Turkey and World Bank Group Reinforce Cooperation on Improving Islamic Finance and the Country’s Investment Climate

The world bank will open its first center on Islamic Finance

ISTANBUL — World Bank Group President Jim Yong Kim today opened the Global Center for Islamic Finance, together with Turkish Deputy Prime Minister Ali Babacan, as part of a two-day visit to Turkey that focused on enhancing the partnership between the Bank Group and Turkey – the second largest World Bank Group client and a growing key regional player.

The Global Center is envisaged as a knowledge hub for developing Islamic finance globally, conducting research and training, and providing technical assistance and advisory services to World Bank Group client countries interested in developing Islamic financial institutions and markets.

On the occasion of the opening, Kim stated that the Center is a symbol of the Bank Group’s shared objectives of developing Islamic finance and maximizing its contribution to poverty alleviation and shared prosperity in client countries.

“It is my hope that this Center will become the cornerstone for these efforts, serving as a knowledge hub,” emphasized World Bank Group President Jim Yong Kim, “with Turkey taking a leading role in designing and delivering cutting-edge technical assistance, advisory services, as well as generating and disseminating practical knowledge on how to make Islamic finance more relevant for growth and development.”

Earlier in his trip, Kim attended the 5th Izmir Economic Congress, a national economic forum that helps shape the economic policy agenda of the country for the coming years. In his opening remarks, Kim underlined the twin goals of the World Bank Group to end extreme poverty by 2030 and boost shared prosperity for the bottom 40 percent in developing countries.

“Turkey’s economic achievements are an inspiration for many other developing countries,”said Kim.  He added “We look forward to continuing our productive partnership with Turkey to help sustain your impressive achievements, to overcome your remaining challenges, and to share your remarkable experience with countries around the globe.”

Subsequently, Kim took part in a moderated panel discussion on current global economic developments with Deputy Prime Minister Ali Babacan.

In earlier meetings with Turkish President Abdullah Gül, Kim informed the Turkish leader of the new World Bank Group Strategy, how the Bank can share its global experience and knowledge, and the scope for increasing the Bank Group’s financial capacity and, hence, its relevance in middle-income countries. The two leaders also exchanged views on Turkey’s growing regional and global role.

Kim met with Turkish Prime Minister Recep Tayyip Erdoğan. Their discussion covered a range of issues, including Turkey’s broader development agenda, developments in the neighboring region, and how to evolve the Bank’s longstanding partnership with Turkey to cover cooperation and knowledge sharing in other countries. “Turkey has the history, capacity, and accumulated knowledge from experience to play a large and responsible role as a development partner and emerging donor,” stressed Kim.

Prior to concluding his visit to Turkey, President Kim will attend the 8th Investment Advisory Council (IAC) of Turkey at the invitation of Prime Minister Erdoğan.  The IAC is an annual gathering of top national and international private sector representatives to share their views on Turkey's competitive position in the world economy and advise on how to improve the flow of foreign investment. The IAC gathering came two days after the release of the 2014 Doing Business rankings, which saw Turkey marginally improve its position to 69th place among 189 countries.

Turkey joined the World Bank in 1947. Today, the Bank’s portfolio is concentrated and strategically focused, with 11 investment projects and US$4.6 billion net commitments. Over the last decade, the Bank has worked with Turkey on maintaining prudent macroeconomic policies, restructuring the country’s banking system, making public administration more efficient, restructuring the health sector, reforming the energy sector, and supporting disaster risk management.  The International Finance Corporation’s (IFC) strategy in Turkey is to support private sector development. Currently, the outstanding portfolio for IFC’s own account is US$2.4 billion. Fiscal year 2013 was a record year for the IFC in Turkey with US$985 million of investments in 20 projects. Turkey is MIGA’s 8th largest country by gross exposure, representing about 4.2 percent of MIGA’s gross portfolio. MIGA’s portfolio consists of 6 projects with a gross exposure of US$454 million.

About the World Bank Group

The World Bank Group is comprised of five institutions: the World Bank, which is made up of the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services to middle-income countries; the International Development Association (IDA), which provides interest-free loans and grants to the poorest countries; the International Finance Corporation (IFC), which makes equity investments, and provides loans, guarantees, and advisory services to private-sector business in developing countries; the Bank Group’s political risk insurance agency, the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID), which provides international facilities for conciliation and arbitration of investment disputes.

Source: World Bank

Islamic Microfinance Model to help alleviate poverty

(ISLAMABAD) Speakers at a seminar here called for following interest free Islamic microfinance model in order to eliminate poverty from the country.  The seminar was organized on Monday by Al-Huda Centre of Islamic Banking & Economics (CIBE) and AKHUWAT. 

The aim of the seminar was to choke out the plan of poverty  alleviation on national and international scale to lessen poverty, social welfare and to tackle other problems pertaining to it. 

Delegates from Malaysia, Yemen, Kazakhstan, Indonesia, Mauritius and other countries participated in the event who spoke on various topics of Islamic microfinance i.e. methodology of poverty reduction, Zakat, Shariah implications, Dard-e-Hasna, Waqf models, latest trends of Islamic microfinance, technological application of poverty alleviation and usage of Islamic microfinance in non muslim societies. 

Speakers said poverty has risen as one of the most crucial problems of the decade hitching fastest development of the countries on national and international level.  
Islam is the only religion that takes the responsibility of poverty alleviation as one of its main obligations. Zakat, Ushar, Waqaf, Fitrana, Qard-e-Hasna, Murabaha, Ijarah, Musharaka etc have the qualities to sustain society from the plague of poverty. 

“This was the major reason of worldwide recognition of Islamic microfinance as a sustainable source of lessening poverty from the society.
It is a pleasurable factor that more than 2 million beneficiaries are taking the edge of Islamic microfinance worldwide”, speakers added. 

Speakers said that internationally, microfinance was considered a  viable prospective to alleviate poverty but its sustainability was related to high interest rates. “Islamic Microfinance Model like Akhuwat interest-free micro-lending is not less than a miracle as it has proven all the existing viewpoints regarding microfinance wrong by providing interest free funding to the poor”, Athar Axeem Khan, an economist said. 
Dr. Amjad Saqib, Executive Director Akhuwat said that so far the organization has provided funding in the shape of Qarz-e-Hasna  worth of Rs. 1.1 billion to 94,000 families. He said that the recovery percentage remained 99.85 per cent.

