5 Interactive Distance Learning Programs on Islamic Banking and Finance

Wednesday, January 29, 2014

Islamic Microfinance is an Ignored Segment of Islamic Finance Industry

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) which is conducting 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 forget 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 Shariah 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 an 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

Tuesday, January 28, 2014

Morocco Weighs Pursuing $1.7 Trillion Industry: Islamic Finance

Morocco plans this year to allow Islamic banking for the first time as the only North African nation with an investment-grade rating at Standard & Poor’s seeks to tap the $1.7 trillion industry.
The country’s cabinet approved a draft Islamic finance bill on Jan. 16, according to Abdeslam Ballaji, a lawmaker who worked on the proposed legislation and a member of the ruling party. The draft, which also regulates Islamic banks and allows for sukuk sales, is pending parliamentary approval and may be enacted within five months, he said last week.
Demand for financing that complies with Islam’s ban on interest is accelerating worldwide, with assets expected to climb to $3.4 trillion by 2018 from about $1.7 trillion last year, according to Ernst & Young LLP. More than 95 percent of Morocco’s population of 34 million back the introduction of banking that adheres to Shariah, according to Said Amaghdir, secretary general of the Moroccan Association of Participative Financiers, an Islamic finance business association.
“Given the choice, Muslim retail customers on the street generally prefer to bank Islamically, even if there are higher costs,” Khalid Howladar, a senior-credit officer at Moody’s Investors Service, said by phone from Dubai yesterday. “Islamic banks historically have tended to grow at twice the rate of conventional banks in Muslim countries, and as such they tend to take a market share from the conventional system.”

Billions Required

The Moroccan Association of Participative Financiers estimates total investment in Shariah-compliant products to reach $7 billion by 2018, provided the law comes into effect by the middle of the year, Amaghdir said by phone yesterday.
“Plans to expand solar and wind energy, tourism and industrial parks will require billions, and the Gulf Cooperation Council will be keener on putting money here when the law is enacted,” he said. The six-nation GCC, which includes Saudi Arabia and the United Arab Emirates, is predominantly Muslim.
Banks may also sell short-term sukuk to fund Islamic subsidiaries, Amaghdir said.
Morocco’s central bank allowed lenders and insurers to sell three Islamic products in 2007 to help develop the nation’s financial industry. The country is “almost” ready to sell its first sukuk, Prime MinisterAbdelilah Benkirane said in October.

Regional Competition

“We can’t afford to drag our feet any longer because regional competition for the Islamic finance pool is heating up, not just from our Muslim neighbors,” Ballaji, the lawmaker, said in a phone interview Jan. 20.
The U.K. plans to sell debut Islamic bonds this year as Prime Minister David Cameron seeks to revive a blueprint that’s been stalled since at least 2007. The Hong Kong government this month gazetted legislation to allow the sale of Shariah-compliant notes.
Moroccans may be misinformed about the benefits of Islamic banking, Ismail Douiri, co-chief executive officer of Casablanca-based Attijariwafa Bank, said in May.
“Islamic finance is often portrayed as low-cost type of finance,” Douiri said. “Islamic finance is not charity. One should not expect financing costs to decline.”
Shariah-compliant products are typically more expensive when they’re first introduced, Howladar of Moody’s said.
“Islamic products tend to come at a premium, because the creation of the products requires substantive investment,” he said. “Orthodox customers are willing to pay more to bank Islamically. Eventually, in the face of competition, those costs fall and are comparable to conventional products.”

