Amana starts first Sri Lankan commercial bank under Islamic law

(Reuters) - Sri Lanka's Amana Bank on Friday said it will next week start the operations of the island nation's first sharia-compliant commercial bank with the opening of 14 branches across the country.

The bank in a statement said it from Monday will offer a range of products including trade and treasury services.

Over the last 10 years, Amana developed its insurance and investment divisions as it prepared to become a bank.

Analysts estimate the island nation's Islamic finance industry has the potential to become a $1.5 billion business, given appropriate tax and other laws approved by Sri Lankan government based on sharia, the Islamic legal system.

Muslims make up about 8 percent of Sri Lanka's 21 million people, but Islamic financial products are also popular among non-Muslims due to their interest-free nature.

Amana's insurance arm, Amana Takaful has already been listed on the island nation's stock exchange .

In February, the bank's shareholding amounted to 3.4 billion Sri Lanka rupees ($31.1 million).

Bank Islam Malaysia Berhad accounts for 20 percent of Amana's strategic investments, while AB Bank, Bangladesh, has a stake of 15 percent and Saudi Arabia'a Islamic Development Bank has 10 percent. ($1 = 109.450 Sri Lanka Rupees) (Reporting by Shihar Aneez; Editing by Bryson Hull)

First ever open-ended Shari’ ah-compliant fund launched

By Cassandra Mascarenhas

The first ever open-ended Shari’ah-compliant fund, the Crescent i-Fund, a joint initiative of the pioneer asset management company in Sri Lanka Comtrust Asset Management and ADL Capital Limited, was launched last week in the midst of many prospective investors.

Looking to invest chiefly in Sri Lankan equities, the Crescent i-Fund will provide Shari’ah conscious investors the chance to enjoy significant returns in the Sri Lankan stock markets and the fund’s objective of achieving long-term capital appreciation by investing in a portfolio of Shari’ah compliant equity securities listed on the Colombo Stock Exchange will allow them to do so.

The fund was granted approval by the Securities and Exchange Commission (SEC) of Sri Lanka last month and a Shari’ah Committee consisting of a distinguished panel of scholars of domestic and international repute will ensure that the operations of the Fund will be in accordance with Shari’ah principles and the Deutsche Bank will act as the Trustee on behalf of the investors.

Comtrust Asset Management, a member of the CT Holdings Group is one of the pioneer Unit Trust Management companies to be registered with the SEC and has a senior management team with extensive experience in the Sri Lankan equity markets.

The CT Holdings Group is one of the largest listed conglomerates on the Colombo Stock Exchange, with interests spanning retail, food and beverage, manufacturing, plantations, property development and financial services.

Some of the companies in the group include Cargills (Ceylon), Lanka Floortiles and Lanka Walltile, Horana Plantations, CT Land Development, CT Smith Stockbrokers and CT Properties.

ADL Capital Limited is registered by the SEC as an investment manager and its team of qualified professionals has extensive experience in the burgeoning Islamic finance industry with the combined experience of the key personnel in this industry spanning over a decade. The senior executive team at ADL has also been involved in equity markets, which enabled the company to actively contribute to the development of this pioneering effort.

With an investment policy of investing in long term stocks, the Fund will concentrate on engaging in fundamental research to identify stocks which would provide above-average returns over the long term and will invest in sufficiently diversified portfolios at all times to mitigate the risk of excessive volatility and achieve a satisfactory risk-return trade-off.

Created on 16 May 2011 by a Trust Deed executed between Comtrust Asset Management as the managing company and Deutsche Bank Ag Colombo as the trustee, the Fund will operate as an open-ended unit trust which can offer units to investors on a continuing basis.

The investment objective of the fund will be to achieve long term capital appreciation by investing in a portfolio of equity securities thus allowing investors the opportunity to invest in shares that have been deemed Shari’ah compliant by Shari’ah scholars as per the guidelines issued by the Accounting and Auditing Organisation for Islamic Financial Institutions, the standard setting body for Islamic financial institutions based in Bahrain.

http://www.ft.lk/2011/07/19/first-ever-open-ended-shari%E2%80%99-ah-compliant-fund-launched/

The next milestone: Islamic banking and finance in Sri Lanka by Muath Mubarak

With a civil war behind Sri Lanka, MUATH MUBARAK highlights the mechanisms needed by the Islamic finance industry to facilitate the country’s economic development.

Today, Islamic fi nance is a thriving industry partly because the benefit derived from the Islamic economic system is more beneficial to society than that offered by prevailing conventional banking practices.

Some developing and developed countries; namely, Australia, Canada, France, Hong Kong, India, Malta, Singapore and Thailand, are actively engaged in building this young and niche market by making amendments to their regulations and legal frameworks.

The miracle of Asia Following the end of Sri Lanka’s civil war, the government is committed to ensuring the country’s long-term economic development. It has already achieved several successes, including establishing the fi rst fully fl edged Islamic bank.

There was a period where Islamic banking and finance (IB&F) was unlikely to respond to the changes needed to meet the aspirations of IB&F in the country. These include providing the basic and more innovative products.

Over the last decade, there have since been many efforts put forward to develop the local industry, such as the establishment of the country’s first Islamic bank.

There is a pivotal need to review and assess all underlying legal and tax systems to nurture, direct and protect

the industry. Otherwise this emerging industry will not facilitate economic development in the country.

This understanding has led countries with complicated tax regimes, such as the UK and US, to the process of reforming and restructuring their tax laws and other relevant regulatory requirements to attract Islamic investors. It is a longterm plan involving constant review to overcome disputes with more workable

solutions.

It is only by ensuring Sri Lanka’s legal and tax systems are aligned with Islamicprinciples that healthy competition among Islamic fi nancial institutions (IFIs) with more innovative business strategy can grow and in turn, develop the economy. This is a strategic investment issue for foreigners from the GCC and other interested parties to invest in Sri Lanka.

The Islamic Finance Focus Group was formed of industry experts in the fi eld of IB&F to work with regulators and other authorities. Following this, law and tax suggestions were proposed in the country’s budget 2011 in order to eliminate the tax barriers and help IFIs to compete and strategically position themselves on a level playing fi eld in the global fi nance sector.

This proposal of tax reformation must consider stamp duty, value added tax, nation-building tax, tax returns and withholding tax. It will be a wide open and unique banking segment to experience the true Islamic banking. There is room to make certain concrete and visible changes in order to allow Islamic finance to prevail in the country.