A New Venture Established to Strengthen Islamic Finance in France and USA

(Dubai - UAE) A Memorandum of Understanding (MOU) has been signed between Al Huda Center of Islamic Banking and Economics (CIBE) and Franco-American Alliance for Islamic Finance (FAAIF) to cooperate in the development of Islamic banking and finance in France and the United States. Both parties agreed to work together, leveraging their different areas of regional and professional expertise of Islamic finance and synergizing their skills for the broader goal of promoting and developing Islamic finance worldwide, especially in the Franco – American region. 

MOU Signing Ceremony held in Dubai, United Arab Emirates today, in which Muhammad Zubair Mughal, Chief Executive Officer of Al Huda CIBE and Camille Paldi, Chief Executive Officer of FAAIF signed the agreement. During the media briefing, Camille Paldi mentioned that she is excited to bring Islamic financial services, training, and expertise to her home country the United States after having spent many years’ education & training abroad in Islamic finance, law, and Shari'ah. With her strong knowledge of Islamic banking, finance, Shari'ah, and law, Paldi hopes to impact the financial services sector in the USA, helping to boost the economy and steer the nation in a new direction. Paldi is excited to utilize her international network to help achieve this purpose, starting with this MOU with AlHuda CIBE. 

While discussing the importance of this MOU, CEO of AlHuda CIBE, Zubair Mughal said that this is the right time to introduce Islamic financial solutions to the Western world so that they may explore the option of solving financial dilemmas and crises with Islamic financial instruments, derived from the Holy Book. Zubair said that AlHuda CIBE will extend their scope of services in European and American markets through the help of FAAIF. He also mentioned that AlHuda's services in these regions would include Islamic finance product Development services, sukuk structuring, Takaful development, and Shari'ah advisory. He also mentioned that Alhuda CIBE already has a very strong professional network in Central Asia, the Middle East, and African regions, but through this MOU, Moghul plans to extend their scope in the American markets as well. 

AlHuda CIBE is a well-established brand in the international Islamic finance and banking industry focusing on Advisory, Consulting, Capacity, and Shariah Advisory services, while FAAIF is an emerging Alliance of Franco – American financial experts, which is headed by renowned legal and Islamic financial expert Camille Paldi.

Tunisia has big potential for Islamic Finance: Zubair Mughal

Tunisia would be the global hub of Islamic Finance for French speaking countries

There are big opportunities to promote Islamic finance in Tunisia which can be the global hub of Islamic Finance for French speaking countries, said by Muhammad Zubair Mughal, Chief Executive Officer - AlHuda Centre of Islamic Banking and Economics (CIBE) in an international conference on “Finance and Enterprise” jointly organized by World Bank, International Monetary Fund (IMF), International Finance Corporation (IFC) and European Bank for Reconstruction and Development in Sousse – Tunisia, which was attended by the Prime Minister of Tunisia including many government ministers, heads and senior delegates from Central Banks, World Bank, IMF, IFC, European Bank and other dignitaries from different international organizations. Muhammad Zubair Mughal, being the guest of honor, during his address stated that international financial crisis can be addressed in a better way through Islamic Finance and such financial crisis could have not been happened if Islamic financial system was followed and implemented at that time, he said there are about 2000 Islamic Financial Institutions working globally as Islamic Banks, Takaful ( Islamic Insurance), Sukuk ( Islamic Bonds), Islamic Fund and Islamic Microfinance institutions etc in more than 100 countries and fortunately no Islamic Financial institution was effected by such global financial crisis which ensures the strength and rationality behind the Islamic financial system. He also added that international institutions such as Islamic Development Bank (IDB), Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI), Islamic Financial Services Board (IFSB) and International Islamic Liquidity Management (IILM) are dedicatedly working for Islamic finance around the globe which will further promote and strengthen the Islamic finance in future globally. He, responding to a question related to the relationship between religion and Islamic finance in question answer session, said that Islamic banking and finance is a name of a system not religion so all other religions can get benefit from it and that is why Islamic banking and finance is growing in the western world while non Muslims are utilizing the Islamic financial products, considerably, to fulfill their business, personal and financial needs as in only America which has more than 20 Islamic financial institutions are working, which are actively providing the Islamic financial services to fulfill the financial needs of Muslims and non-Muslims equally. During his stay in Tunisia, he met with Dr. Amel Amri, President – Tunisian Association for Islamic Finance (TAIF), Dr. Raza, President – Islamic Economic Association Tunisia and heads of some other Islamic financial institutions. He said that Tunisia has a good recognition in Islamic financial industry having 2 full-fledged Islamic banks, Takaful companies, universities with having Islamic finance program, Sukuk Laws and some other similar institutions which are indicating the best future of Islamic finance in Tunisia but he, realizing the need of Islamic microfinance, said that Islamic microfinance is missing component of Islamic finance in Tunisia while socioeconomic development and poverty reduction can be done in better way through Islamic microfinance in Tunisia.