Friday, January 24, 2014

Birth of new sovereign sukuk sources to broaden market

The birth of three new sources of sovereign sukuk – Britain, Luxembourg and Hong Kong – will broaden the market in Islamic bonds, helping in a small way to ease a shortage of top-rated paper that hurts the ability of banks to manage their funds.
However, a full solution to the shortage probably depends on a decision by Gulf Arab governments to boost their regular, international issuance of sovereign sukuk – a policy which they show no sign of adopting.
Issuance of sukuk has been rising rapidly in recent years; global issues hit an all-time high of $134.3 billion in 2012, before falling to $114.3 billion in 2013 as jitters about U.S. monetary policy constrained sales of most kinds of debt.
Growth is expected to pick up again this year as the pool of Islamic funds in the Gulf and southeast Asia continues to expand. A Thomson Reuters study predicts issuance of $130 billion in 2014 and $237 billion in 2018.
But the international market still lacks a steady supply of top-rated sukuk, which are available only from a small number of sources such as the AAA-rated Islamic Development Bank and the International Islamic Liquidity Management Corp (IILM), rated a notch lower.
The IDB is expanding its London sukuk programme to $10 billion from $6.5 billion, has a 1 billion ringgit ($300 million) programme in Malaysia, and plans also to list sukuk in Dubai. The IILM has $1.35 billion of outstanding sukuk and aims to raise this as high as $2 billion.
The few other highly rated international issuers include Qatar, rated AA by Standard & Poor’s, which issued $4 billion of sukuk in 2012 – the biggest U.S. dollar-denominated issue of Islamic bonds ever.
While conventional banks around the world can invest in the huge supplies of highly rated, interest-bearing sovereign bonds issued by the United States, Germany, Britain, Japan and other countries, Islamic banks cannot.
Governments in the Muslim world are often too rich to need to issue large amounts of sukuk, as in the case of the Gulf oil producers, or too financially constrained to be able to issue much, as in North Africa. This makes it difficult – and expensive – for Islamic banks to manage their balance sheets.
“There remains an acute shortage of high-quality sukuk in the market, and as such this constrains the liquidity management capabilities of Islamic banks,” said Khalid Howladar, senior credit officer at Moody’s Investors Service.
That is why the emergence of new sovereign issuers of sukuk is so important for Islamic finance. In October, Britain revealed plans to sell sukuk as early as this year, seeking to become the first sovereign outside the Muslim world to do so. It is still rated AAA by S&P.
AAA-rated Luxembourg, which competes with London as an Islamic financial centre, responded in early January by presenting a draft bill to parliament that would permit its own sovereign sukuk issuance.
A spokeswoman for Luxembourg’s finance ministry said approval of the bill would ultimately depend on the legislative calendar, which was not yet known. But Luxembourg may be a step ahead of London as its bill identifies three real estate assets to back its sukuk; Britain has not yet released such details.
Luxembourg could come to market in a matter of months, a source there said; it has a tested legal structure, a law covering securitisation vehicles that was introduced in 2004 and has been used by the Luxembourg-domiciled sukuk from the IILM.
Legal structures are crucial in the design of sukuk, as the instruments can face heavy taxation because they involve multiple transfers of the assets backing them.
Also this month, Hong Kong’s AAA-rated government said it hoped to raise funds with the territory’s first sovereign Islamic bond after the introduction of new laws.
“We hope that the bill will be passed as early as possible to provide impetus to the development of a sukuk market in Hong Kong,” a spokesperson for the territory’s Treasury told Reuters, without giving a time frame.
Hong Kong would issue under an existing bond programme, and it accumulated experience several years ago studying a proposal for a sukuk issue by its airport authority which did not materialise. It introduced tax legislation last year to facilitate local issuance of sukuk.
All these factors would help speed up a Hong Kong deal, said Davide Barzilai, partner and Asia Pacific head of Islamic finance at law firm Norton Rose Fulbright in Hong Kong. He added that the bill could be passed as early as the first quarter, followed quickly by an issue.
“I don’t think there is a new learning curve needed, they have already done that. This is not a race, but as it happens we (the three new sovereigns) are all moving at a similar pace.”
Initial volumes from these centres will not be large, however. Britain has said its first sukuk would be about 200 million pounds ($330 million), and would probably be a “one-off” rather than the start of a regular programme. Luxembourg’s bill envisages a size equivalent to 200 million euros ($270 million).
These amounts are dwarfed by the tens of billions of dollars worth of demand for highly rated sukuk expected from Islamic banks and other investors in coming years.
Unfortunately for these investors, this demand does not look likely to be satisfied by Gulf governments. Qatar now appears to be focusing on developing its domestic debt market, issuing 11 billion riyals ($3 billion) of local currency sukuk to local banks this month; its finance minister said in December that he had no plan for international debt issuance in 2014.
Saudi Arabia’s General Authority for Civil Aviation, guaranteed by its AA minus-rated government, issued a massive 15.2 billion riyal ($4.05 billion) of sukuk last October, but that was in its domestic market. The government has been paying down its outstanding debt, which is very small, and has shown no sign of issuing sovereign sukuk internationally.
With its huge cash reserves, the Abu Dhabi sovereign has never issued sukuk and has not made public, international debt issues its debut deal in 2009. Dubai has been relatively active issuing sukuk, but has not sought a credit rating.
Nevertheless, the new sukuk issues from Britain, Luxembourg and Hong Kong should benefit Islamic finance at the margin. Barzilai said they would help some banks meet liquidity and capital requirements under Basel III rules which will be phased in around the world over the next few years.
“These issuances, depending on the currency, are a step in creating a level playing field for Islamic banks,” said Nigel Denison, head of treasury and wealth management at Bank of London and the Middle East.
Another benefit is a potential widening of the range of currencies in which highly rated sukuk are denominated. The vast majority of international issues have been in U.S. dollars, but both Britain and Hong Kong plan local-currency deals, while Luxembourg could issue in either euros or dollars.
At present there is next to no cross-border trade in highly rated sukuk; primary dealers hold on to the IILM instruments after auctions and there has been little if any secondary market sales of them, said an official at one of the primary dealers.
An expanded flow of sovereign sukuk could move the industry closer to a tipping point where liquidity is high enough for secondary market trade to begin.
There is also the hope that sovereign issues from Britain, Luxembourg and Hong Kong will be imitated by other new issuers which want to attract funds from the Gulf and southeast Asia.
“Other European sovereigns may also follow the UK’s lead,” said Howladar.
Private corporations in the West may look more closely at sukuk, said Denison. “These transactions from the UK, Luxembourg and Hong Kong will help create a more liquid market by meeting the current demand, but will also raise awareness of sukuk and attract more conventional issuers.”

