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Tuesday, 14 August 2012

Emirates Islamic Bank underlines significance of Ramadan with support for various initiatives

Emirates Islamic Bank (EIB) announced that it is one of the sponsors of the sixth Takatof Ramadan Project, launched recently by the Emirates Foundation for Youth Development.

The Ramadan project is in line with the vision of the Takatof initiative (Social Volunteering Programme), which seeks to create an interactive social network among all community segments with the aim of assisting disadvantaged families. 

This year, EIB and other partners will assist the Foundation to provide assistance in kind including, food coupons, blankets, clothes, school bags and other requirements. Other activities under the Takatof Ramadan programme include, repair and maintenance of mosques, visiting the sick and needy and distributing gifts.

"Traditionally, Ramadan is the month of giving and acts of charity and community support are extremely significant during this time," said Faisal Aqil, Deputy CEO, Consumer Wealth Management, Emirates Islamic Bank and Dubai Bank. "In keeping with our role as a leading Islamic finance institution, EIB is supporting various initiatives related to charity and social responsibility, including the Takatof Ramadan project and the Zakat Fund."

Emirates Islamic Bank is also serving as a key sponsor for the Zakat Fund Ramadan Campaign, which aims to emphasise the importance of Zakat during the Holy Month. The Zakat Fund is a federal body that facilitates Zakat, the annual charitable donations by Muslims.

Other Ramadan-focused activities at Emirates Islamic Bank include its support of the Al Ajer initiative and the partnership with Dar Al Ber Society. Al Ajer initiative was launched by Sheikh Majid bin Mohammed's Private Office to encourage people to understand the importance of forgiveness, while through its partnership with Dar Al Ber Society, EIB delivers daily Iftar meals to mosques across the UAE.

( Ame.Info / 14 August 2012)

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UK Muslims Get Access to Shari`ah Finances

Shying away from financial services that do not conform to their faith, British Muslims are now getting a new service to help them manage their finances in line with Islamic Shari`ah.
“Many of the traditional UK financial products involve receipt or payment of interest and as such are considered Haram (unlawful) for Muslims,” Shabab Gulfraz, financial consultant with Ummah Financial Planning, told Yorkshire Post on Tuesday, August 14.
“When looking at their financial arrangements, Muslims need also to consider how their money is invested and what drives the returns they are receiving.”
A new service financial service, called Ummah Financial Planning, has been launched by the accountants and business advisers Garbutt & Elliott in Yorkshire to help Muslims manage their finances in line with Shari`ah.
“There are very few specialist intermediaries in this market,” said Simon Holt, the managing director of Ummah Financial Planning.
“We want Ummah Financial Planning to go national, but initially the business will be based in Yorkshire.
“There are between two and three million Muslims in the UK, and around 25 to 30 percent of them live in West Yorkshire.”
Holt said the idea came after seeing that many Muslims could be steered away from financial services because of the absence of Shari`ah-compliant financial services.
“I worked alongside a Muslim scholar for nearly three years, supporting him in his work to bring more ethical financial products to Muslims in the UK and overseas,” Holt said.
“During this time, I realized that Muslims need specialist financial advice firms to be established which understand the culture, values and beliefs of the faith.
“This is where the idea for Ummah Financial Planning came from.”
Muslim Needs
The new financial service was issued after months of consultations with the Muslim community.
“The Ummah team have spent time consulting with the community to seek their advice on how best to engage with Muslims and brought in a specialist Muslim consultant to lead this work for them,” said Gulfraz, the financial consultant with Ummah Financial Planning.
“Many ISA, PEP, unit trusts and pension funds invest money in a mix of different assets including equities (shares), property, gilts (loans to the Government), corporate bonds (loans to companies) and cash (gilts, corporate bonds and cash are all interest bearing).
“Although these funds are professionally managed by teams of investment managers whose aim is to maximize the returns and create profit; they are often Haram (unlawful) for Muslims as they generate some of their profits from interest or investment into un-Islamic activities,” he said.
Islam forbids Muslims from usury, receiving or paying interest on loans.
Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.
The launch of the new financial service in Britain was timed to coincide with the holy fasting month of Ramadan.
“Throughout this month, Muslims from all countries unite in a period of fasting and spiritual reflection,” Gulfraz said.
“All Muslims will spend time in this month reflecting on their individual faith and practices and reading from the Qur’an, with the aim of improving and strengthening themselves in accordance with the teachings of Islam.
“Ramadan is much more than just not eating and drinking. Muslims are called upon to use this month to re-evaluate their lives in light of Islamic guidance. Towards the end of this blessed month of Ramadan, Muslims are required to pay a fixed portion of their wealth to charity. When calculating the amount to pay, Muslims will take a detailed look at their financial arrangements.”
Britain is home to a Muslim minority of nearly 2.5 million.
Britain is the only country in the European Union to have Islamic banks. It is also developing its takaful market for Islamic insurance.
It also has a strong foothold in developing products such as commodity murabaha – Islam’s version of interbank short-term lending and syndicated loans.