Islamic Microfinance should be Introduced Internationally: Dr. Fatima Al-Blooshi

Three days’ 3rd Global Islamic Microfinance Forum ended in Dubai with a declaration to put joint efforts for the poverty alleviation (Dubai) Islamic Microfinance is an effective tool for the poverty alleviation and it should be introduced around the globe to state an effective policy for ultimate poverty alleviation from the world, these views were stated by Dr. Fatima Mohamed Yousif Al-Balooshi, Minister (Ministry of Social Development – Bahrain) as a Chief Guest in the 3rd Global Islamic Microfinance Forum (GIMF) held on 6th to 8th October, 2013 at Dusit Thani Hotel, Dubai in which delegates from more than 30 countries participated actively and this Forum was organized and conducted by AlHuda Centre of Islamic Banking and Economics (CIBE). She also added that Islamic Microfinance should be presided and supported by the Government in different countries of the world to promote the Islamic Microfinance Institutions. She also admired the endeavors of AlHuda CIBE at the inauguration of 3rd Global Islamic Microfinance Forum on 6th Oct, 2013 and also proposed to conduct the 4th Global Islamic Microfinance Forum in Bahrain. Muhammad Zubair Mughal (CEO – AlHuda CIBE), addressing to the Forum, said that Poverty is increasing in the Muslim countries rapidly and consequently the half of the world poverty has, approximately, been confined to the Muslim countries in the current age. The involvement of interest in micro financing is one of the major causes behind this phenomenon and that is why Muslims hesitate to avail microfinance facility. If Islamic Microfinance is not introduced resolving this issue, the world’s poverty will increase extraordinarily. He said that the forum aimed at gathering all the Islamic Microfinance Institutions at single platform, to streamline the policies for poverty reduction, to promote the Research and Education in Islamic Microfinance industry and to enhance its outreach on global canvas. He said that current facts to the failure of microfinance system require an alternative and prudent Islamic Microfinance system to the world to enhance the financial inclusion globally and ultimate global economic prosperity. Addressing to the forum Mr. Mr. Hamdan Mohamed Al Murshidi (President & Chairman of the Board, Arab Business Club, United Arab Emirates) said that there is no other argument to address poverty through Islamic Microfinance as it is the ultimate solution to this problem and also he committed with his reward less services to promote Islamic Microfinance globally. While Mr. Amjad Saqib (Executive Director – Akhuwat) said that Islamic Microfinance is a Hope for the Poor which they (poor) are looking forward to resolve their Social and Economic problems, so Islamic Microfinance should be promoted globally. He, by presenting Akhuwat as a case study, figured out that there are about 380000 families benefitting through Qarz e Hasana from Akhuwat. Meanwhile its portfolio has crossed PKR. 5 billion with an increasing trend day by day. The forum was attended by Researchers, Scholars and Islamic Microfinance practitioners including: Justice (R) Khalil Ur Rehman (Shariah Advisor – AlBaraka Islamic Bank, Chairmen – Punjab Halal Development Agency – Govt. of Pakistan), Mufti Aziz Ur Rehman (Manager-Shariah, Mawarid Finance – Dubai), Dr. Ajaz Ahmed Khan (Microfinance Advisor, CARE International UK), Mr. Atef Ebrahim (Chief Executive Officer, Family Bank - Bahrain), Mr. Zeinoul Abedien Cajee (Founding CEO/ Management Board, National Awqaf Foundation of South Africa), Mr. Mamode Raffick Nabee Mohomed (Founder/ Secretary, Al Barakah Multi-purpose Co-operative Society Limited – Mauritius), Ms. Rehab Lootah (Managing Director - Mawarid Consultancy Dubai - U.A.E), Mr. Mohamed El Mehdi Zidani (Author - An Islamic Analysis of the Grameen Bank and Director Baraka Editions – France), Mr. Pervez Nasim (Chairmen & CEO, Ansar Financial and Development Corporation – Canada), Mr. Abdul Samad (Shariah Advisor, The Bank of Khyber – Pakistan), Mr. Humayun Saeed Jamshed (Senior Director - Islamic Banking & Finance, SAB – France), Mrs. Thamina Anwar (Founder and CEO, Awqaf New Zealand Mrs. Helena Lutege (Founder and Managing Director, BELITA Fund – Tanzania), Mr. Ali Tariq (Executive Director, Iraqi Microfinance Network – Iraq), Dr. Mohammed Kroessin (Global Microfinance Advisor – UK), Mufti Barkatulla (Sharia Advisor, Islamic Bank of Britain, London, UK) and some other prestigious international speakers addressed in this forum.

Islamic REIT is Mandatory for the Development of Real Estate Industry - Muhammad Zubair Mughal

Micro Housing Finance demand can be satisfied through Islamic REIT

(Kuala Lumpur) Islamic REIT (Real Estate Investment Trust) is a beautiful addition to the Islamic Finance Industry with which the Real Estate Industry can be promoted internationally. Mr. Muhammad Zubair Mughal, CEO of AlHuda Centre of Islamic Banking and Economics (CIBE), expressed these views during his speech on the topic of “Islamic REITs” in the Two Days Conference “REITs UNLOCKED” (18th Sep, 2013) held in the Capital of Malaysia (Kuala Lumpur). He told that first Islamic REIT was launched in 1960 in America and now REIT is actively providing the funds to Real Estate Industry in more than 30 countries of the world including Malaysia, Pakistan, Japan, Korea, Canada, UK and Australia for the smooth growth and development of Real Estate Industry while the global volume of Real Estate Industry has reached at US $ 850 billion and also it is worth mentioning that 72% of total global investment in Real Estate is still in America but the amazing fact is the least share of Islamic REIT in the global REIT Industry. First Islamic REIT was initiated by Malaysia in June, 2006 and growing rapidly from last 7 years in its age of infancy. 

He added that Islamic Bonds (Sukuk) were used in the Middle East for the development of Real Estate, although this approach was partially successful but not everlasting because Sukuk has some challenges of current upheavals in the property market of Middle East, although the Real Estate market of Middle East can be managed and settled with the induction and execution of Islamic REITs. Inter alia Islamic Banking and Finance market shall have more financial instruments to ensure the Shariah adherence of their investment portfolio through Islamic REITs, which can potentially be used to manage the liquidity of Islamic Financial Institutions. 

He also told that Islamic REITs can be productively used in underdeveloped countries by addressing the demand of Housing Finance and Real Estate as well to satisfy the ultimate demand of micro housing. The Islamic REIT will not only provide the Shariah compliant products to the corporate industry rather it will turn the dream of more than 100 million homeless people into reality around the globe for getting their homes/houses. He mentioned that Securities and Exchange Commission of Pakistan (SECP) has designed two structures to streamline and grow the REIT Industry and it is expected that, in coming days, the Real Estate Industry will grow through REITs in Pakistan.