Tuesday, January 21, 2014

اسلامی ما ئیکرو فنانس عرب ممالک میں غربت ختم کر سکتا ہے

Arab countries can alleviate poverty through Islamic microfinance

Poverty can be reduced in Arab countries by taking Jordan as a regional hub of Islamic 

(Jordan) Poverty is increasing rapidly in the Arab countries which are blessed with surplus of mineral and oil resources, one of the reasons is absence of financial products for poverty alleviation which are compatible with their religious, cultural and social values and beliefs While through Islamic microfinance poverty can be controlled over and poor can be brought into the financial inclusion in Arab countries. These views expressed by Muhammad Zubair Mughal, Chief Executive Officer - AlHuda Centre of Islamic Banking and Economics (CIBE) in an international workshop on Islamic Microfinance jointly organized by AlHuda CIBE and Arab Student Aid International in Amman - Jordan.
To discuss the current status of poverty in Arab World, he said that poverty is increasing rapidly in Syria, Iraq, Libya, Egypt, Yemen and Tunisia as the consequence of Arab Springs while poverty already exists in Sudan, Somalia and other Arab countries which can be addressed effectively through Islamic Microfinance as it quite suited to their religious beliefs. He, presenting the poverty index in Arab countries, evidenced the substantial existence of poverty in Arab countries including Iraq by 23%, Iran 18%, Yemen 35.8%, Jordan 13.5% and Lebanon 28% etc.
He said that if we look into the geographical location of Jordan it seems to be surrounded by the conflict zones including the neighboring countries like Syria, Iraq, Palestine and Lebanon. While Micro enterprise development, educational development, refugees issues and job creation can be enhanced quickly through Jordan taking as regional hub for Islamic microfinance.
Addressing to the event, Ameera Yaaqbeh Hilal, Executive Director – Arab Student Aid International, said that Islamic microfinance is the critical need of time through which poverty can be alleviated from society by providing Shariah compliant loans to the students and enhancing their vocational capabilities. She also announced to establish the first Islamic microfinance institution in Jordan by utilizing AlHuda CIBE expertise and technical assistance #  