Corporate governance, compliance and risk management of Islamic banks are also very important to fuel the

industry’s healthy growth. The relevant authorities must make the required changes to mitigate future risks such as corporate failures, scams and collapse of the banks which can occur in the absence of sufficient corporate governance codes.

Once the system is in place it will be easy to monitor the banks’ operations and issue guidelines to direct the financial institutions and banks. This can be done by implementing prudential regulations ratios such as capital adequacy, liquidity and risk management and other financial measurements.

Even though the Islamic capital market in Sri Lanka has a long way to go,some initiatives have given birth to

new ventures aimed at identifying and assisting Islamic fi nance investors to invest in the country. The absence of capital and money market regulations for Islamic fi nance institutions will hinder the growth of this market segment.

Continuous lobbying with the relevant authorities will help address these issues. Recent IPOs in the country have illustrated the expansion of listed companies and can encourage foreign direct investments, particularly from GCC investors. These investors can also invest more eff ectively if the current system is reformed.

A strong foundation for the growth of this industry has yet to be laid down. Lack of research in Islamic banking in Sri Lanka has prevented the market from identifying the industry’s precise growth rate or asset size. Another issue is the lack of human capital in the industry in Sri Lanka.

There are more than fi ve institutions which have been educating the public about the industry while creating some public awareness and promoting the industry by inviting world renowned speakers, scholars and experts.

Yet there is a huge gap between knowledgeable and experienced industry professionals in the market and the

demands of the industry. This is a global issue and needs to be addressed to take this industry to the next level.

With Sri Lanka at peace and making an effort to be the ‘Miracle of Asia’, this will pave the way for the country to grow in leaps and bounds. Rapid infrastructure developments will require significant capital funding. The country can easily attract investors, particularly Islamic finance investors, to these lucrative projects.

Muath Mubarak works in the fi nance control department at Barwa Bank in Qatar and he can be contacted at muath.2009@gmail.com or muath@fi rstglobal-group.com.

This was published by Red Money Group in IFN on 8-Jun-2011

The Flourishing of Islamic Finance in Malta By Reuben M Buttigieg and Muath Mubarak

Located in the heart of the Mediterranean, Malta is one of Europe’s smallest and most densely populated countries. It is also one of the most Catholic countries in the world, with more than 360 churches located in just over 300 square kilometre of land.

Along with many other non-Muslim countries, Malta is willing to offer Islamic fi nancial products and services based on the Quran and Sunnah. Even the Roman Catholic Church talks about the injustice of interest or usury and how it has become widely accepted. In this context, Islamic banking and fi nance is fl ourishing and the Maltese government and other regulatory bodies are taking initiatives to attract Islamic Finance Institutions (IFI) and investments to the country. Malta has a small open market economy with a well-developed and sound fi nancial system in place that is regulated to European Union (EU) standards. The country has excellent relations with all EU and North African countries and the World Economic Forum considers Malta as the 10th safest country to invest in. The banking sector is regulated by the Malta Financial Services Authority. 

The sector has undergone continuous development in tandem with the rapid growth of the global fi nancial sector with regards to fi nancial liberalization, integration and harmonization with other jurisdictions and respective laws, cross-border capital fl ows, and more. The Malta Financial Service Authority is a fully autonomous public institution that reports to Parliament on an annual basis. It is empowered to issue directives and establish other regulatory requirements for the sectors.

On the other hand, the Central Bank of Malta plays a vital role in the formulation and implementation of the government’s monetary policies and ensures the effi ciency of the country’s fi nancial system. It acts like any other European central bank such as the issue of currency, maintenance of external reserves and being a banker to the government and commercial banks.

The Banking Act regulates banking business activities with the adoption of EU directives for regulatory concepts and supervisory practices. Non-banking activities are regulated by The Financial Institution Act and The Investment Services Act.

One of the fastest growing sectors in Malta is the fi nancial sector which has been fuelled mainly by the country’s national policy. Malta is one of the fi rst six countries in the world to reach an advanced accord

on fi scal matters with the Organization for Economic Co-operation and Development (OECD). The country completed a decade-long program to reform its fi nancial sector legislation to be on par with international best practices, and has expanded its jurisdiction from offshore to onshore. This was done in a manner that maintains Malta as an attractive jurisdiction given its tax system and its 50 Double Taxation treaties - the most signifi cant being the treaty with Libya.

Other important developments that have taken place in recent years is the gaining of EU membership in 2004, removal of exchange controls in 2007, the adoption of the Euro and the formation of Single Euro Payments Area in 2008.

Malta offers a concrete tangible opportunity for IFIs though various legislative instruments. The country aims to act as a gateway for Islamic Finance to North Africa and Europe. In May 2008, the MaltaFinancial Services Authority issued a consultation document entitled “Islamic Finance in Malta – Application to Banking & Securities”, and received positive response from institutions interested in Islamic fi nance. Recently, the Malta Financial Services Authority issued the fi rst guidance notes on Shariah compliant funds.

The island state is eager to attract other Islamic fi nance instruments also, such as Sukuk (securitization through Special Purpose Vehicle), Takaful (Islamic insurance), Islamic equity markets, Islamic stock market and money market practices, Shariah compliant funds and trust certifi cates and more, along with proper corporate governance and risk management structures in place.

Malta offers solutions in all these areas, as is evident from the establishment of Islamic fi nance advisory fi rms and the launch of Islamic fi nance training courses and seminars. In order to increase awareness about Islamic fi nance among industry professionals, the number of Islamic banking and fi nance workshops and seminars has risen in recent years, and is in fact producing concrete results.

In fact, Malta has attracted a considerable number of SPVs within Islamic fi nance structures, given that Malta has offered solutions that no other tax attractive jurisdiction has come up with in the case of certain Islamic fi nance transactions within the EU, Malta is in fact now offering solutions for Sukuk issuance in the EU member states.

Furthermore, Malta is now experiencing the fi rst Shariah compliant funds registration as well as the fi rst re-Takaful application. A bank has also announced that it will be offering Islamic banking products in Malta.

The Trusts in Malta are also another instrument that is fl ourishing from an IFI point of view. The industry hopes that the Maltese government can attract Islamic fi nance investors through the issuance of a sovereign Sukuk for infrastructural projects, seeing that the country is strategically located to serve most of the Mediterranean countries. This will further enable infl ow of funds into the country. 

