May 2010 Issue

Islamic Bank Enters Germany

Arab News, Middle East

Islamic banking launched in Tanzania

Biz Community, Africa

Central Bank of Kenya seeks to grow Islamic finance

Daily Nation, Kenya

The government is studying the Islamic finance model with a view to making the country competitive. Central Bank of Kenya says this form of finance is fast catching up. Governor Njuguna Ndung’u on Monday said that despite the financial crisis, Islamic finance had demonstrated strong growth with new business areas such as mutual funds and Takaful industry attracting a lot of attention. Theoretically, Takaful is perceived as cooperative insurance, where members contribute a certain sum to a common pool. The purpose is not for profits but to uphold the principle of bearing one another’s burden. “We need to understand this business model that will support our relative comparative advantage in the East African Community region,” said Prof Ndung’u during a Gulf African Bank Annual East & Central Africa Islamic conference.

Islamic finance - Answer to global economic problems

Al Bawaba, Lebanon

Adopting Islamic finance practices could lead to a more equitable global economic system, an Islamic finance expert told an AUB audience. Sheikh Zaher Nsouli, chief of Sharia audits at the Lebanese Islamic Bank, added that methods applied in Islamic institutions could help prevent future economic meltdowns. “No economy is capable of doing or reaching such results except with Islamic finance, which is divine. As GDP increases, the Zakat increases and goes towards poverty alleviation,” he said. According to Soubra, 97 percent of all transactions done on the New York Stock Exchange were based on speculation. “Nobody goes for real delivery and this is not acceptable in Islamic finance,”

African Islamic finance faces an image problem

Business Daily, Africa

Africa’s Islamic finance industry needs to overcome negative perceptions among non-Muslims to successfully expand into predominantly Christian sub-Saharan Africa, an industry leader said on Tuesday. Northern Africa is largely Muslim and countries such as Egypt and Sudan have offered Islamic banking for decades. Now some lenders are looking to expand into sub-Saharan nations, such as Uganda which is 80 per cent Christian. Islamic finance caters for customers who want to avoid earning interest, which is viewed as usury under Islamic law. Islam also prohibits speculation and investment in non sharia-compliant industries. Islamic banking operates on a small scale in a few sub-Saharan countries, such as Kenya, South Africa, Botswana and Nigeria. Industry participants say Tanzania, Malawi, Uganda and Zambia would be next. Each have minority Muslim populations. “The biggest challenge we face is the perception that this is a bank only for Muslims, which is not correct,”

Shariah friendly Italian financial instruments

The Independent, Malta

Studio Associate Dagradi & Soleto of Milan, has recently concluded an agreement with Erremme Business Advisors, consulting firm specialised in Islamic Finance based in Malta and working in various Gulf countries. The common goal is to provide a legal and fiscal framework of Islamic Finance assistance in the Italian jurisdiction. The reason why Islamic finance in Italy is not as widespread as in other countries is because of the lack of legislative incentives. However the combination of expertise has allowed the design of instruments that mitigate the effect of the non-Shariah friendly legislation.

2010: Active year for Islamic finance in Kingdom

Arab News, Middle East

Judging by the number of deals closed, funds launched and the presence of new institutions, 2010 is turning out to be a very active year for the Islamic finance market in Saudi Arabia. The Kingdom, in terms of pool of funds, is the largest player in the global Islamic finance market, although its industry, like elsewhere, is subject to traditional bottlenecks, scarcity of human capital resources and underdeveloped market awareness. There is no doubt that the Saudi market is underpinned by its economic fundamentals - that the Kingdom is the world's largest oil producer and exporter. In addition, while the official foreign reserves held by the Saudi Arabian Monetary Agency (SAMA) are just under half a trillion US dollars, private liquidity in the Kingdom is estimated at $1.2 trillion.

More non-Muslims keen on Islamic finance

The Star Online, Malaysia

Islamic finance, which has shown its resilience with uninterrupted growth in recent years despite the challenging global environment, has drawn significant interest from non-Muslims. Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said interest in Islamic financing was no longer restricted to Muslims but have spread to non-Muslims. Speaking at the Malaysia Showcase Dinner in conjunction with the 7th Islamic Financial Services Board Summit, she said Islamic finance’s sustained and largely uninterrupted expansion had drawn significant international interest. Zeti said this could be seen from the efforts taken by financial centres in London, Hong Kong and Singapore in enhancing the development of Islamic finance.

Spain to be hub of Islamic finance

Examiner, USA

Spain is close to the Islamic world, a gateway to Europe, and a connection with Latin America. Saudi Arabian businessmen plan to establish Spain as a hub of global Islamic finance. Islamic rules of finance are laid down by Sharia, Islamic law. A speaker at a rally in New York explained that Sharia requires Muslim business to donate to charity, but .....

Islamic financial system can bails out sick economies

Observer, Pakistan

The Pakistan Economy Watch said properly developed Islamic financial system can reduce miseries of humanity by bailing out ailing economies. The fast-growing Islamic finance industry (IFI) has potential to contain unemployment and boost economies if an efficient and effective monitoring mechanism is in place. This will also help boost confidence of masses. Integral mechanism of IFI has successfully sustained the impact of credit crunch and global financial meltdown which has made it popular across the globe, said Dr. Murtaza Mughal, President PEW. This infant industry needs creativity and guidance to ensure Shariah compatibility and integrity of the products offered.

Professionals told to get up to speed with Islamic Finance

The Business Desk, India

Professional are being urged to get up to speed and undertake additional training in order to take advantage of the growing Islamic finance market. Lobby group Business Voice WM is spearheading moves to bring the issue to the attention of the region’s professionals and get them involved. Islamic finance forbids the charging of interest or usury and so practitioners adopt other forms of agreements usually based around profit sharing.

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