Monday, January 20, 2014

President for promotion of Islamic banking

KARACHI - President Mamnoon Hussain Wednesday said that the government is making serious efforts towards the implementation of Islamic Banking in the country.
Inaugurating Roundtable Conference on Islamic Banking here on Wednesday’ the President said Islamic Banking is gaining popularity and is fast growing in Pakistan.
The President said a Committee has already been notified to give recommendations for the promotion of Islamic Banking and to formulate comprehensive policy framework for Islamic Financial System in the country. He said that the Committee would be able to chalk out clear roadmap for transition towards Islamic Banking system in the country.
He said by virtue of being a just system that caters to larger interests of the individuals and society, Islamic financial system and institutions are fast developing into a different and distinct paradigm of economics. He expressed satisfaction that Islamic Banking is gaining popularity and is fast growing in Pakistan. The President said free from the curse of Riba, Islamic banking helps the believers in striving for a society that is free from social and economic injustices, exploitation and inequalities. He said the State Bank of Pakistan has recently taken some steps to promote Shari’ah compliant environment in the banking sector.
However, more efforts are required in this regard to facilitate citizens fully avail the opportunity of Islamic banking solutions. He said the participation of a delegation of Islamic Development Bank clearly shows the interest of President IDB, Dr. Ahmad Mohammed Ali and other senior management of the IDB towards supporting and promoting Islamic Banking in Pakistan.
He noted the presence of a top Malaysian banker H.E. Dato’ Seri Ismail Shahudin, Chairman, Maybank and said he  along with other banks of Malaysia have done a commendable job in promoting Islamic banking. 
The President said Pakistan can learn from the successful experience of Malaysian banks towards Islamic banking. In this context, greater interactions among Pakistani and their Malaysian counterparts would be of great significance, he added.
The President thanked Zahid Malik, Editor-in-Chief Daily Pakistan Observer, for arranging such an important conference on a subject of great importance and relevance to all of us.
He hoped that the deliberations during this conference would be instrumental in further promoting Islamic Banking in the country.

Source: The Nation

Tuesday, January 14, 2014

President of Pakistan to open Observer’s RTC on Islamic Banking tomorrow

   Foreign delegates to share their experience with Pakistani bankers

Tuesday, January 14, 2014 - Karachi—The President, Mr. Mamnoon Hussain, will inaugurate the Round Table Conference on Islamic Banking at the Governor House tomorrow (Wednesday) and the Finance Minister, Senator Muhammad Ishaq Dar, will preside over it. 

In the meantime, The President of the Jeddah-based Islamic Development Bank, Dr. Ahmad Mohamed Ali, has nominated a two-member delegation to represent the IDB at the RTC.

The Governor, State Bank of Pakistan, Mr. Yaseen Anwar, will deliver a keynote address at the RTC where two senior bankers from Malaysia will also express their views on the growing trends of Islamic Banking the world over. It may be mentioned that the Malaysian bankers have played a vital role in promoting the cause of Islamic Banking the world over. Presidents of the top Pakistani Banks will also participate in the RTC and they would have an open house discussion with their Malaysian counterparts.

In addition to the leadership of the Pakistani banking industry, the Chairmen and CEOs of other major entities will also join the RTC along with the President of the FPCCI.

Source: Pak Observer

Friday, January 10, 2014

Islamic banks face a moment of reckoning

Dubai’s push for key role in Islamic economy requires players to raise the game.