Finally, industry players believe that Islamic fi nance will truly render Malta a reputable Mediterranean fi nancial services hub, and send the country well towards its Vision 2015 of becoming an Islamic financial centre of excellence.

The leaders of Malta, president of the republic Dr Goerge Abela and prime minister Dr Lawrence Gonzi, have expressed their commitment to Islamic fi nance and actively encourage IFIs to utilize Malta as the Bahrain of the Mediterranean. It is believed that if Malta continues in the right direction it can compete with London as an Islamic finance hub in Europe.

Reuben M Buttigieg

Managing director

Erremme Business Advisors

Email: rmb@erremme.org

Muath Mubarak

Coordinator, fi nancial control & strategic planning

Barwa Bank, Qatar

Email: muath2015@gmail.com 

This was published by Red Money Group in IFN on 26-May-2010

Sri Lanka: Uncovering the Islamic Finance Framework By Muath Mubarak

With the end of the civil war in the country that had plagued the economy for more than three decades, it is high time Sri Lankans began thinking about the development of the nation. Sri Lanka has to grow like other developed countries within a short time by exploiting untapped opportunities.

The post-war period requires rapid development in all sectors of the economy, especially the banking and financial sector. Unfortunately, the sector has seen lackluster growth due to the global fi nancial crisis. The crisis however has led experts and economists alike to consider an alternative financial system.

As one of the fastest growing industries in the world today, Islamic finance is growing at 20%-25% a year, according to analysts and rating agencies. It is forecasted that the industry will hold assets totaling US$4trillion by 2012. In addition, seven of the top 10 conventional banks with an international presence have commenced Islamic banking.

The following are the main barriers for the growth of Islamic fi nance in Sri Lanka (and most other emerging countries):

• Regulation

• Taxation

• Standardization

• Awareness

• Skill

The Islamic fi nance framework

Islamic fi nance and Takaful are not unfamiliar to the Sri Lankan business community. The concept was introduced a decade ago, and several initiatives via seminars and workshops have also been undertaken by companies and organizations to create public awareness and educate the masses and offi cials concerned.

The Banking Law of Sri Lanka was amended in 2005 to allow both commercial banks and specialized banks to operate on a Shariah compliant basis. But there is no specifi c law for Shariah compliant fi nancial transactions.

For example, the defi nition of “deposit” in the law provides the same treatment for deposits in conventional banks and Islamic financial institutions, which disadvantages these institutions in terms of taxes and statutory requirements.

On the other hand there is an initiative by the Securities and Exchange Commission of Sri Lanka to enact a law on securitization to facilitate the issuance of asset-backed securities through the creation of special purpose vehicles (SPVs) and for the regulation and supervision of securitized transactions.

One of the key principles of Islamic fi nance is that almost all the financial transactions should be backed by real assets. The proposed law can lead to the promotion of Sukuk in Sri Lanka.

According to offi cials, infrastructure development in the country can be financed via Sukuk, with Middle East and other foreign investors possibly interested in participating.

Today’s Challenges to regulators:

• Regulatory/law: Existing banking regulations in most countries (including Sri Lanka) are based on the conventional banking model, meaning the need for separate consideration for Islamic banks and financial institutions.
• Accounting, transparency and surveillance.
• An Islamic financial system needs sound accounting procedures and standards.
• Western accounting procedures are inadequate because of the differing nature and treatment of financial instruments.
• Well-defined procedures and standards are crucial for information disclosure, building investors’ confidence, and surveillance.
• Shariah compliance.
• Emerging fi nancial markets are trending towards Islamic banking.

Conclusion

The increasing acceptance of Islamic banking and fi nance in Sri Lanka is apparent. There are now eight institutions in the market and fi ve educational institutions offering Islamic fi nance courses as well as workshops to generate awareness among Sri Lankans. So, in order to nurture this industry in Sri Lanka, it is critical for us to fi rst understand the principles and advantages of Islamic finance.

Muath Mubarak works for First Global Group, a Sri Lanka-based conglomerate of companies involved in the Islamic fi nancial industry. He can be contacted at muath2015@gmail.com

This was published by Red Money Group in IFN on 27-Nov-2009

Islamic Wealth Management — A Paradigm Shift in Islamic Finance By Muath Mubarak

Islamic fi nance is growing fast across nations including non- Muslim countries, irrespective of the recent drawbacks in the global economy. Today, Islamic wealth management is attracting more attention from Islamic banks and Islamic financial institutions (IFI) while demanding and influencing the global fi nancial market. It was initially thought that this is a very niche market but this growth can be fuelled by harmonizing the accounting, auditing, Shariah and legal processes and procedures with a global perspective. Islamic wealth management is therefore a vast area in the context of Islamic principles.

The focus of the wealth management agent is to capture the market segment of ultra high net worth individuals (UHNWI) and high net worth individuals/investors (HNWI) mainly from oil-rich countries and other wealthy countries.

However, Islamic fi nance has a totally different view unlike the conventional treatment for it. Asset and wealth management is a vital tool for both conventional and Islamic financial institutions today. Most of the wealthy’s liquid cash are parked in Swiss banks as they have more than 100 years of private banking expertise. But the guidance for wealth management was laid down over 1400 years ago, and Islam strongly emphasizes that Islamic wealth management is not a subject to discuss only when the liquidity cycle is in peak. Rather, it is encouraging in all climates with its unique demarcations in terms of Shariah.

Shariah does not have a narrow view of wealth management, contrary to what conventional bankers might think. It covers a rather wide area that includes inheritance, management of savings/investments, real estate planning and Zakat-related matters. Islam prohibits possession of wealth which is involved with interest,  gambling, speculation, unethical and other prohibited activities.

Islamic wealth management differs from the conventional equivalent. One of the main differences is ownership. The world view is if anyone owns a property or an asset of wealth, the item belongs to him. But Islam says that the almighty Allah is the real possessor and ultimate owner, and that wealth has been given to humankind only on trust. In other words, wealthy people are just custodians or trustees of wealth in this temporal world. Islamic banks play a vital role in creating, protecting and managing the wealth of the public sector as well as for individuals. The market demand is increasing significantly from Muslim and non-Muslim HNWI. In order to meet market demand, wealth management institutes and advisors must have a clear stand on Shariah rulings to offer unparalleled quality in customer service without compromising Islamic values and principles. The demand from non-Muslims shows there is thirst for different asset classes and developing interest in ethical products, while spreading the risk among different market segments to earn better returns.