"A Big Question Mark on Islamic Finance Industry" by Muhammad Zubair Mughal

Apparently, it is a matter of pleasure that global volume of Islamic Finance Industry has crossed $ 1.3 Trillion approximately, which is, definitely, providing the best and compatible sources of finance with interest free modes. According to a careful estimate, there are more than 2000 Islamic Financial Institutions are offering Islamic Banking, Islamic Insurance (Takaful), Islamic Funds, Mudaraba, Islamic Bonds (Sukuk), Islamic Microfinance and some other institutions actively providing Islamic financial services on different modes in adherence of Shari’ah principles of Islamic Finance. If we look into the market share of above mentioned institutions, we get shocked and depressed for a while with the fact that Islamic Banking and Finance has been nearly confined to the rich people and as per the ideology of capitalism, the profit urge has captured the Islamic Financial Industry and discriminated the underprivileged people and letting them deprived from Islamic financial services. Keeping in view these facts, it should be said as the commercialism has captured Islamic Finance institutions in such a way that business with and financing to the poor has gone astray from their agenda. 

According to the facts and figures (March-2013) by Consultative Group to Assist the Poor (CGAP), (an associated institution to the World Bank), the global volume of Islamic Microfinance has reached at USD 800 million with serving about 1.3 million beneficiaries. While as per the latest research (July-2013) conducted by AlHuda Centre of Excellence in Islamic Microfinance, the global volume of Islamic Microfinance has reached at $ 1 billion. Total number of Islamic Microfinance Institutions is more than 300, operating around the globe while the share of Islamic Microfinance is less than 1% from the overall volume of $ 1.3 trillion of Islamic Finance Industry, which, itself, is a big question mark on Islamic finance industry and proving its misfortune. These stated facts and figures give rise to different question such as: is social segmentation between poor and rich 1% : 99% ? Does Islamic Finance have financial resources only for the rich people? Not for the Poor? Is Islamic Finance an option only for the particular segment of society? Is it justice system of Islam? etc, whereas the answers to all these questions are in negative and awful, definitely. 

As per the analysis of Islamic Finance in the light of Islamic teachings, we get into, the Islamic ideology of finance which aims at justice, cooperation, welfare of the poor and financially deprived people of society with its best principles. Islam is a name of revolution starting from poor and will ending at same. If we have a look at comparative study of different religions regarding the view point of poverty, then we come to know that poverty alleviation is not only the social responsibility in Islam rather a religious obligation as well. Zakat, Charity, Sadqa, Fitr, Usher and Qarz-e-Hasan etc are amongst the key religious responsibilities of Muslims, whereas it is a social responsibility in other religions rather than a religious one which recognized as branded name of “Corporate Social Responsibility” (CSR), and they doing good work for poverty alleviation and social development in the whole world, but unfortunately, Islamic Financial Industry have ignored its social or religious responsibilities. 

If we look at the world poverty, we get surprising facts and figures. The 46% of whole world poverty exists in Muslim World while Muslim population in the world is 26%. United Nations have marked 26 out of 57 member countries of OIC, as the least developed countries. Current statistical information is highlighting that the poverty in the Muslim World is increasing day by day which is, as per the serious observation, caused by none or least response of poor people to Microfinance facilities because of interest, none or limited Islamic Micro Financing facilities provided by Islamic Financial Institutions and the least attention and interest of International Donor Agencies (UNDP, World Bank, IFC) towards Islamic Microfinance which, in return, is throwing the Muslim world into an era of poverty. 

As per the praiseworthy analysis of economics experts of modern age (Mr. Tariq Ullah and Mr. Ubaid Ullah 2008), 650 million Muslims in the world are living below poverty line with less than $ 2/ per day income. While on the other hand, only the 1.3 million Muslims out of 650 million were tried to get them out of poverty through Islamic Microfinance services whereas remaining 649 million Muslim, living in poverty, are still looking forward any financial assistance through Islamic way. Islamic Finance Industry is facing lot of criticism in different aspects e.g. acceptability of Islamic Finance, objections from Shari’ah Scholars, Conflicts in Shari’ah related issues etc are the main challenges to Islamic Finance Industry. But objection to neglect the poor is very critical, once not resolved, can damage and bring a perpetual loss to the Islamic Banking and Finance Industry. 

The optimal results for the economic prosperity of Islamic Finance can be ensured if Islamic Microfinance Institutions established by the Islamic Finance Industry. Although Islamic Microfinance can be energized by utilizing available charity amount of Islamic Banking and Finance industry which is worth in Million Dollars. Inter alia Zakat, Sadqaat, Waqf, other Islamic Microfinance products e.g Murabaha, Musharaka, Salam and Istisna etc can be used prolifically for poverty reduction and social development. 

Our Shari’ah scholars are also responsible for insisting and pursuing the Islamic Financial Institutions to execute and promote Islamic Microfinance otherwise there is a definite chance of rumors that Islamic Banking and Finance services are only for rich people making discrimination of “Do Have and Have Not” and ensuring its ultimate benefits only to rich people. 

( Muhammad Zubair Mughal as a Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics (CIBE) has been working consistently for last nine (9) years for poverty alleviation through Islamic Microfinance concept; he can be reached at zubair.mughal@alhudacibe.com )

Indonesia’s BMT Microfinance system should be introduced Globally: Zubair Mughal

In Indonesia 5,500 BMT’s are struggling under Islamic Microfinance to eliminate poverty.

(Lahore) Baittul Maal wa Tamwil (BMT) Microfinance system which is being working in Indonesia should be introduced all-around the globe as a best system to eliminate poverty which will boost-up Islamic Microfinance industry worldwide, These thoughts were expressed by Chief Executive Officer of Al-Huda Center of Islamic Banking and Economics Mr. Muhammad Zubair Mughal in his address in an International conference for “ Empowering SMEs for Financial Inclusion and Growth” held at Jakarta – Indonesia, which was organized by a well known financial institution “Sampoerna Group” of Indonesia in which large number of professionals related to Microfinance, SME, Banking and other Financial institutions participated.

During his address Mr. Muhammad Zubair Mughal Said that, Islamic financial industry of Indonesia with having 11 complete Islamic Banks, 24 Islamic windows, 43 Takaful Institutions, 16 Islamic Finance companies and more than 5,500 BMT’s holds a remarkable position in the world. He said, BMT’s in Indonesia has played an important role for the alleviation of poverty from country by adapting methods of Islamic Microfinance system, which is a clear example of success of this system But unfortunately, BMT’s methods are being limited to Indonesia only, but it is the need of the time that this system should be introduced in other countries of world along with Indonesia which will help in introducing Islamic Microfinance system in other countries of world and new Islamic Microfinance methods of BMT will be available along with Murabaha, Salam, Mudarabah, Qarz-e-Hasna and Waqf to Islamic Microfinance Institutes. 