Islamic banks face a moment of reckoning

Dubai is preparing to become the capital of the Islamic economy. Experts estimate global Islamic capital amounts to $1 trillion (Dh3.6 trillion), according to a statement by Dr Ajeel Al Nashmi, head of the organising committee for the Islamic Jurisprudence Conference.
Dubai’s objective is in line with its historic endeavours as it set up Dubai Islamic Bank in the 1970s, making it a pioneer in the Arab world in the field of Islamic banking and the second after Malaysia, which experimented with Islamic banking in the 1940s.
Dubai’s goal tasks it with the responsibility of “re-Islamicising” banks in the region or restructuring them to become sound banks. This means Dubai has to focus on preparing a regulatory framework for these banks’ operations, and secondly touching on noticeable weaknesses or shortcomings in Islamic banking services, most notably obsolete ones, and the decline in quality of customer services.
It also has to look into bank advisory bodies, currently undergoing a state of disguised unemployment, bank regulatory bodies, strengthening governance systems, stanch decline in the usage of advanced technology, and intensifying training programmes for technical cadres.
Perhaps a little light should be shed on some aspects of Islamic banking. Often we hear people say that Islamic banks are good, meaning that they offer services that are not provided by conventional banks, despite having come into existence only 40 years ago. Islamic banks portray themselves as “non-conventional banks”.
The word “good” here also suggests that Islamic banks have created new products and non-conventional methods to serve customers, therefore “surpassing” other banks and financial institutions in the Arab world. On the other hand, Islamic banks are not very common in the global market, as most foreign banks are content with setting up Islamic banking solutions to attract Islamic capital.
There are two different services that a customer seeks in banks. The first is when a customer makes a deposit for a period of time for a set profit. The customer has the right to choose the area of investment which they feel is profitable.
The second form of service is when a person opens an account in which their monthly salary is deposited, and in return they receive other services such as a cheque book, credit card, bank statement and other services.
Some banks choose to operate in specialised fields. For example, there are banks that focus on agriculture and others on real estate and industrial projects.
There are two types of non-specialised banks.
The first has massive capital and its operations depend on financing huge projects and providing loans to countries. They have no interest in serving small customers, and they have a limited number of branches.
Banks with a small capital, on the other hand, prioritise customer services, are in regular contact with their customers and always inform them about new products.
Conventional banks operate with interest rates. They invest the money of a customer for profit over a period of time. For example, depositing Dh100,000 in a bank that operates with a 4 per cent interest rate would mean that the customer would make Dh4,000 in profit on their savings.
The perspective of Islamic banks on these is that they are Riba-based, because they set the rate of profit over a predetermined period of time. Therefore, stemming from Sharia, it is prohibited for Muslims to deal with these banks.
Then how do Islamic banks operate? Islamic banks are not any different from conventional banks. They are financial institutions that collect shareholder and customer money, invest them for a profit, which is later distributed to shareholders and customers at the end of each year. These investments are based on ‘murabaha’ against interest.
Murabaha after all is halal (permitted), while interest is riba and prohibited. It is best to quote in this case the Quran, in Surat Al Baqarah (verse 275): “Allah has permitted trade and has forbidden interest”.
Therefore, Islamic banks never set the “interest” for money saved for a certain period, instead the rate of profit is not specified. The reason behind such an approach is that the money of a customer, placed in the bank’s trust, is invested in commercial operation — if the bank makes a profit, so does the customer. If the trade results in a loss, then the customer’s capital remains unchanged.
This means that a customer would get a share of the profit, but their money remains protected against any losses. In face value, this kind of trade feels almost ideal.
This is despite the fact that a loss is liable to occur in any trade as a predetermined factor, but this trading operation is not subject to the profit and loss equation.
On close review, a predetermination might be incompatible with the philosophy behind the referenced Quran verses, as a person committing riba is gambling on the interest rate period for guaranteed profit, while Islamic banks do not specify a time period.
In Islamic banks, for example, if a customer deposits Dh100,000 for a year, they might make a profit of Dh4,000, Dh6,000, or nothing at all. In conventional banks, including non-conventional Islamic banks, the funds deposited by customers and shareholders are invested for profit for investors and customers, and some of this profit will be used by the bank to pay the salaries of its employees, bonuses for members of the board, and operational expenses.
The question is: Where do Islamic banks invest the funds of customers and shareholders? Unfortunately, some Islamic banks invest in areas that are not compliant with Islamic principles that they promote to their customers. Some, for example, invest in local and foreign riba-based banks.
And how do the advisory and regulatory bodies deal with these banks? That is a sad and funny tale best kept for another time.