Unlike the current practice of providing yet another service that mimics the same features of the conventional equivalent, Islamic asset and wealth management should serve humankind in a broader perspectivewithin the boundaries of Shariah. This is not an easy product to sell; rather it requires lots of expertise with in-depth Shariah knowledge. Without expertise on Islamic wealth management, it would not be welcomed by Muslims, especially those who are more cash-liquid and have more wealth in the GCC.

The hard work of forefathers pays rich dividends to the current generation of UHNWI and HNWI. Wealth management requires valuable time, professional skills and expertise that many individuals and families do not possess. So, Islamic wealth management advisors should be competent enough and have the required skills to multiply this wealth. IFIs must develop a long-term and close relationship with UHNWI and HNWI in order to support them and facilitate the growth of their wealth, in order to pass it on to their offspring in a Shariah

compliant and professional way, without conflict.

Wealth creation can be executed through modern dynamic tools such as capitalizing on funds, trusts, shares and so on. These dynamic Islamic finance tools are mostly welcomed and it should not distract from the main core of Islamic wealth management — the creation and fair distribution of wealth among humankind. Apart from its professional advisory role, IFI’s role of wealth creation can be made available through profit and loss via trade models. Islamic finance facilitates not only the creation, possession and management of wealth, but also methods to purify that wealth by way of distribution. This can be purified by giving Zakat annually, which requires a separate discussion.

The growth of Islamic fi nance proves its clear cut benefits to society like the burden and harm that can come from interest-based transactions. Furthermore, in today’s context Islamic finance is giving birth to new IFIs, along with various governments’ positive moves to nurture and attract Islamic fi nance to become an integral part of the world’s complex economic system.

From a distance, there is a concern that Muslims and Muslim countries are not properly managing their wealth. This includes high profile family- owned businesses which are affected due to various reasons, this leads to the downfall of its associates. The main culprit is the lack of knowledge in the actual subject. This can perhaps be mitigated through learning and delving into the real Islamic wealth management arena. Finally, the growing number of asset and wealth management players shows how the fi eld is developing a strong footing, and is poised to enjoy a vibrant future. However, great effort is yet to be made in setting up and providing professional services to this community with competent skills, excellent branding, advanced IT tools and technical expertise including Shariah.

Muath Mubarak

Coordinator, fi nancial control & strategic planning

Barwa Bank, Qatar

Email: muath2015@gmail.com

Muath began his career at First Global Group, a corporate conglomerate based in Sri Lanka.

This was published by Red Money Group in IFN on 23-Jun-2010

Islamic Banking in Qatar By Muath Mubarak

Qatar is one of the key players and most exciting countries in the GCC with its expanding economy as an oil- and natural gas-rich nation. It has initiated multi-billion-dollar projects in line with the four development pillars — human development, society, economic development and the environment — aimed at achieving  developed nation status by 2030 without compromising on its Islamic principles and Arab identity.

The Islamic banking industry remains steady with healthy growth and a positive outlook even after the recession while challenging the conventional sector in terms of a dynamic, fast-paced and competitive environment. Demand for it is driven by multiple factors, based on Islamic principles and its potential to augment fi nancial engineering blended with a socially and ethically responsive fi nancial system. Despite being a relatively new concept for most of the countries with religious sentiments, Islamic fi nance has been spreading fast and gaining momentum in almost all the countries, sparked by the success of the Asian and Middle East countries and by the understanding of the advantages it provides.

A total of 18 banks, including new entrant Barwa Bank, a full-fl edged Islamic bank, currently operate in Qatar with 210 branches as of 2008. They comprise local and foreign banks supervised by the Qatar Central

Bank (QCB) which was incorporated in 1993 when it took over the responsibilities of the former Qatar Monetary Agency.

The QCB performs certain functions to ensure the liquidity and solvency of the banking system in Qatar. It grants loans to banks, issues instructions, stipulates auditing rules, and conducts inspections of any bank at any time, among others. The QCB has introduced major international standards applicable to banking supervision and regulations based on the Basel Accord. It has set the minimum capital adequacy regulations applicable to Qatari banks at 10%, compared to the Basel rate of 8%.

A major change took place in the Qatar banking sector in February 2001 when the QCB removed its ceiling on interest rates for local currency deposits, thereby freeing the banking system from all interest rate policy restrictions. This opened new ways of dealing without interest involvement which is prohibited in Islam.

This amendment allowed Islamic banks to enter into the untapped market segments in the country. Qatar National Bank and Commercial Bank set the industry trend to adopt the Islamic banking window model in the country during 2005-2006. It led to the setting up of four full-fl edged Islamic banks and 25 Islamic banking window model branches.

According to reputed credit rating agencies, Qatar’s strong operating environment and high level of prosperity will bring about more quality opportunities for banks. These agencies have rated most of the banks as having a high level of creditworthiness and stable outlook over the short and long terms.

The total assets of Islamic banks increased by QAR21.7 billion (US$6 billion) to QAR63.1 billion (US$17.3 billion) in 2008 for a 52.3% growth rate while the conventional banks’ total asset growth rate was at 38.3%. Customer deposits growth also shows that Islamic banks’ unrestricted investments accounts grew faster than that of customer deposits in conventional banks. This clearly shows the amazing growth of the industry in Qatar, and it is expected to expand further based on the Qatar National Vision 2030 program.

The growth of the industry is facilitating the emergence of more Shariah compliant businesses while the conventional sector making greater efforts to increase its market share. As the trend-setting market leaders, Islamic banks should continuously adopt innovative ideas and unique ways of doing business in terms of marketing the Islamic banking asset side as well as liability side products on the basis of long term objectives.

The potential for Islamic banks in Qatar is tremendous with the increase in demand in the housing sector, real estate investment products as well as debt and capital market instruments (Sukuk) for projects. Increasing religious consciousness and demand for alternative Islamic banking products are also expected to spur the further growth of the industry.

Muath Mubarak

Coordinator, fi nancial control and strategic planning

Barwa Bank

Qatar

Tel: +9746844847

E-mail: muath2015@gmail.com

Qatar - More clarity unveiled: Comments by Muath Mubarak

Still reeling from the news of Qatar Central Bank’s (QCB) directive to shut down Islamic banking windows in the country by year end, bankers are both optimistic and pessimistic about the exercise. QCB’s shocking decision is to separate Islamic banking windows from conventional banks without issuing additional banking licences. This translates into conventional banks with Islamic windows being forced to wind up their Shariah compliant business without the option of establishing an Islamic banking subsidiary.