He further added that, to involve poor in financial inclusion Islamic Microfinance is very important along with branchless banking, Product innovation and financial literacy etc Because in Muslim communities major reason of poverty is to avoid interest based Microfinance and in order to bring Muslims in financial inclusion then such a Islamic Microfinance system need to be introduced which will be according to the Muslims religious and economic principles otherwise poverty will increase due to financial excluding of Muslims, which can be estimated from present facts and figures that half of world’s poverty lies in Muslim countries. 

He further added, to gather Islamic Microfinance institutions and professional of the world on single plate form, the Global Islamic Microfinance Forum is going to be held on October 16, 2013 in Dubai, to compile the strategy to strengthen Islamic Microfinance industry.

Growth of Malaysia's insurance, takaful sectors seen stable

KUALA LUMPUR: The growth of the insurance and takaful sectors for 2014 will remain stable amid domestic demand, said industry experts.

Takaful Malaysia group managing director Datuk Mohamed Hassan Kamil said strong growth prospects and improved risk management would lead to increased demand for insurance and takaful amongst the public at large.

He said the industry is anticipated to remain encouraging for both conventional and takaful operators through the introduction of new or enhanced and innovative products by insurance takaful companies.

“There is plenty of room for organic growth, given the fact that Malaysia still has low insurance penetration in both the conventional and takaful sectors.       

“In addition, we project a muted earnings growth outlook in certain areas of the local insurance and takaful industry arena that is likely to be impacted by investment de-risking and financial market volatility,” he told Bernama.

Regarding market players, he said the local insurance and takaful players are expected to utilise multiple distribution options available and develop alternative channels whilst strengthening their agency force to establish a solid foothold in the industry.

He said this will be supported by the implementation of strategic marketing and operating systems on top of competitive and cutting-edge products and services offered by respective industry players.

Hassan Kamil said despite the positive outlook, the industry will face diverse changes that were expected from the enforcement of the Risk-Based Capital (RBC)framework in 2014.       

“The RBC implementation might change the landscape of the takaful industry and the expected contribution growth is deemed to accelerate modestly, with fairly robust growth amongst takaful operators outpacing the conventional players,” he said.

Apart from that, both industries have been experiencing an influx of mergers and acquisitions (M&As) resulting in more foreign insurers tapping into the Malaysian insurance market, he said.

Amongst M&As this year were Khazanah Nasional Bhd’s partnership with Canadian-based Sun Life Financial Inc to acquire 98% of CIMB Aviva Assurance Bhd for RM1.8bil, and American International Assurance Bhd’s acquisition of ING’s insurance and takaful business in June 2013.

The industry has seen new players from Canada and the US coming into the Malaysian market, taking over the smaller local players.

“We have witnessed the emergence of financial solid players in the local insurance industry arena as a result of the M&A exercises.       

“The insurance and takaful industry in Malaysia remains encouraging for both life and general insurance and takaful despite moderating economic growth following the slowdown in major advanced countries,” Hassan Kamil said.

The persistent talent shortage, of professionals well versed in both principles, would be one of the main areas that need to be looked at critically in order to remain competitive in the industry, he said.

In addition, he said the rapid development of insurance and takaful industry has made it all the more difficult to recruit the right human capital needed for the various job functions. — Bernama

Source: www.thestar.com.my

ASEAN Countries have big potential for Islamic Finance: Zubair Mughal

(Manila - Philippines) There are multiple opportunities in Association of Southeast Asian Nations (ASEAN) countries to promote Islamic Finance, through which Halal Industry can be flourished rapidly in the region. These views were expressed by Muhammad Zubair Mughal, Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics (CIBE) during his speech at “First National Halal Forum” in Manila which was organized by Department of Science and Technology, Government of Philippines at a local hotel (Shangri-La Makati) on 29th- 30th October, 2013, in order to grow Halal Industry and Economy on both regional and international level.

During his address to the Forum, he stated that Islamic Finance and Halal Industry are complement to each other. Micro and Small Medium Enterprises (MSME’s) can be energized by utilizing Islamic Finance concept in the region which will be cause to reduce in poverty and ultimate socio-economic prosperity in the ASEAN member Countries. He, presenting an analysis on ASEAN countries (Malaysia, Indonesia, Brunei Darussalam, Loa PDR, Myanmar, Singapore, Thailand and Vietnam), stated that the approximate total population of ASEAN countries is 600 million including the Muslim Population more than 40% (240 million) which is a potential indicator for Islamic Finance growth whereas in Malaysia, Indonesia and Brunei Darussalam already have significant contributions in Islamic Banking, Takaful, Sukuk and Islamic Funds, while Philippines and Thailand are being considered as future potential markets for Islamic Banking and Finance in ASEAN countries.

He explained that Islamic Banking and Finance is the system not a religion which can be utilized by Muslim and Non-Muslims to get absolute benefits from the best services of Islamic Banking and Finance as its best example is the South Africa where Muslim population is less than 2% of the whole population but it has more than 5 Islamic Banks, 13 Islamic Funds and 2 Takaful companies working actively, which are equally famous among Muslims even non-Muslims communities because of their best practices and services. He said that Philippines is an important country of the region with having 100 million populations, approximately, containing Muslim population by more than 7% which bears it out that there are momentous chances for the promotion of Islamic Finance and, apparently, government of Philippines found active in this concern and it will, definitely, energize Islamic Banking and Takaful in result. He also stated that government of Philippines can generate financial resources for national level mega projects by utilizing the concept of Sukuk (Islamic Bonds).