— The writer is a columnist and journalist.

Source: gulfnews.com

Tuesday, January 7, 2014

Jordan is promoting Islamic Tourism

Jordan has launched a campaign to attract tourists from Muslim countries to boost the domestic tourism sector, reported the al-Hayat newspaper.

“The board launched a campaign to promote Islamic tourism in Jordan and attract tourists from Muslim countries, especially from Malaysia and Indonesia, given that Jordan is a base and a gateway for holy Muslim and Christian shrines,” said Abdul Razaq Arabiyat, the managing director of the Jordan Tourism Board, in a released statement.

The campaign aims to boost the profile of religious sites in Jordan as an attraction for foreign tourists and seeks to promote religious tourism as “a main source of tourism revenues in the kingdom,” added Arabiyat.

A number of promotional programs have been adopted by the board to attract those Muslim tourists intending to travel to Saudi Arabia to perform the annual hajj pilgrimage, who then continue on with their religious tour by traveling to Jordan and Palestine.

“We’ve signed a number of agreements with tourism companies in Indonesia and Malaysia on visiting religious shrines in Jordan and Palestine… such as the site of the battles of Islamic conquests,” said Arabiyat.

Source: CMM-News Blogspot

Monday, January 6, 2014

Islamic Finance On the Verge of a Tipping Point

Will the year 2014 be a tipping point for Islamic finance? It’s a question on the minds of many inside the rapidly growing industry, as a confluence of factors came together in 2013 that could portend a structural shift in how the world views Islamic banking products and the Islamic consumer. In order for the tipping point to be achieved, the industry must move beyond its traditional hubs of Malaysia and the Gulf states and expand across emerging markets, Europe and the United States.
In October 2013, British Prime Minister David Cameron noted that the UK will issue a sukuk, an Islamic bond, making the United Kingdom the first non-Muslim sovereign to do so. He said the UK intends to issue the sukuk in early 2014. Though small in size—the talk was of a 200 million British pound offering—the bond would represent a symbolic breakthrough and pave the way for more substantive offerings.
David Cameron’s government has assembled a team of Islamic finance and industry experts to fashion a strategy for London to compete with Kuala Lumpur, Bahrain and Dubai as an Islamic finance capital. Competition would be good for the industry as a whole, and London’s “stamp of approval” could also serve as a catalyst for growth in other European capitals.
Meanwhile, in the United States, a Washington-based investment bank, Taylor-DeJongh, is leading an effort to package Islamic financing in the form of a security for a major US rail car operator. Continental Rail, a carrier of freight along the east coast, would be among the first major US businesses to receive such financing. That the story was reported in the influential DealBook section of theNew York Times’ business pages should be considered a sign in and of itself. Entitled “Islamic Banks, Stuffed With Cash, Explore Partnerships With the West,” the story ran on the front page of the business section: a wake-up call to all of New York’s investment-banking community.
Taylor-DeJongh has assembled a team of five bankers with experience in Islamic finance who will seek to create innovative products for US companies looking to tap Islamic funds. No doubt others will follow TaylorDeJongh’s lead.
Muslim country sovereign wealth funds and banks based in Muslim countries have long invested in the United States’ equity markets, real estate, and other products, but investors who adhere to Islamic principles of finance are relatively new to the market. The key to the success of Islamic finance in the United States will be its roll-out and messaging. Unfortunately, the term “Islamic” could still be seen as threatening to US consumers. Even those who do not find the idea of “Islamic” finance threatening would view it as exotic and niche.
Thus, a strategy that aligns Islamic finance with the ethical investing movement in the United States would serve the industry well. Second, it should also be presented as a more secure, less risky model of finance. One of America’s most famous economists, Nouriel Roubini, recently said: “There is a need for a more resilient system, and that’s where there is potential for the Islamic system. It is less volatile and potentially more stable than conventional financial systems. The advanced economies can learn from the Islamic system in this respect,” he says.
But perhaps the most consequential factor fueling the tipping point argument might be the aggressive effort by Dubai, announced in 2013, to become the Islamic economy capital of the world. Dubai has a history of spotting a trend in its high growth phase and both riding that trend and reinforcing it. A good example is the rise of Emirates Airline, founded in 1985, and now on track to become the largest carrier in the world and a global brand icon. Emirates Airline both rode the trend of rising mass air travel and also fed the trend by creating more supply.
Dubai was already an important Islamic finance center, but the Emirate sees the story as larger than one of just banking. It has identified seven areas of growth, from halal food to Islamic consumer products to tourism and travel and cosmetics and pharmaceuticals. By growing the pie beyond finance, Dubai has demonstrated the enormous untapped potential of the Islamic economy. Indeed, a report issued by Thomson Reuters estimates the total value of Islamic business at 6.7 trillion dollars. IN GDP terms, this is only surpassed by China and the United States.
Malcolm Gladwell’s famous “tipping point” theory suggested that there is a “Law of the Few,” which posits that a few key types of people must champion an idea before it reaches its tipping point. He calls them “Connectors” and “Salesmen.” Dubai has been playing these roles for the past two decades, even for more than a century, and the emirate’s recent win to host Expo2020 cements its reputation as a global city.
Finally, Dubai’s push is not a passing fad. It is backed at the highest levels of the government. The fact that UAE Prime Minister and Ruler of Dubai Sheikh Mohammed Bin Rashid Al Maktoum appointed his trusted son and heir apparent, Sheikh Hamdan Bin Mohammed, to lead this effort and brought in one of the Arab world’s most capable government advisors, Mohammed Gergawi, to chair the Board, suggests a seriousness of purpose and longevity in implementing the plan.
From rail cars in the US to a British Prime Minister’s promised sukuk to the full weight of Dubai, Inc., pushing forward a strategy of growing Islamic business, the signs of a tipping point abound.