Practitioners, while grappling with the gravity and reasoning behind the abrupt decision, have hailed it generally as encouraging. Muath Mubarak, Qatar based banking practitioner considered it as a positive move for the Islamic banking industry as it will have clear demarcations between conventional and Islamic banks and brings more transparency and improved governance. The comingling of funds between conventional and Islamic has been cited as the major reason behind this decision. Referring to QCB’s motivation to maintain focused business growth, be it Islamic or conventional, Muath highlighted that the steady growth and increasing demand for Islamic banking products along with the push for standardization and governance of banking practices may have played their part in the decision.

The comingling of funds has also raised concerns among practitioners, as Muath explained that this could give rise to the exploitation of large combined balance sheets by conventional fi nanciers to go for bigger Islamic transactions. He further added that this also creates monitoring and supervisory issues on both the banker’s and regulator’s side. On the conventional banker’s side, Salah Jassim Murad, CEO of Ahli Bank, said that QCB’s decision will reduce the number of players in an already saturated market. The gain of Islamic banks will be at the expense of the loss of revenue streams from the Islamic windows of conventional banks. Salah

said as a regulator, QCB has no obligation to compensate for loss of revenue, if any. The conventional banks will have to adapt quickly to make up for any losses.

In terms of existing long-term Islamic fi nancing contracts, Salah commented that the decision gives banks the option whether to run with the term fi nancing until their maturities or sell. He said that the affected banks are currently examining all options including partial conversion of existing contracts into conventional terms. Also on the asset side, he added that the banks can transfer their Shariah compliant investments to the conventional book. While the affected banks still mull over the details and course of action for the disposal of Shariah compliant business arms, Muath said in the long run, this decision is expected to leave a positive mark on Islamic finance in the region

This was published by Red Money in IFN on 16-Feb-2011

Dawn in Tajikistan By Muath Mubarak

In 1991, Tajikistan became an independent country following the break up of the Soviet Union and the post-Soviet Union era has prompted Tajikistan (and most of the regional countries) to consider restructuring their political and economic system with a long-term strategic framework. Tajikistan, considered as one of the world’s most beautiful countries, is land-locked, with 93% of it being mountainous.

The leaders of the regional countries have made signifi cant efforts in infusing Islamic principles and elements of it into the root of government structure since the 1990s. Tajikistan became a member of the Islamic Development Bank (IDB) in 1996. By introducing some projects in the region, IDB brought in the Islamic fi nance system. Many potential global market leaders are studying the feasibility of entering the country with different strategies. Some banks and Islamic fi nancial institutions (IFIs) have expressed interest in exploring the market opportunities. Some others have already entered the market in different ways. The Islamic Infrastructure Fund, targeted at US$500 million, intends making Shariah compliant equity investments in the 12 countries that are borrowing members of IDB as well as the Asian Development Bank (ADB), including Tajikistan.

However, Tajikistan is still in the early stages whereas other Muslim and non-Muslim countries, both developed and developing, are eagerly accommodating this fast-growing industry. Tajikistan faces signifi cant challenges as its economy requires a far wider and more comprehensive approach in addressing issues in

socio-economic development, such as alleviating poverty and powering overall economic growth.

In developing the nation under a real economic structure using Islamic finance principles, some important factors need to be considered: 

Assistance/sponsorship

Even though some initiatives have been taken by international financial institutions such as the IDB and local institutions to develop socio economic infrastructures, there is a need to take some additional measures. This is where IFIs can play an effective role in providing fi nancing for construction projects, industrial development and even an Islamic micro finance system for small scale private enterprises.

Professional education and training

IFIs must educate offi cials, business people and the masses by conducting workshops, seminars, round table discussions and training programs to bring about an understanding of the real differencesbetween the conventional and Islamic fi nancial systems as well as the advantages of using Islamic fi nance in developing a long-term strategic framework.

Legislative changes

There is a need to amend the necessary laws and regulations in order to accommodate the Islamic banking system in Tajikistan and ensure its viability in an increasingly interconnected world after the negative influence of the global financial crisis on the country’s economy. Such a move will attract foreign Islamic banks to the country and create a healthy competition that will further the Islamic finance industry.

New strategies

Tajikistan must work out new strategies to attract new investors and institutions which can use Shariah compliant banking to exploit investment opportunities. To draw up new strategies, however, requires talented human capital with experience in modern multi-faceted business segments along with in-depth Shariah knowledge, which is currently lacking in Tajikistan.

Finally, Tajikistan has been described as the poorest among the Commonwealth of Independent State countries and its revenue inflow is heavily dependent on cotton and aluminum exports as well as remittances by migrant workers abroad. The economy of Tajikistan seems to be highly vulnerable to external shocks.

The government could also benefi t from Islamic fi nance, for example by issuing Sukuk to raise funds for development and infrastructure financing. Underserved and untapped markets can be opened up through Shariah compliant projects and institutions, spurring the development of the much-needed socio-economic infrastructure in Tajikistan. The establishment of a full-fl edged Islamic bank or window should be seriously pursued and, given the large number of global players in the market, this could be realized in the very near future.

Muath Mubarak

Coordinator, Financial Control & Strategic Planning

Barwa Bank, Qatar

Tel: +9746844847

Email: muath2015@gmail.com

This article was published by Red money in IFN on 17-Mar-2010

Beyond Traditional Accounting By Muath Mubarak

Islamic fi nance began as a tiny component in the world’s financial market and has now grown into a strong and steady financial alternative for all who want to escape from the burden of Riba (interest). Having weathered the recent economic crisis, many Muslim and non-Muslim investors now look at Islamic fi nance positively, as an attractive pathway to achieve the optimum balance between yield and liquidity within the boundary of Shariah. As such, the Islamic finance industry is gaining wider market share and entering into a new territory day by day. Some countries are even contemplating becoming a hub for Islamic finance, as they now consider it a golden opportunity to build their own economies.

“...Never get bored with recording it, however small or large, up to its maturity date, for this is seen by Allah closer to justice, more supportive to testimony, and more resolving to doubt...” (Al Quran)

The above verse emphasizes the recording of all fi nancial transactions not only for individuals, rather for all institutions too. There are several Quranic verses which are related to accounting, even on the method of dealing with debtors and creditors, which appeared 1400 years ago. Accounting itself can be described in simple terms as the science of recording, measuring and reporting of economic events or activities for interested parties (internal or external).