National Halal Forum continued for two days at Manila where experts from different countries of the world participated including Pakistan, Turkey, Malaysia, Indonesia and Thailand #

Inauguration of 100 days Master plan for the Development of Islamic Microfinance industry

Under the umbrella of Islamic microfinance Network (IMFN), a special meeting of Islamic microfinance institutions was held at the capital city of Pakistan, Islamabad, today, presided by Dr. Amjad Saqib,  Executive Director Akhuwat and Chairperson IMFN, in which large number of local and International Islamic microfinance institutions took part. The rationale of this special meeting was to endorse 100 days master plan for the develop,ent of national and international microfinance institutions while uniting the Islamic microfinance institutions at signle platform, resolving the interrelated issues and the barriers.

Chief Executive Officer of Alhuda CIBE & Islamic Finance Network, Mr. Muhammad Zubair Mughal, while expressing the need and characteristics of 100 days plan, said, in analysis of the growing expansion of Islamic microfinance in the world, there is an alarming need to give Islamic microfinance industry a obvious strategy and track so that Islamic microfinance institutions may carry out the mission of poverty diminution in a brand line of action. He stated that Islamic microfinance has become an imperative need to alleviate poverty. In this perspective, Islamic Microfinance Network has designed 100 days master plan. For the advancement of Islamic Microfinance, this plan incorporates the linkages with international microfinance networks, platform for exchange of ideas and dialogues with donors about Islamic microfinance, Shariah guidance to Islamic microfinance industry, Islamic Micro Finance awareness campaign through media and it also includes structuring of standards on Islamic Micro finance.

He further said that if International multi literal organization i.e. World Bank, UNDP, USAID, IFC, GIZ etc. seriously want to eradicate poverty from the world, then they will have to include Islamic microfinance in their preference strategy. Based on current situation, the achievement of Millennium Development Goal ( MGD’s) for poverty alleviation of the United Nations seems impossible and one of the main reasons for this is not including Islamic microfinance in their poverty alleviation strategies. It is estimated that approximately half of world’s poverty reside in Muslim countries and Muslims avoid using conventional microfinance facilities due to interest, which is strictly prohibited in Islam. Hence, there is a need to introduce such microfinance services in Muslim countries which are compatible with their religious, cultural and social values. If this is not done, the world poverty will keep on increase and this can be easily proven by assessing the poverty statistics of last 10 years.

It was also decided during the meeting that AlHuda CIBE will develop guiding principle on Salam, Murabaha and Mudarabah for Islamic Microfinance Network, which will be a source of guidance for institutions related with Islamic microfinance. 100 days master plan will be initiated on 30^th May, 2013 and on its completion a general meeting will be organized to evaluate the achievement of Master plan related targets#

Islamic Microfinance Research Study initiated in Yemen: Zubair Mughal

AlHuda Center of Islamic banking and economics (CIBE) Initiated a Islamic Microfinance research study for Yemen Microfinance Network (YMN) in Yemen. This study will be conducted in the Yemen’s capital Sana’a including Taiz, Adan and Almoukla, so that the Islamic Microfinance products can be examined broadly and further Islamic Microfinance products can be developed for Yemen Microfinance sector with the compatibility of existing structure. Consequently, maximum people utilize the Microfinance facility and the alleviation of poverty would be assured.

Najah Al-Mugahed Managing Director of Yemen Microfinance Network explained the association memorandum of research study that Microfinance market size in Yemen is more than one million but only 80,000 (eighty thousand) people are barely facilitating with the services and products of Microfinance which is approximately 8% of the total Microfinance market size.  Its major reasons are; Non-existence of complete Islamic Microfinance range of products, Domination of Murabaha in Islamic Microfinance sector, increasing rate of Murabaha and percentage of interest in Microfinance are the obstacles in the expansion of Microfinance industry. An appropriate implementation plan would be prepared through this research study to strengthen the Yemen’s Microfinance sector.

Zubair Mughal - Chief Executive Officer AlHuda Center of Islamic Banking and Economics with Mohammad Al-Lai CEO Al-Amal Microfinance Bank - Yemen

Muhammad Saleh Al-Lai Chairman of Yemen Microfinance Network and Executive Director of Alamal Microfinance Bank proclaimed that Yemen’s Islamic Microfinance market is very promising and we want to make it stronger through this study so that Yemen could get a distinguished level through Islamic Microfinance. He further mentioned that this is our privileged that Al-amal Microfinance Bank won the award of Islamic Microfinance Challenge 2010 which was organized by Islamic Development Bank and CGAP (World Bank) which shows a clear understanding of our strong structure of Islamic Microfinance.

Muhammad Zubair Mughal Chief Executive Officer of Alhuda Center Islamic Banking and Economics (CIBE) said that our selection for the research study is a great honor for AlHuda CIBE. He mentioned that they have developed a strong research methodology for this study and used different research instruments e.g surveys, focus group discussion (FGDs), stake holder’s interviews, desk review of MFI’s and meetings with prestigious professionals of Microfinance industry to get primary & secondary information etc which will help to design the ideal products for Yemen Islamic Microfinance sector.

He further mentioned that the share of Islamic Microfinance in Yemen’s Microfinance sector is approximately 90% and remaining 10% are also converting their portfolio into Islamic Microfinance, Yemen Microfinance Industry will be further strengthened with the development of new Islamic Microfinance products, It will increase the outreach of Microfinance sector and help out to eradicate poverty_#

Islamic Microfinance Market size touches $1 billion: Zubair Mughal

(Abu Dhabi)Islamic Microfinance is rapidly gaining acceptance in Muslim and Non- Muslim countries due to its remarkable performance in poverty eradication; because of which, this industry is making quick progress. According to our careful estimate Islamic Microfinance market’s worth has reached $1 billion. These views were expressed by Muhammad Zubair Mughal, the Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics (CIBE) ,while, addressing the International Islamic Finance conference as a Guest of Honor. This conference was organized in Abu Dhabi-the capital of United Arab Emirates, in which the experts and researchers of Islamic Microfinance industry participated from all over the world. The event was organized on 14^th- 16^th April, 2013 in Park Hyatt Hotel- Abu Dhabi by the international research and publication organization- Emerald in association with Abu Dhabi University. 

