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Monday, 21 December 2015

Zakat Foundation of America tours project sites

Mr Kemal Ali Berru, Programme Director of Zakat Foundation of America, a Chicago-based Islamic charity organisation, has toured some of its project sites in Ghana.

Mr Berru told journalists that the local office of the Foundation is in Kumasi, working in the areas of education, health, livelihood empowerment and humanitarian assistance in the Brong-Ahafo, Northern and Upper East Regions.

Mr Selia Alhassan, the Country Representative, disclosed that the organisation is currently implementing a livelihood programme at Jugboi in the Bole District in the Northern Region, where it had set up a cassava processing plant to help women farmers to process the crop to earn a living.

The Foundation has also established two other vocational training centres in Kumasi and Bole equipping beneficiaries with machines to be self-employed.

Mr Salia also spoke about other interventions of the Foundation, which includes the provision of medical supplies to four hospitals and 32 water wells across Bole, Bawku and Binduri.

He said the interventions are helping to transform lives, and pledged to improve on them to touch more lives.

Mr Birru expressed gratitude to all partners, including the district assemblies, for their collaboration to ensure the delivery of the projects.

(Ghana Web / 20 December 2015)
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Sukuk has potential to be a key financing instrument in Europe

Dubai: Huge demand for long term funding from the European corporate sector in the context of rising regulatory capital requirements faced by banks and financial institutions, there is a huge opportunity for sukuk to emerge as an alternate funding source, according to recent study by Deloitte.
While European corporates are looking for viable long term funding source, Asian and Middle Eastern investors are on lookout for western asset classes suitable for their portfolios. Experts say the complementarity of demand for and supply of such instruments makes sukuk an ideal financing solution.
“The need from European corporate to finance long-term projects that require large capital upfront is challenged by the scarcity of debt finance. At the same time, there is a need from Middle Eastern and Asian investors with funding capacity for Sharia-complaint assets in maturing economies. This correlation between the needs of European corporates and investors in the Middle East and Asia points to strong potential for initiation of Sukuk products and market,” said Joe Al Fadl, partner and Financial Services Industry leader at Deloitte Middle East.
While the global financial crisis has exposed market vulnerabilities such as high volatility and lack of liquidity in capital markets, it also has increased the call for alternative financing asset classes which will have balanced risk and return characteristics that enhance regulatory capital and equity buffers in the financial industry.
“Responding to several global forces, financial services institutions are now required to comply with fundamental regulatory capital changes. The Basel III requirement emphasises on capital quality and the need for improvement of common equity. Basel IV emerged to supplement these requirements and addresses the importance of capital instruments and debt exposures not only in the banking institutions but also in the corporate world. It further proposes the revision for credit risk,” said Dr. Hatim Al Tahir, Leader, the Deloitte ME, Islamic Finance Knowledge Center.
While progress has been made on the regulatory front, the Islamic capital market has introduced innovative equity and debt instruments which are seen to have strengthened the capitalisation and liquidity positions of Institutions offering Islamic Financial Services (IIFS). The development of High Quality Liquidity Asset (HQLA) sukuk, hybrid and perpetual sukuk are examples.
On the corporate debt front, different project financing structures have been introduced in recent years and are used by government and private sectors. Key markets such as include the GCC, Malaysia, Turkey, Pakistan, Indonesia and Europe use these structures.
Experts say Islamic capital market is uniquely advantaged in the current climate to create innovative Sharia-compliant debt and equity instruments that will address the increased demand for funding infrastructure projects in both developing and maturing economies. Currently, developing countries spend about $1 trillion a year on infrastructure and an additional $1-1.5 trillion will be needed through 2020 in areas such as water, power and transportation projects, according to the World Bank.
Although there are clear sings of new opportunities, experts say future depends on a number of factors. “This is subject to the existence of the right regulatory and legal frameworks to ensure protection to investors, and apply the right governance and risk management over deployed funds, thus creating an opportunity to let it develop and grow in a market that is active and liquid,” said El Fadl.
A number of European states have introduced laws and regulations to facilitate the growth of the sukuk market. The most prominent issue in Europe to date took place in Britain and raised £200 million. It was significantly oversubscribed by 10 times the amount raised, attracting investors from the UK, Middle East and Asia.
The Deloitte study provides a number of case studies of possible scenarios in which sukuk could be applicable to certain industries in European countries. Sukuk are used to finance specifically designated socially responsible investment and holdings of sukuk securities are regarded as ethical investments. Germany’s renewable energy sector is one such industry that fits the ethical investment category and whose need for high collateral upfront makes alternative financing such as Sukuk a possible solution.
(Gulf News Banking / 21 December 2015)
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Favourable regulation key to Islamic finance growth: Expert

