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Friday, 2 August 2013

Islamic banking nears its big breakthrough in Africa

“There was a noticeable buzz at an Islamic finance conference I attended recently in Nairobi,” said Saifi. “After years of slow development, there was a palpable sense among the delegates that Islamic banking is heading for its breakthrough in sub-Saharan Africa.
“This is great news, not just for the region’s large Muslim populations, but for anyone keen to see a thriving African banking market based on choice for consumers.
“While Islamic banking assets have grown rapidly around the world to stand at more than USD1.3 trillion at the end of 2012, the industry has remained in its infancy in Africa.
“However – going by recent developments – that could be about to change. By the end of this decade it’s quite possible that banking complying with Shariah law – or non-interest banking – could grow to account for up to 10 per cent of banking assets in five or six sub-Saharan African countries, including Kenya and Nigeria.
“With the first licenses granted in Kenya just 5-6 years ago, that would make Africa’s leap into Islamic banking much faster than markets such as Pakistan and Indonesia, where Islamic financial services have been available for longer.
“Behind the buzz is real demand from African domestic consumers for the choice to bank in accordance with their faith – in common with Muslims in much of Asia and the Middle East. Governments and regulators in Africa no longer view Islamic banking as a niche industry, but actively seek to encourage its development.
“There’s also growing awareness of the significant liquidity pool now available in Islamic finance, particularly across the Middle East, as a source of funding for crucial infrastructure investment.
“Islamic bonds, or Sukuks, are seen by prominent advocates – such as Central Bankers – as a potential financing option for governments. Nigeria’s Securities and Exchange Commission recently permitted the issuance of Sukuk, with the first issuance in the country now imminent.
“Like Nigeria, other Africa countries are keen to follow the lead set by Kenya, which issued its first licenses to Islamic banks 5-6 years ago and in 2010 amended its Banking Act to open the industry further. In just a few years, Islamic banking – has grown to account for around 2 per cent of the market in Kenya where around one in ten citizens is Muslim.
“Nigeria, with a Muslim population of around 80 million people, issued its first license to a non-interest bank, Jaiz Bank, last year and has also permitted conventional banks to open non-interest windows. Similar developments have occurred in countries such as Uganda and Tanzania.
“As I see it, by building on the experience of established Islamic banking markets, such as the Middle East and parts of Asia, sub-Saharan Africa has a great opportunity to leapfrog, developing a healthy Islamic banking eco-system much faster than other regions of the world.

(C.P.I Financial / 01 Aug 2013)

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Islamic Investment Malaysia:

Malaysia: World's Islamic Finance Marketplace

The Prime Minister of Malaysia, YAB Dato' Sri Mohd. Najib Bin Tun Abdul Razak, today introduced Malaysia's Islamic finance marketplace to the world and the new iconic brand identity - "Malaysia: World's Islamic Finance Marketplace", marking a significant milestone in the development of the Islamic finance industry in Malaysia. The Prime Minister also took the opportunity to extend an open invitation to the global financial community to collaborate with and mutually benefit from Malaysia's Islamic finance marketplace that is complete with a comprehensive regulatory, supervisory, Shariah and legal framework.

Malaysia has in place a comprehensive and progressive Islamic Finance Marketplace that has grown significantly over 30 years. Global industry players and market participants can take advantage of the innovation, expertise and deal flows that emanate from Malaysia's Islamic finance marketplace for business deals from anywhere in the world.

The current level of sophistication of Malaysia's Islamic finance marketplace is the result of the concerted efforts of Bank Negara Malaysia and Securities Commission Malaysia, Shariah scholars and the Islamic financial industry community.

Malaysia's marketplace drivers can also leverage on Malaysia's comprehensive marketplace framework to further drive the development of the industry through thought leadership, innovation and increased cross border, multicurrency deal flow for business deals.

Malaysia has consistently emerged as one of the leading destinations in Islamic finance, particularly in the Islamic banking, sukuk and Islamic equities markets. Malaysia has taken the lead in a number of global rankings in the areas of regulation, products and services, infrastructure, ease of doing business, risk management and audit as well as statistics, marketing and education.

The recent inaugural issuance of a Murabahah-based Government Investment Issue (GII) is an important development in the Islamic financial industry. The RM4.0 billion issuance of GII under the widely accepted structure of Murabahah was 2.92 times oversubscribed; the highest bid-to-cover year-to-date, translating into a highly competitive yield.

Malaysia's Islamic finance marketplace is today characterised by a robust regulatory, supervisory, Shariah and legal framework, a deep primary and active secondary sukuk market, an efficient price discovery mechanism, a diverse talent base with global capabilities and an efficient system for multi-currency clearing and settlement. The key components of Malaysia's Islamic finance marketplace include Islamic banking, Islamic capital market, takaful and re-takaful, Islamic money market, professional ancillary services, talent development infrastructure and Islamic fund and wealth management.

To provide a comprehensive view into Malaysia's Islamic finance marketplace,  showcases the Expertise, Innovation and Deal Flows that are emanating from Malaysia's Islamic finance marketplace.

About MIFC : 

The Malaysia International Islamic Financial Centre (MIFC) initiative was launched in 2006 to develop Malaysia as an international marketplace for Islamic finance. Since its inception more than 30 years ago, Islamic finance in Malaysia has progressed and developed into a sophisticated Islamic finance marketplace that is characterised by a robust regulatory and supervisory framework, a deep primary market and active secondary sukuk market, a diverse talent base with global capabilities and connectivity, and product breadth and depth. The Malaysian marketplace also provides an efficient system for multi-currency clearing and settlement.

The MIFC initiative comprises a community network of the country's financial sector regulators, including Bank Negara Malaysia (Central Bank of Malaysia), Securities Commission Malaysia, Labuan Financial Services Authority and Bursa Malaysia (Kuala Lumpur Stock Exchange), Government ministries and agencies together with industry participation from the banking, takaful, re-takaful, capital market institutions, human capital development institutions and professional ancillary services companies which are participating and working collaboratively in Islamic finance. Malaysia welcomes industry practitioners to conduct international business in Islamic finance, while enjoying a highly conducive business environment. As a destination for financial investment, Malaysia offers a marketplace for global Shariah-compliant investment opportunities via a wide range of international financial institutions, extensive expertise and an array of Islamic financial products and services.

(Zawya / 01 aug / 2013)

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Islamic Investment Malaysia:

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