforms from the United States, Asia and Europe. The US has the largest percentage of philanthropic crowdfunding projects. China focusses mostly on reward-based crowdfunding. In Europe the largest crowdfunding markets are the UK, France, Germany, and the Netherlands. Crowdfunding is not yet a growing industry in every region, with decreasing market-values among European-based platforms.

Pakistan sought financial and technical assistance from Islamic Development Bank (IDB) to establish an export-import bank to improve trade among Muslim economies. International Islamic Trade Finance Corporation (ITFC) is an autonomous body under the Islamic Development Bank that aims to promote trade to improve the economic condition of the people of Muslim countries. Minister for Economic Affairs Hammad Azhar said ITFC has provided financing facility to Pakistan to cover its oil and liquefied natural gas imports over a period of three years. Furthermore, he asked ITFC to develop training tools in Islamic banking as Islamic banking is very popular in the country.

The overall macroeconomic conditions, geopolitical tensions and the threat of trade wars have all contributed to a slowdown in economic and banking growth. The Islamic finance industry is no exception. As the industry reaches maturity in established Islamic finance markets in Malaysia and GCC, experts have predicted that growth would be mostly driven by emerging and frontier Islamic finance markets. Despite this, these markets have not demonstrated the level of growth that was expected, and a number of structural challenges continue to persist, such as standardization, awareness and access to information and expertise. To address these challenges, the industry must come together to create a global ecosystem for Islamic finance.

According to a new report "The Evolution of Wealth Management in the World of Islamic Finance 2019", demand for Islamic finance solutions is set to increase in the GCC and Middle East in the next five years. The report highlights that promoters of Islamic wealth management are gearing up to offer a greater array of wealth management solutions to a client base that is generating private wealth at a remarkable rate. The report finds that socially responsible investing (SRI) and products offering environmental, social and governance (ESG) standards are driving the increase in demand for Islamic wealth management solutions. The report also shows that Islamic finance is no longer a niche product for Muslim investors alone; more and more non-Muslim families and institutional investors are seeking both performance and long-term value.

According to UNICEF, investing in children is the fundamental solution to end child poverty and inequality and set the foundation for sustainable and inclusive economic growth. The statement was made during the Africa-China Poverty Reduction and Development Conference at the 10th Forum on China-Africa Cooperation (FOCAC). The 10th FOCAC Africa-China Poverty Reduction and Development Conference, co-hosted by China’s State Council Leading Group Office of Poverty Alleviation and Development (LGOP) and the Uganda Ministry of Agriculture, Animal Industry and Fisheries, had the theme of "Partnership for Transformation in Africa". Delegates expressed the urgent need to invest in social policies and infrastructures which combat child poverty in Africa, where around three out of every four children are affected by multi-dimensional poverty.

According to the State of the Islamic Economy Report 2018/19, Malaysia has been the leader of the Islamic economy ecosystem for five consecutive years. In addition to Malaysia’s impressive performance as the front-runner in the commercial sector of Islamic finance, perhaps it is time for the country to gear itself up to also lead the revitalisation of Islamic social finance instruments. These instruments could play a vital role in reducing poverty and addressing challenging socio-economic problems such as education, unemployment, malnutrition and health issues. In Malaysia, the utilisation of philanthropic Islamic social finance instruments such as zakat and waqf seems to be restricted because of regulatory hurdles. The concept of sadaqah seems to be underutilised, although there is a huge potential in it. A product called Sadaqa House, initiated by Bank Islam Malaysia Berhad (BIMB), is an example of its application.

GFH Financial Group, the Bahrain-based Islamic investment bank, plans to invest $200 million (Dh734m) in the privately-owned schools sector through its new investment platform, Britus Education. Developed and emerging markets have both seen a surge in private education during the last decade. Britus Education will invest in mid-market schools that can be improved through maximising student capacity, improving academic outcomes and optimising fee structures. According to a report published by Alpen Capital, the total number of students in GCC schools is set to grow at a compound annual rate of 2.3% per year to reach 14.5 million in 2022. Enrolment in private schools is expected to grow at a compound rate of 4.1% per year until 2022, much faster than the 1.3% growth anticipated for public schools.

Peer-to-peer lending platform Beehive has released an insightful new report revealing the state of MENA's SME ecosystem. The report is based on a survey of 175 SME owners and senior management and a roundtable of 13 prominent SME founders / CEOs. Key findings from the report include: surveyed MENA SMEs have more women in senior positions than the global average. 28% of respondents see innovation as a priority for growth, yet only 2% of business owners are currently trying to access finance to fund it. SMEs offer young people a great opportunity for development. 48% of SMEs would hire someone under 25 with no experience. The report focused on key areas that impact SMEs such as talent acquisition, innovation and growth factors. The survey results showed positive indicators such as SME appetite for market expansion and the opportunity for women in business.

The domestic capital market is expected to play a critical role in helping Malaysia meet the estimated RM45 billion required to finance its long-term sustainable development goals. Securities Commission Malaysia (SC) chairman Datuk Syed Zaid Syed Jaffar Albar said climate change poses physical and financial risks to companies. The change to more sustainable practices requires investments in new technologies and funding which carries risks with indeterminate outcomes. Malaysia alone is projected to require RM45 billion in the next five years. Therefore, the SC released the sustainable and responsible investment (SRI) roadmap to establish the country as a regional SRI centre. The roadmap identified 20 strategic recommendations based on the SC’s five i-Strategy: the widening of the range of SRI instruments, increasing the SRI investor base, building a strong SRI issuer base, instilling a strong internal government culture and designing information architecture.

The Malaysian government is currently looking into various avenues in Islamic finance which can be used to make houses more affordable. Deputy Finance Minister Datuk Amiruddin Hamzah said that one state in the northern region is currently conducting a waqf housing scheme for the people. He said this at the sidelines of the inaugural International Centre for Education in Islamic Finance (INCEIF). INCEIF president Datuk Azmi Omar said that there are a lot of waqf land that can be used to develop affordable housing. The cost to develop the houses can be lower, however, the houses will be under a long-term lease. On another matter, Amiruddin said that the digital banking framework is set to push the country forward in the digital banking landscape.

A new trend is emerging among consumers, one that emphasises the importance of ethical consumption. Over the past 20 years, Muslim consumers have been searching for brands and products that speak to their religious identity. According to the seventh edition of the State of the Global Islamic Economy report published last week, Muslims spent $2.2 trillion last year on food, pharmaceuticals and lifestyle products and services. This is set to rise to $3.2 trillion by 2024. With the majority of Muslims under the age of 30 and many living in countries with large consumer markets, such as Indonesia, Malaysia and the UAE, there is immense potential for the global community. Halal brands are now finding their way into a wider consumer beauty movement seeking cruelty-free, animal-free products.

The United Arab Emirates (UAE) consists of "onshore" and financial free zone jurisdictions, to which different sources of payments law apply. There are currently two financial free zones in the UAE: the Dubai International Financial Centre (the DIFC) and the Abu Dhabi Global Market (the ADGM). Payment services can be provided by non-banks. The 2017 Payment Regulations limits the scope of non-bank payment services, imposing ownership restrictions in many cases. Payment by way of cash remains the most prevalent method of payment in the UAE. However, an increasing number of UAE residents are opting to pay by way of debit and credit cards. Online payments are increasingly common and various other digital initiatives are increasingly utilized. Such initiatives include the government's Mobile Wallet, Etisalat Wallet, NOL Cards, Apple Pay, Samsung Pay and Alipay. Dubai introduced plans to launch its own wallet emCash which can be used as a digital currency and cryptocurrency as well.