Afshin Molavi

Afshin Molavi

Afshin Molavi is a senior fellow at The New America Foundation, a non-partisan think tank, whose work has been published in dozens of publications, from Foreign Affairs to the New York Timesand the Financial Times.

Saturday, January 4, 2014

International Trade can be enhanced through Halal Certification : Muhammad Zubair Mughal

The Global Halal Market size of 1.8 billion Muslim population is $ 3.2 trillion.
Zubair Mughal (CEO - Halal Research Council) Speaking about “Halal Certification Process” at “International Halal Accreditation Forum 2013” which was held on 25th – 26th October, 2013 at Istanbul by the Govt. of Turkey. This forum was inaugurated and chaired by H.E Tayyip Erdoğan, Prime Minister, Republic of Turkey. — at İstanbul Congress Center / İstanbul Kongre Merkezi
(Istanbul) The importance of Halal Certification is being well-known because of rising awareness with Halal in Muslim societies which is increasing the Halal Certified products and services rapidly and finally international trade can be enhanced in the Halal marker having a size of $ 3.2 trillion of 1.8 billion Muslim population, these views were expressed by Muhammad Zubair Mughal CEO – Halal Research Council (HRC) during the speech at International Halal Accreditation Forum (IHAF) jointly organized by Turk AK, Ministry of European Union Affairs and SMIIC under the supervision of Turkish government on 25th and 26th October, 2013 at Istanbul in which delegates from more than 60 countries participated.

He also said that there are more than 300 Halal Certification bodies working in more than 125 countries while Halal certification is not only the name of business rather a big religious responsibility and on its basis, millions of people use these products discriminating the Halal and haram but a minor ignorance can cause a damage to the Shariah. In Islam Halal and haram is not only confined to the Food industry rather its scope covers the Services (Islamic Banking, Halal Tourism and Halal Business etc), Cosmetics and Physical (Touchable) items. He also pointed out that non-Muslims have 82% control over Halal industry which is the unsafe phenomenon for the Muslims having only 18% share in the Halal industry. He, presenting Pakistan as a Case Study, said that there is viable environment in Pakistan for Halal Industry in which Halal Laboratories, Halal Meat Complex, Halal Accreditation Scheme, Government facilitations and well known Educational Institutes and schools for Food Industry are included that is why the majority people, having more than 50% control on Halal Certification belong to Pakistan and also facilitating in Halal Certification in America, UK, Germany, Australia, Canada, Norway, Switzerland, Belgium and Spain which is an authentic source of availability of Halal Products for Muslims.