Over a period of time, radical changes in the business environment and more complex business transactions have led international bodies to develop various standards. These standards will improve the comparability and understandability of financial statements as it will facilitate the ease of interpretation and comparison of financial accounts from different jurisdictions. It will also facilitate the credibility of fi nancial institutions.

But Islamic fi nancial institutions (IFIs) cannot adopt International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) as their sole accounting standards to follow and implement since these standards have been developed based on conventional fi nancial products which involves Riba (interest), Gharar (uncertainty), Maysir (speculation) and other prohibited activities such as dealing or investing in alcohol, pork, pornography linked business and transactions. Moreover, the term ‘bottom line’ in a conventional financial institution is to maximize fi nancial returns and minimize loss. 

In contrast, IFIs aim to maximize the performance of the underlying asset or project of the Islamic contract in order to ‘share’ the profit  and loss between equity holders and investors. There was an era where IFIs were compelled to prepare two sets of accounts. One was to satisfy country’s law (regulatory requirement) and the other one was as per Shariah principles. This requisite has been replaced with the existence of Accounting &

Auditing Organization for Islamic Financial Institutions (AAOIFI) standards for accounting, auditing, Shariah, governance and ethics for IFIs.

Currently AAOIFI standards are mandatory in more than 10 jurisdictions, and it also has been adopted as guidelines or basis for national standards in some other jurisdictions. This clearly indicates the increasing acceptance and recognition by countries of global standard setting bodies.

IFIs require separate accounting standards because theirs are different in the following manner:

• Islamic banking is trade based while conventional banking is based on the loan contract
• The main Islamic income base is profi t and conventional income is based on interest
• Determines the rights and obligations of all interested parties in accordance with the principles of Shariah
• Reports useful information to users, thus enabling them to make legitimate decisions in their dealings with Islamic banks
• Additional ethical dimensions
• Honesty and transparency (not merely based on business ethics rather based on the religion)
• Adopt social responsible business policies and practices as per Islam
• Separate reporting required on Shariah compliance from Shariah supervisory boards

Although Islamic finance has proven to be ground breaking, with worldwide impact, there are issues and critical challenges to be sought which go beyond traditional accounting. For example, there is a dearth of Shariah scholars with in-depth knowledge of fi nancial products, technology, banking and fi nance. In order to prove that Islamic fi nance is a solutions provider for economic ills, some we have recently experienced during the global financial crisis, the entire industry should look beyond accounting and recording for solutions. But, from a global fi nancial market perspective, integration with the global norms, standards, and best practices of conventional fi nance can still be Shariah compliant to follow and adopt.

Muath Mubarak

Coordinator - Financial Control & Strategic Planning

Barwa Bank, Qatar

Email: muath2015@gmail.com

Muath lectures on various Islamic banking and fi nance topics at First

Global Knowledge Centre, Colombo, Sri Lanka.

This article was published by Red Money in IFN on 4-Aug-2010

A Glimpse into Islamic Banking Software Systems By Muath Mubarak

The evolution and development of Information Systems (IS) in the banking sector can be traced back to the 1800s, from the introduction of the telegraphic system in the US. Today, sophisticated systems and state of the art technology are widely used in the banking sector, and multi-channel banking makes it much easier and less rushed for us all.

The emerging and niche Islamic fi nance market has to stay highly technology driven in order to maintain a competitive edge over others and deliver fast and quality customer service within Shariah parameters. There are more than 300 Islamic Financial Institutions (IFIs) globally managing more than US$1 trillion, a fi gure expected to reach US$4 trillion by 2012. Industry experts maintain that the industry is growing at a rate of 10% to 15% per annum across borders even in non- Muslims countries.

IFIs must create a robust IT platform of solutions to deliver technology driven innovative products and  services to their clientele. There are more than 35 global and regional vendors that offer Islamic Banking System (IBS) services for Islamic banks & IFIs. Efforts to computerize the IT system in accordance with Shariah tends to be developed inhouse in the initial stages, directly under the supervision of Shariah scholars and Islamic banking experts.

Alternatively, global vendors can build a competitive edge by getting their software endorsed by independent Islamic fi nance institutionsnamely Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and such. Islamic banking IT solutions can be resolved either by implementing a new system or installing only the relevant functional system or modules from existing core banking systems.

This system implementation is a pivotal transition which comes with some major risks. To date, a number of banks have gone through this transition since there is no complete ‘off the shelf’ product. It will not be an easy task to implement the system successfully without an excellent project management process, and without a team inclusive of technical experts, Shariah scholars and banking specialists, consultants and such.

The IT team especially cannot enjoy the liberty of implementing IT systems like in conventional banks. In IBS each and every matter has to go through a Shariah Supervisory Board (SSB) to obtain the necessary approvals. Furthermore, Islamic banking systems require more information disclosure. This transition or system implementation in an Islamic bank will easily consume a minimum of six months and above depending on the complexity of the implementation project.

Constant growth in the number of IFIs and Islamic banks require that IT systems are in place to compete with both new entrants and existing market players, whether conventional or Islamic. Advanced technology will reduce cost signifi cantly, as well as manual workload, inefficiencies, transaction processing time and so on while enhancing customer satisfaction with sophisticated facilities.

This Shariah compliant system involves an out-of-the-box implementation which disturbs the existing IT system by requiring various customizations to the traditional core banking solution. Sometimes this layer sits on top of this Islamic fi nance functional application layer or else integration will not support other applications.

Hence there may be a need for another middle ware. Flexibility, timing and affordability become a question mark at this point.

The acquisition of ready-made, plug and play modern components can be integrated smoothly either by interfacing directly to the corebanking software (or through an establishment of middle ware). Today, Information System Strategy is at the heart of the banking sector and it will determine the success of the business. 

Core issues

Conventional core banking software have been developed based on interest which is fi xed and defi ned calculation methods. Once the formula is fi xed the interest rates will be credited into the relevant accounts as per the command. But in the case of IFIs and IBs, the profi t is unknown until the maturity date of the business

contract / investment made. In addition, the sharing of profi t can be vary according to Mudarib — Rab al Mal sharing percentages, types of accounts, tenor period, risk ratios, utilization percentages and profit equalization ratios. This may vary in different jurisdictions and between banks too.