Muhammad Zubair Mughal said that currently more than 300 Islamic Microfinance institutions are offering their services to 1.6 million clients in almost 32 countries. Due to Islamic microfinance’s significant role in reducing poverty, international donor institutions and multilateral organizations like USAID, IDB, ADB, IFAD, UNDP, World Bank and IFC etc have clearly explained their policies in different countries to further strengthen Islamic microfinance, which will ensure the quick advancement of Islamic microfinance in near future. He added that if we take an overview of last 10 years of Islamic finance industry, it can be observed that with the passage of time Islamic banking, Sukkuk, Takaful and Islamic fund etc have progressed quickly. While, in next 3 years Islamic microfinance will progress more quickly relative to other Islamic financial products.

He informed that to further strengthen Islamic microfinance, AlHuda CIBE has established an international division named “Centre of Excellence in Islamic Microfinance (CEIMF). Its major objective is to provide the Advisory & Consultancy to Microfinance Institutions so that conventional microfinance institutions can be transformed into Islamic microfinance institution and along with this new Islamic Microfinance Institutes can be established. In this regard, Centre of Excellence in Islamic Microfinance is offering its services in Azerbaijan, Yemen, Afghanistan, Pakistan, Mauritius, Indonesia, Kazakhstan and other countries. He stated that there is immense need of research in Islamic microfinance industry so that new Islamic microfinance products can be introduced. As at present, only Murabaha has 80% share of total Islamic microfinance market. He mentioned that the popularity of Islamic microfinance is evident from this point that many international universities have requested AlHuda CEIMF to assist them in incorporating Islamic microfinance as a subject in their business & finance syllabus.

Muhammad Zubair Mughal said that almost half of the world’s poverty is prevalent in Muslim countries. One of the reasons of high poverty rate in Muslim countries is the refusal of Muslims to take interest based loans. Islamic Microfinance is an essential tool to eradicate poverty from Muslim world otherwise the attainment of the United Nation’s Millennium Development Goals is impossible#

Al-Huda CIBE commenced its operation in Uganda for the development of Islamic Banking in East Africa

AlHuda Centre for Islamic Banking and Economics (CIBE) has initiated its operation with the brand name of “AlHuda CIBE Uganda” in East African country, Uganda. Together with Uganda, other countries of East Africa e.g. Sudan, Kenya and Tanzania etc can also be catered, where a huge Muslim population and the demand of Islamic banking already exists. Hence, Islamic Banking and Finance can flourish in those countries promptly. It is also noteworthy that Uganda, whose population is more than 36 million with 14% Muslims, is an important country in East Africa.

On the logo inaugural ceremony of AlHuda CIBE Uganda, Mr. Zubair Mughal- Chief Executive Officer of Al-Huda CIBE anticipated that the future progress of Islamic Banking in Africa, it will not only increase the economic and trade undertakings in the above mentioned countries but also it will be a stimulative cause of national development and growth in GDP. He said that future Islamic banking and finance market consists of what else than Africa and Central Asia. Moreover, Middle East’s Islamic financial institutions have already asserted their interest in Islamic finance in Africa. He said that Islamic finance will help out to alleviate poverty in Africa as Islamic Micro Finance has already been commended in the globe for poverty mitigation and economic and social development. He further said that AlHuda CIBE is commencing its services in South Africa soon to upsurge its incidence in African countries. He added that Islamic Banking is flourishing in African countries aggressively e.g. South Africa, Tanzania, Kenya, Sudan and Tunisia and many more. Many Islamic banks, Takaful companies, Islamic Fund and other Islamic financial institutions are already playing their role in the above mentioned countries successfully. 

Mr. Ahmad Abdullah, the country head of AlHuda CIBE Uganda, has said that the initiation of AlHuda CIBE setup in Uganda enjoys welcomeness and it will improve Islamic Banking in the country. He said that there is an enormous demand of Islamic Banking and Finance in Uganda. Moreover, the central bank of Uganda spreads red carpet for Islamic banking in the country.

It’s worth mentioning that AlHuda CIBE is a prominent brand name in the field of Islamic banking and finance for Advisory, Consultancy & Training. Furthermore, it has been proffering its services in South Asia, Central Asia, Middle East and Europe’s more than 20 countries for the last 8 years.

AlHuda CIBE will conduct a research study for Islamic Microfinance in Azerbaijan

An agreement for the advancement of Islamic microfinance was signed between AlHuda Centre of Islamic Banking and Economics and Vision Fund AzerCredit in a splendid ceremony at the capital of Azerbaijan, Baku. According to the agreement, AlHuda CIBE will conduct market research in different cities of Azerbaijan including Baku to formally initiate Islamic microfinance in Azerbaijan. Mr. Zubair Mughal, Chief Executive Officer, of AlHuda Centre of Islamic Banking and Economics and Mr. Sameer Jaffer Ali, Deputy Chairman Board of Directors, of Vision Fund AzerCredit signed the agreement. 

While addressing the agreement ceremony, Mr. Sameer Jaffer Ali said that this agreement is a milestone for the foundation of Islamic microfinance in Azerbaijan. It will lead to the commencement of micro and SME finances based on Islamic principles. He said that Azerbaijan is a country with 99% Muslim population and its people have been waiting for Islamic finance for quite a long time. This agreement is the first step towards fulfilling their financial needs according to Islamic principles. He said that through research reports we will get the realistic and pragmatic information on Islamic finance’s requirement in Azerbaijan, keeping in view public needs and demands, Vision Fund AzerCredit will introduce Islamic Microfinance products in the Azerbaijan market. 

Muhammad Zubair Mughal, Chief Executive Officer, of AlHuda Centre of Islamic Banking and Economics, while addressing the ceremony said that Azerbaijan will prove to be a good market for Islamic finance products as there is a high public demands for these products and it will further increase in the coming days. He, referring to his research in the different cities of Azerbaijan (Goycey, Sabirabad, Mislli etc.), said that there is very high demand of Islamic finances in rural and semi-urban areas and people were happy and excited when they learned about Islamic microfinance. Moreover, he said that legal and revolutionary amendments are required for the advancement of Islamic finances in Azerbaijan. It’s hoped that in coming days this issue will be sorted and Islamic retail banking will start in an effective manner. Approximately 10 Islamic finance institutions, including one government bank, are providing Islamic finance facilities at corporate level, which is a luminous illustration of Islamic banking and finance in Azerbaijan. 

