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Monday, 29 July 2013

Sanusi: Islamic Finance, Key to Nigeria's Infrastructural Development

The Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has stated that the Islamic Banking System, which was introduced to Nigeria, is vital to the country's infrastructural development.
Sanusi, who was represented by his Personal Assistant on Islamic Banking, Dr. Bashir Aliyu Umar, stated this in Abuja during the international conference on Islamic Finance organised by The Metropolitan Skills Limited, Abuja, with endorsement by CBN and related agencies.
He said the Islamic Finance asset-backed and asset-based financing instruments to fund infrastructural needs would go a long way in promoting financial inclusion, enhancing the productive capacity of the nation and by extension, contribute to its economic development.
The CBN Governor also noted that the theme of the conference ‘Infrastructure Development through Alternative Funding(Islamic Finance) in Africa’, was appropriate and timely because of the current low level of infrastructural development experienced in most African countries as well as dwindling sources of finance especially in the aftermath of the global financial crises.
He also revealed that a good approach to funding of infrastructure in Africa is through the Public-Private Partnership (PPP) explaining that the current administration in Nigeria has already embraced the method.
Sanusi said: “There is no gainsaying that the financial resource required to fund infrastructural development is huge, and government and the banking system might not be able to provide the needed funding alone; considering the gestation of the projects as well as the risk of crowding out the private sector.
“A very good approach to funding of infrastructure in Africa is through the PPP, which the current administration in Nigeria has already embraced. This provides a window under Islamic finance asset-backed and asset-based financing instruments to fund infrastructural needs, which will go a long way in promoting financial inclusion”, he added.
Also, MSC Coordinator Islamic Finance, Faculty of Islamic Studies, Qatar, Prof. Monzer Kahf, who was one of the guest speakers, described Islamic Finance as a depository institution of financial intermediary specialised in providing finance on sale, lease or sharing bases which is committed to the Islamic Shari'ah criteria of financial transactions especially realism, morality as well as prohibition of interest.
Kahf condemned the way the Islamic Banking is being misinterpreted in some quarters, adding that the bank does not put any restrictions on one’s faith or belief, but rather grants an equal opportunity that operates under the principles of fairness, realism and morality.
Earlier, the Chief Executive Officer, Metropolitan Skills Ltd, Ms Ummahani Ahmad Amin, said the subject of Islamic Finance has gained further prominence following the global financial crises and sovereign debt crises, which highlighted a range of fallacies. In the conventional financial systems and underscored the usefulness of Islamic principles for stability and sustainability.
“Islamic economics us becoming more relevant for socio-economic development of countries, regions and the world, which is facing high unemployment, unsustainable growth and above all ethical crises”, Amin added.

(This Day Live / 24 July 2013)

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India: Islamic finance to power Kerala startups

Cheraman Financial Services Ltd, jointly promoted by the Kerala government and non-resident Keralites, is to fund hundreds of cash-strapped student startups coming up in the state.

The financial institution functioning on Islamic principles has set aside Rs150mn for companies in the Startup Village, Kerala’s answer to Silicon Valley, from its Rs2.5bn Alternative Investment Fund that primarily targets the Shariah-compliant service and manufacturing sectors.

There are more than 900 firms – and the number is growing fast - with innovative products started by students waiting to set up their units at India’s first telecom incubator mentored by Infosys co-founder Kris Gopalakrishnan.

“The decision to fund these projects was taken at the recent meeting of our board of directors,” P K Kunhalikutty, state industries minister who is also a director of the company - which recently received Reserve Bank of India (RBI) approval  - said while addressing the Weekend@Startup Village programme here yesterday.

Cheraman, which has also got clearance from the Securities and Exchange Board of India, focuses on new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering.

At least one company of students with innovative ideas is being set up each day at the Startup Village. The Village aims to host 3,000 startups by 2020.

Coming up on the same campus in this port city is the Kerala Technology Innovation Centre, another zone exclusively for bio-technology.

“A new silent revolution is happening in Kerala. Educational institutions are mushrooming and so is a new breed of young and enterprising entrepreneurs,” said the minister who spent a day with youngsters at the Startup Village.

“For these young entrepreneurs, money will not at all be a constraint”.

Chief Minister Oommen Chandy, who delivered his speech via Skype said his government was extending all help to the Startup Village to create a ‘Silicon Valley’ here.
Chandy also announced a funding scheme to regularly send student entrepreneurs to Silicon Valley to gain firsthand experience.

Startup Village chairman Sanjay Vijayakumar said the chief minister used to meet him and his team for 30 to 45 minutes each week to make the project a reality.

Anil Menon, who heads the second global headquarters of Cisco, based in Bangalore, said the world leader in networking has decided to set up a Cisco Lab at the Startup Village to tap its potential. The Lab will start “soon” he added.

Kris Gopalakrishnan disclosed that the 180 startup firms located at Technopark in the state capital Thiruvananthapuram was generating Rs2bn a year and has created 4,500 jobs. The new breed of young entrepreneurs straight from the campuses is making all the difference in Kerala, he added.

“Creating a community of entrepreneurs is much more difficult than building a company. This is going to be a fantastic success, something that’s going to change Kerala,” insisted Gopalakrishnan.

(Gulf Times / 28 July 2013)

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