Since profit distribution is one of the main differences between Islamic banks and conventional banks, profi t distribution methodology should be thoroughly tested from Shariah to Accounting. IFIs require much matured profi t distribution system, despite the increase in the number of global core banking system vendors incorporating the Islamic banking support to their product offerings.

From a technical point of view, Islamic banking IT solutions and software must be fl exible, user friendly, accessible, scalable, compatible (able to run in different platforms and operating systems), highly secure with preventive features and have automated implementation with modern and reliable database technology. With the latest developments in technology, Islamic banking software should be able to swiftly migrate or adapt to the advanced technology as and when necessary while constantly taking into consideration global best practices and processes. The system can be developed and installed as a browser platform / web based system or MS platform / desktop platform with advance programming languages. Even now the interest has been shifting to open source system for implementation.

Many software systems for the banks were developed with heavy development costs, after a number of years of research and development with equal amounts of testing. The Islamic fi nance industry is seeing everyday a new IFI. New start-up institutions will find it difficult to afford this strategic investment at the initial stages in

order to build a robust IT platform with rich functionality.

On the other hand, the Islamic fi nance industry requires trained professionals with in-depth knowledge about Islamic fi nance and field expertise in this emerging sector in order to provide quality, uninterrupted service to clients. Another important area to focus on is IBS training to bank staff, as well as translating the Islamic banking concepts, workfl ows and consequences to the technical experts so that they can develop and strategically fi t a system to the IBs business strategy requirements. Finally, customization of conventional banking software have been overshadowed by the demand from IBs for IT platforms to develop their own competitive edge over others. Many software systems were developed for conventional banks. When Islamic banks request for a software system, conventional ones are generally customized to suit some of the IB’s needs. Many are either customized to suit the IB’s requirements, or come with worked solutions to expel in-built conventional parameters, including terminology and such.

Still, the Islamic finance industry is yet to see a fully fl edged standalone Islamic banking software solution with advanced technology and functionality.

Muath Mubarak

Coordinator, Financial Control & Strategic Planning

Barwa Bank, Qatar

Email: muath2015@gmail.com

This article was published by Red money in IFN on 12-May 2010

NURTURING ISLAMIC FINANCE IN SRI LANKA by Muath Mubarak

– A post war view of the Sri Lankan economy and the role of Islamic Finance in it-

Hungary hungry for IF

Hungary's first Islamic bank is on its way, says Istvan Kaknics-Ujhelyi, director of Hungary's Al-Gharnati Foundation and advisor to the mayor of the northern city of Eger. Hosszu Ferenc Ali Hasszan, a Hungarian currently undergoing Islamic banking training in Malaysia, told The Islamic Globe that Hungary is working towards opening its first fully functional Shari'ah compliant bank, called Magyar Iszlam Bank in the coming years.

"But we cannot do it alone," said Hasszan and called for assistance from transnational bodies, such as the Islamic Development Bank as well as established commercial Islamic banks.

Islamic finance is becoming a hot topic in Hungary and last month the country's Foreign Ministry along with government agencies and the Al-Gharnati Foundation organized a conference in Eger. Representatives from the IDB and from Egypt's Faisal Islamic Bank were in attendance.

Hungary has not always had a close or warm relationship with Islam and although the country has long had a Muslim influence - since the sixteenth century when it was partially occupied by the Ottoman Turkish Empire - Islam came to Hungary at the point of a sword. Less than 1% of Hungarians identify themselves as Muslims in the latest census in 2001. Eger sat on the front line between Christian Europe and the Muslim Ottoman Empire and was as far as the Turkish invasion of Central Europe reached. However, in the 21 century, Eger is acting as another frontline between Islam and Christian Europe, and inviting the Turks back - but asking them to bring their checkbooks with them. In attendance at the conference was Ufuk Uyan, general manager of Turkey's Kuveyt Turk, who took the opportunity to remind attendees of the resilience of Islamic banking to withstand recent economic crises.

Kaknics-Ujhelyi explained to The Islamic Globe that Hungary was keen to open up to Islamic finance because of  the debt crisis that engulfed the country in the global economic slowdown. As a result Hungary accepted a $25bn rescue package from the IMF, World Bank and the EU in 2008. The country hopes that by inviting new investors from the Gulf (notably Kuveyt Turk is 62% owned by Kuwait Finance House) and Malaysia to Hungary new capital will be injected into the economy.

Kaknics-Ujhelyi also stated that he hopes that Hungary can position itself as the Islamic banking center of Central and Eastern Europe and he will be setting up the Middle East and Asian Research Studies Institute as well as the Ethical Economic and Financial Studies Centre. The latter will focus on the implementation of Islamic economics and Islamic finance in Hungary.

© The Islamic Globe 2011

Efforts to build local expertise in Islamic Finance

Amana Global, a fully owned subsidiary of Amana Takaful PLC has signed an MOU with a Malaysian Finance institute to build capacity in the local Islamic Finance Industry.

The Malaysian partner is the Islamic Banking and Finance Institute of Malaysia.

The Company says the move will help build industry specific knowledge in the field of Islamic Finance in Sri Lanka.

“At present there is a dearth of professional services available to satisfy the demand” added a statement issued by the Company.

Initially the aim of the program would be to offer short term courses for public audiences and corporate entities on the subject of Islamic Finance.

Fawas Farook, General Manager of Amana Global Limited speaking about the initiative said  “We have also sought a facilitator to make this partnership work and thus brought in First International Consultancy (Malaysia), which possesses a wealth of experience in propagating Islamic Finance learning”.

Amana Global is a BOI approved venture, established to provide advisory services in the field of Islamic finance both locally and internationally.

http://www.news360.lk

Nigeria: Islamic Bank is Highly Profitable

Sheikh Ziyaad Mohamed is a Shariah Adviser and Islamic Finance Consultant. He is certified and trained in Islamic Jurisprudence, Quranic Science, Arabic and Islamic Traditions by scholars in South Africa, Syria, Eqypt and Jordan. In this interview with Daily Trust, he said Islamic banking will help in transforming Nigeria's economy and that it is beneficial to all people irrespective of their religious belief. He advises CBN to provide more information to educate the masses.

Why do you think the proposed Islamic banking is generating controversy in Nigeria?

Certain countries seem to be more sensitive to the introduction of Islamic banking primarily due to the religious connotations and misunderstanding of its principles.