It should be noted that AzerCredit is the second largest microfinance institution in Azerbaijan, which is providing its services in 18 regions of the country through its network of 56 branches. AlHuda CIBE is a Pakistani organization which is performing Islamic finance research services in difference countries. Particularly for the progress of Islamic microfinance, it established a specialized Department, AlHuda Centre of Excellence in Islamic Microfinance, which is providing its services for the development of Islamic Microfinance Globally.

MFI’s from 27 Countries unified for the development of Islamic Microfinance

Three-day “Global Islamic Microfinance Forum” was organized on 8th-10th December 2012, in Dubai World Trade Centre, UAE. The delegates from UAE, Pakistan, India, UK, Bangladesh, USA, UK Bahrain, Yemen, Azerbaijan, Turkmenistan, Kirghizstan, Mauritius, Kenya, Canada, France, Egypt, Philippine, Uganda, Iraq, Nigeria, Sudan along with delegates from other countries participated in the Forum. 

The salient topics discussed at the conference included bringing together the Islamic Microfinance Institutions on a single platform, role of Islamic Microfinance in poverty alleviation, Shariah and related issues of Islamic Microfinance Institutions and their solutions, Outreach of Al Huda Centre for Excellence in Islamic Microfinance to different countries and dissemination of Qarz-e-Hasna Model of Akhuwat. Representatives from microfinance institutions from 27 countries expressed their intent to unify their efforts for poverty alleviation and social development through Islamic Microfinance. 

Speaking on the successful completion of the forum, Zubair Mughal – Chief Executive Officer AlHuda Centre of Islamic Banking and Economics highlighted that the assemblage of a large number of institutions on the forum of Islamic Microfinance is a clear indication that it is the only viable solution of poverty alleviation around the globe. He urged the World Bank, IDB, USAID, IFC and other international institutions to include Islamic Microfinance in their priority list for social development and poverty eradication; otherwise the achievement of Millennium Development Goals of the United Nations will not be possible. 

While addressing the conference, Dr. Amjad Saqib (Executive Director – Akhuwat) declared that Islamic Microfinance Network will be spread all around the world; a specialist Shariah Supervisory Committee will be setup to cope with the Shariah challenges encountered by Islamic Microfinance Institutions. He further stated that the "3rd Global Islamic Microfinance Forum" will be organized by Al Huda CIBE in November, 2013. 

Al Huda CIBE hosted the said forum in Dubai with the joint effort of Akhuwat, in which internationally well-renowned speakers addressed the participants. The key-note speakers Justice Khalil ur Rehman, Shariah Advisor – AlBaraka Bank Limited, Mr. Kavilash Chawla MD, Nur Global Strategies- U.S.A, Mahesh Jayanarayan, Chairman UMEX Market Group Ltd-UK, Zaigham Mehmood Rizvi,Expert Consultant on Housing and Housing Finance-World Bank - Washington – U.S.A, Dr. Amjad Saqib, Executive Director - Akhuwat –Pakistan, Pervez Nasim Chairmen Ansar Financial and Development Corporation Canada, Syed Hussain Haider Senior Consultant - Govt of Punjab & Akhuwat, Ms. Katrin Fakiri MD (MISFA)–Afghanistan, Gulnora Yakubova, Operation Director, LLCMDO “ARVAND”-Tajikistan, Md. Ariful Islam, International Programmes Muslim Aid–Bangladesh, Humaiyun Saeed Jamshed, Senior Director (Marketing) SAB International FZ,UAE, Raffick Nabee Mohomed Founder & Secretary, Al Baraka Multi-purpose Co-operative Society Ltd,Mauritius, John D. Harwood, Canada, Aziz Ur Rehman Manager Shariah, Mawarid (Finance) UAE, Mohamed El 

Mehdi Zidan, Director Baraka Editions-France. Dr. Tariq Cheema CEO World Congress of Muslim Philanthropists - U.S.A and others presented their research papers on Islamic Microfinance to enrich the knowledge of the participants.

.:: Takaful Consultancy Wing ::.

Islamic insurance (Takaful) is flourishing all around the world alongside Islamic Banking. Its global market size has reached 12 billion USD whereas the number of Islamic Takaful institutions has exceeded to 350. These views were expressed by Muhammad Zubair Mughal, the Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics (CIBE) at the inauguration of AlHuda CIBE's subsidiary "Takaful Consultancy Wing". The inaugurated was held by Justice (r) Khalil Ur Rehman, Shai'ah Advisory of AlBarkah Bank in the ceremony organized at the head office of AlHuda Centre of Islamic Banking and Economics. Captain Jamil Akhtar Khan, Ex Chief Executive Officer, Takaful Pakistan, Abdul Samad, the Shari'ah Advisory Bank of Khyber and other prominent personnel of Islamic banking industry attended the ceremony.

Muhammad Zubair Mughal said that though Takaful industry is prospering in the recent times; however it's also facing certain challenges which include: issues regarding re-Takaful, regulatory challenges, competition and lack of human capital. These issues can be resolved by employing effective strategies and through proper planning. Unfortunately, there is not a single institution in the world which can provide guidance to Takaful industry on the above mentioned issues. Hence, to overcome all these challenges and issues of Takaful industry, AlHuda CIBE established a Takaful Consultancy Wing. Its principle consultant will be Captain Jamil Akhtar Khan who is a renowned and notable personality of Takaful industry. He has the expertise on Takaful regulatory issues, establishment of Takaful companies and other related departments.

Captain Jamil Akhtar Khan said that Takaful Consultancy Wing will be an independent institution which will provide its services to other organizations for the establishment of new Takaful companies, research, advisory, training, re-Takaful, Shariah guidance and other Takaful related matters. It will be a distinguished institution because of its services. Justice (r) Khalil Ur Rehman said that Takaful industry was in need of such institution from a long time, so that services related to Takaful industry can be provided internationally in an efficacious way. He also said that Islamic banking and Takaful are interdependent; hence in order to strength the Islamic banking industry, Takaful industry has to be strengthened as well. He was confident that AlHuda will play a vital role in this regard.

.:: Takaful Consultancy Wing ::.