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Monday, 26 October 2015

Islamic banking, solution to Nigeria’s economic woes

Muhammadu Sanusi II, the Emir of Kano, has urged the federal government to introduce Islamic banking across the country.
He said it would be another way to the economy amid the effect of the decline in oil prices.
Speaking in Kano during a workshop on non-interest capital organised on Monday, Sanusi said huge potentials abound in Islamic banking.
Pointing out that Britain, South Africa, Cote D’voire had adopted Islamic banking, he wondered why Nigeria had not taken advantage of the benefits in the system.
He commended the Osun state government for adopting non-interest free capital market, urging Kano to take the same step.
Sanusi thanked the Securities and Exchange Commission (SEC) for organising a sensitisation programme on Islamic banking, saying the timing was accurate.
Kano State Governor, Abdullahi Ganduje, emphasised the importance of an interest-free capital market in a place like Kano, an economic hub.
(Daily Post / 21 October 2015)
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Malaysia aims to boost Islamic finance with new initiatives in budget

Malaysia is hoping new incentives for "ethical" Islamic bonds and home loans will strengthen the country's sharia-compliant investment market and lure more private players to one of the world's largest Islamic financial sectors.
The government announced the new incentives in the 2016 budget which was delivered in parliament on Friday, as Prime Minister Najib Razak doled out populist incentives to shore up support.
The government originally introduced the concept of "ethical" sukuk to finance "sustainable and responsible investment" (SRI) in projects such as wind and solar power generation or affordable housing, in 2013.
Sovereign wealth fund Khazanah [KHAZA.UL] sold 100 million ringgit ($23.7 million) of SRI sukuk in May this year but so far there have been no other issues in the ethical sukuk market.
In Friday's budget, Najib said Malaysia would cut taxes on issuance costs of SRI sukuk, and also that sharia-compliant loan instruments would be given a 20 percent stamp duty exemption when they were used to finance home purchases.
Other initiatives for the Islamic finance sector will be announced later, Najib said without elaborating.
Malaysia, with a mostly Muslim population, has been at the forefront of innovation in Islamic finance but has largely relied on state-linked firms to launch new products, while participation from corporations has been sporadic.
Last year, $74.9 billion worth of sukuk were issued from Malaysia but only $13.5 billion came from corporate issuers, according to data from Zawya, a Thomson Reuters company.
Attracting private sector firms has become more important this year because the central bank has shifted away from selling its own sukuk, causing total global issuance to drop by about 40 percent.

Also, low oil and commodity prices mean Malaysia may be in for years of slower growth, making it harder for Islamic banks and insurers, which remain smaller than their conventional competitors, to invest in developing products and expertise to narrow the gap.
(Reuters / 25 October 2015)
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