Muscat: Developing an enabling and empowering environment, including the necessary legislative and regulatory framework, is needed to support the growth of Islamic economy, according to an expert.

This can be done by working on several key strategic pillars, Abdulla Mohammed Al Awar, chief executive officer of Dubai Islamic Economy Development Centre (DIEDC), said at the 2nd Islamic Banking Knowledge Forum hosted recently by Bank Nizwa in Muscat.

DIEDC was established in 2013 with a vision to position Dubai as the ‘capital of the Islamic economy’ and with a mission to implement a comprehensive strategy with practical programmes and initiatives to achieve this goal.

Al Awar noted that the centre is founded on the seven pillars of finance, the ‘halal’ industry, tourism, digital infrastructure, art, knowledge and Islamic standards.

Islamic economies

He explained that the Islamic economies of the world represent more than $7 trillion in the gross domestic product (GDP).

Islamic financial assets are estimated at $1.81 trillion and are expected to reach 3.25 trillion by 2020, the expert said, adding that the 1.7 billion Muslim population is growing at twice the rate of the global population.

According to him, fast growing and relatively young population of Muslims is increasingly asserting its Islamic sensitivities in the marketplace to products as varied as food, banking, and finance extending all the way to fashion, cosmetics, travel and healthcare.

Islamic finance

On DIEDC’s strategy regarding Islamic finance, Al Awar said that the centre works with both public and private sector partners and reaches out within the Middle East and beyond to build the international bridges essential for the global success of Islamic finance.

The centre also works with the Islamic finance industry to develop the regulatory framework that will enable the sector to flourish and become a global alternative to conventional finance, he added.

Halal industry

Commenting on the halal industry pillar, he said that the centre pursues national halal regulations, standards and auditing processes and works with public and private sector stakeholders to consolidate and unify halal certification standards globally.

He added that the centre’s other strategies in this regard include driving the development of the ‘Halal Park’ concept to enable halal sector companies to set up in Dubai and receive globally recognized halal certification as well as creating a knowledge base accessible to stakeholders, especially potential entrants to the sector.


On the pillar of tourism, Al Awar said that Muslims globally spent around $142 billion on tourism in 2014, which accounted for 11 per cent of global expenditure, and is expected to reach $233 billion in 2020. He clarified that the data excludes Haj/Umrah pilgrimage.

He noted that the centre’s strategy is to attract investment in this sector, create awareness and consolidate family friendly tourism travel guidelines and certification standards to protect consumers and ensure sector integrity.

Digital economy

Digital economy is another pillar that DIEDC is seeking to promote through supporting digital start-ups among Muslim entrepreneurs, encouraging technology companies to create Arabic and Sharia-compliant content or products and working with the digital media industry to develop the regulatory framework that will enable the sector to flourish.

Art and design

Al Awar said that in order to promote Islamic fashion, arts and design landscape, the centre strives to establish an enabling environment for a modest fashion incubation platform to develop sector talent.

According to him, DIEDC also encourage film festivals to establish dedicated awards for Islamic heritage films and promotes the adoption of architecture that reflects Islamic lifestyles and values.

In addition, the expert said that the centre works with stakeholders to align academia with government and industry to address skill shortages within the Islamic economy and conducts studies and specialised research on the Islamic economy to create a global knowledge resource.


Commenting on the standards and certification pillar, Al Awar said that, as part of its efforts, the centre works with stakeholders to develop a framework for certifying halal products and services that is globally acceptable.

(Times Of Oman / 20 December 2015)
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