(On Islam / 14 August 2012)

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Islamic forestry fund aims to tap crossover appeal

* Aims to raise $100 mln, sees viability at $30 mln
* Targets 15 pct rate of return, net of fees
* Combines Islamic and green investment themes
SYDNEY, July 18 (Reuters) - Luxembourg-based Sustainable Capital has announced the launch of a sharia-compliant forestry fund, part of a trend toward crossover products that appeal to Islamic investors as well as those interested in green investment.
The firm aims to raise $100 million in the open-ended fund, which starts its offering period next Monday and will invest in the agricultural, biomass and forestry sectors.
Islamic finance adheres to religious principles but the industry has only recently begun to stress the theme of wider social responsibility.
"Sustainability has been a challenging conversation in the Gulf, as it was regarded as a competing asset class. But energy security cannot be built on one source alone," Michael Young, the fund's investment advisor, told Reuters. "Countries are now embracing diversification."
Forestry has had to contend with a preference among many Islamic investors for more familiar real estate and hedge fund products.
In a bid to differentiate itself, Sustainable Capital has highlighted the inflation protection and steady-return qualities of its new fund, which will aim for a 15 percent rate of return net of fees.
It would be reasonable for most long-term investors to allocate 5 percent of their portfolios to green investments, though some preferences may go as high as 10 percent, Young said.
A fund size of $30 million would make the product viable, but reaching its $100 million optimal size could take from "three months to three years", Young added. The ultimate aim is to raise $250 million.
Capital-raising and achieving scale have been a problem for sharia-compliant fund managers, with 64 percent of the estimated 800 Islamic funds globally having less than $75 million in assets, according to consultants Ernst & Young.
This has prompted boutique firms, which often lack developed sales channels or established ties with Islamic financial institutions, to rethink their marketing strategies.
Sustainable Capital plans to use strategic partnerships to tap Gulf, Asian and European markets, in order to extend the firm's distribution capabilities and keep operating costs low.
It will seek at least two distributors in the Gulf, one focusing on Saudi Arabia. The firm sees the bulk of its investor base eventually coming from the Gulf and Asia, Young said.
One reason for the lack of close ties between the Islamic and ethical investor communities is geographical: Islamic investors have strong roots in the Middle East and southeast Asia, while the ethical investment industry has its strongholds in North America and Europe.
Also, green investments have generally been built using a "positive screening" approach, in which funds identify specific sub-sectors and economic processes which they like. Islamic finance has emphasised "negative screens" which forbid investing in areas such as gambling, tobacco and alcohol.
However, with its use of asset-backed deals, Islamic finance also has an ideological emphasis on promoting real economic activity instead of pure monetary speculation. So firms such as Sustainable Capital see commonalities with ethical investment.
In April, London-based Siyam Capital said it planned to launch sharia-compliant philanthropy, social housing and timberland investment products by the end of this year.
In March, a "green sukuk" working group was launched by the Climate Bonds Initiative, the Clean Energy Business Council of the Middle East and North Africa, and The Gulf Bond & Sukuk Association. Its aim is to promote issuance of sukuk to finance climate change investments and renewable energy projects.
By Bernardo Vizcaino
(Reuters / 18 July 2012)

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