Tayyip Erdoğan – Prime Minister of Turkey, addressing to inaugural ceremony of International Halal Accreditation Forum (IHAF), welcomed all the international experts of Halal Industry came from different parts of the world and expressed his well wishes for the success of Forum. Remember, IHAF itself was the first initiative on Halal Accreditation of Halal Certification Industry.     

Friday, January 3, 2014

Certified Islamic Fund Manager

AlHuda CIBE is a pioneer organization started its efforts to promote Islamic Banking & Finance eight years ago. AlHuda CIBE has primarily been committed to provide quality services. It has built up a range of excellent services in the promotion of Islamic Banking & Finance into the masses through Advisory and Consultancy, Education, Trainings, Awareness, Product Development and Publications.

In our continuing development and professional excellence, we are pleased to offer “Certified Islamic Fund Manager” designed by industry specialists and renewed Islamic scholars. This program ensures the balance between the subjective and practical knowledge on Islamic Funds and Asset management. It also offers comprehensive knowledge that will strategically prepare candidates in building their skills, competencies and experience as they enter into the Islamic funds and asset management being Shariah compliant.
Profile of this program is attached for your kind perusal. For further information about the program, please visit: www.alhudacibe.com/dlp/islamicfund.php

Wednesday, January 1, 2014

2014 will be promising for Islamic Finance Industry

Islamic finance volume will be reaching at US $ 2 trillion with having 78% share of Islamic banking, 16% Sukuk, 1% Takaful, 4% Islamic funds and 1% Islamic Microfinance: Zubair Mughal

(Lahore) Islamic finance will grow with rapid pace in the year 2014 and its volume will pass through US $ 2 trillion where Islamic banking keeps 78%, Sukuk 16%, Takaful 1%, Islamic Funds 4% and Islamic Microfinance has 1% share in the Islamic Finance industry. In the year 2014, Dubai and London will be in competition to be the global hub of Islamic Banking and Finance while Kuala Lumpur will also attempt to be in this contest but the Islamic finance industry can be grown more through synergizing approach and alliance with industry stakeholders rather than setting any competition. These views were expressed by Islamic Finance expert, Mr. Muhammad Zubair Mughal, CEO - AlHuda Centre of Islamic Banking and Economics (CIBE) during an analysis on Islamic finance industry in the beginning of year 2014.        

He said that the Islamic finance industry growth will go on double digit in 2014 which will turn the US $ 1.6 trillion volume of Islamic finance industry in December 2013 to US $ 2 trillion by the end of 2014 including North African countries (Tunisia, Libya, Morocco, Senegal and Mauritania etc), rising trends of Islamic finance in Europe and UK, also the rising and substantial share of international market of Sukuk shall contribute to it. It is anticipated that India and China may step towards the Islamic finance in 2014 where more than 200 million Muslim populations are in search of a compatible financial system with their religious beliefs and thoughts. He said there is no doubt that international financial crisis will not hit the Islamic finance industry but due to the Arab Spring, Islamic finance industry has faced recession in some countries of MENA but there are chances of  their revival in 2014.

He, giving an analysis, said that Sukuk will grow rapidly in 2014 and Muslim countries including non-Muslim countries e.g UK, China, South Africa and Europe etc will also get benefit from it which will enhance the growth in Islamic finance industry but Takaful Industry is not supposed to have any substantial breakthrough. It is being hoped that 2014 will prove better period for Islamic Microfinance industry as different international institutions including Islamic Development Bank (IDB) have declared it a potential tool for poverty alleviation around the globe. He also added that Islamic finance industry may face recession in certain countries including Indonesia while in Nigeria and Tunisia it may face some problems on religious and political grounds. He said that the Islamic finance initiatives in America and Canada including Latin American countries (Brazil, Argentina and others) have been taken and it is hoped that Islamic Funds market will come into existence in these regions by the year 2014.