The reality is that Islamic banking has already been embraced by many other countries with secular, Christian and Islamic systems. There has perhaps been a realization in those countries that the philosophy makes sense. It is profitable for all those involved, it promotes a high ethical standard, it is highly transparent and has a significant sense of disclosure. Even the United States and United Kingdom have introduced Islamic Banking.

The UK for example, has a minority Muslim population (+-4%), yet they have amended regulation to cater for Islamic banking. South Africa also has a minority Muslim population (+-2%) that has had Islamic banking since 1989. They have also amended regulation to allow for the successful functioning of Islamic banking.

Even Japan, who is a member of Islamic Financial Service Body of Malaysia (IFSB), has begun the introduction of Islamic banking. China is also introducing Islamic banking. Countries across Europe, Africa and Asia, notwithstanding the significant presence of Islamic banking in the Middle East, have begun embracing the Islamic finance and investment philosophy.

Some of the reasons that Nigerians are so concerned about introducing Islamic banking are perhaps due to mis-communication, misunderstanding and fear of the unknown. However, the underlying philosophy is open to all religions and stands to benefit anyone who wishes to participate in ethical banking.

What is Islamic banking?

Islamic banking is about ethical business transactions. It is about removing the moral hazard. It is about removing the practice of interest which is not something only unique to Islam. Other monotheistic religions including Christianity also do not accept usury. Islam is not the only religion that denies or prohibits usury; it is perhaps because the rules of prohibition are quite prescriptive and structured that it has achieved world prominence in a short space of time.

Islamic or non-interest finance focuses on the existence of a real, tangible asset. The rental of money (interest), the trade of a currency for anything except at par, is not permissible as it is seen as exploitation to some of the parties in the transaction.

The rules of Islamic economics can be applied easily as the legal maxim considers everything permissible in business transactions except what is specifically prohibited. These prohibitions include interest, uncertainty without due consideration (calculated risk), gambling, unfairness and injustice and the purchase and sale of unlawful products and services. These prohibitions are practical, moral and beneficial to all parties concerned. These restrictions are universal morals where most are accepted in all religions.

In Malaysia, you have two separate methods of finance. Conventional finance exists alongside Islamic finance, co-existing in harmony.

Islamic and conventional banking are existing and even working together in many instances around the world.

The implementation of Islamic banking is for the benefit of the entire community as it strives to promote socio-economic empowerment and upliftment through ethical means that restrict the use of the interest, etc.

Why is it as if Islam is coming out with something new? Muslims have a right to practice what they believe in as anyone does. Even so, Islamic banking can be practiced by anyone. It is open to everyone: Christian, Muslim, Atheist, anyone. It needs not be called Islamic banking, it can be called ethical banking or non-interest banking. Therefore, I personally feel that the suspicion around the introduction of Islamic banking can be resolved through basic knowledge on what it stands for.

Since Islamic banking is a non-interest banking, how do you make profit without charging interest?

The concept of interest is simply rent on money. Islamic economics, a 1,400 year-old system, is saying that the objective should not be rent on money. The focus should be the sale and rent of assets. If you own an asset you can rent it and make a profit from it. If you want to finance an asset, why not buy the asset and sell it and make profit. The profit is what is actually received by an Islamic bank that is then distributed to shareholders and depositors as dividends or profit. Islamic banks can therefore be highly profitable.

Interest has become the core of modern economics. The problem is that we have been programmed into believing that interest is the only way for an economy to progress and when we hear alternative philosophies, we think there is something dubious about it.

Most of us have lived a life of interest; we have taken and charged interest and we have implemented an interest rate but it was realized in 2009 that the entire world economy can collapse on the basis of interest and the sale of non-existent assets backed by securites (CD's, etc.). The evidence is public knowledge.

Why was it that Islamic banking did not suffer the worst of the crisis whilst conventional banks were collapsing?

It is because of an over reliance on interest and an over reliance on highly risky, toxic financial methods. Islamic financing does not allow that. Isn't that beneficial to the community and the country as a whole? Whether you call it Islamic or not is not the issue, adopt the philosophy, it makes sense.

Are you saying Islamic banking is based on certainty?

Therefore, we can say that transactions that are speculative in nature like the purchase of company shares due to a hunch or hot tip, property speculation and even the purchase and sale of assets that do not exist are all prohibited. One can remove as much uncertainty in a transaction as is possible.

It is based on calculated risk. There is nothing that is certain in life except death. However, the nature of transactions in conventional banking are focused upon the repayment and the interest on the principle, ignoring the real asset.

How?

Avoid any transaction that is highly risky. Avoid gambling and do not invest in derivative instruments because they would fall under the gambling definition. The financial crisis of 2009 has shown us that derivative instruments for example, have extremely levels of risk ultimately being the primary contributor to the collapse of world markets.

Why would anyone not want to adopt a philosophy that in fact moves nations out of poverty?

How does risk sharing in Islamic finance operate?

Islamic economics identifies inherent risk in equity transactions. The legal maxim clarifies that the one who takes the risk has the right to share in the reward. Islamic economics is simply saying that guaranteed returns via fixed interest rates place parties at a disadvantage, even the banks. The objective is for fairness in the transaction. If the investment returns a profit, the partners should be entitled to it according to a pre-agreed profit-sharing ratio. However, if there is a loss, both should share in the loss as well. This is both more equitable and more sustainable in the long-run.

How does the Islamic bond, the Sukuk, differ from the conventional bond?

The conventional bond is based on a coupon rate that provides you with a guaranteed return of interest but Sukuk is based on a return that is derived from investment in an asset. The returns that are derived are now distributed to the shareholders. It is based either on equity transactions, rental transactions, manufacturing or even a hybrid. However, the risk levels are comparable to bonds as they can be underwritten by governments and rating houses, providing credibility and assurance of repayment.

What advice would you give to the Nigeria government which is in the process of introducing Islamic financial system?

will say they are not the first to introduce it. Many countries around the world have introduced Islamic banking. They can learn from them and avoid the many errors that others have made.

Secondly, communication to the masses is the most critical aspect in the acceptance of Islamic financing. There would naturally be skepticism and fear in introducing any new system. Communication at all levels; at school level; at university level; at academic level; at banking level is very important.

The initial driver would probably have to be the Central Bank. Communication is critical to the understanding of Islamic banking. Islamic banking has no intention of Islamizing any economy but instead it is focused upon providing financing and return on investment through ethical methods, ultimately attempting to remove poverty and uplift the economy as a whole.

http://allafrica.com