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Monday, 25 January 2016

After Ivory Coast sukuk, West Africa bloc signs SME fund deal

Jan 25 The central bank of West Africa's CFA-franc zone has signed an agreement with the private sector arm of the Islamic Development Bank to help finance small and medium-sized businesses through a $100 million Islamic fund.
The deal follows a debut 150 billion CFA francs ($247.5 million) Islamic bond issued by the Ivory Coast last month, the second such transaction in the eight-nation Economic and Monetary Union of West Africa (UEMOA).
The Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD) will commit an intial $30 million for the SME fund and would help seek additional investors to increase its size to $100 million, a joint statement said.
UEMOA comprises Benin, Burkina Faso, Ivory Coast, Mali, Guinea-Bissau, Senegal, Niger and Togo. They share a regional central bank and the CFA franc currency, which is pegged to the euro.
Despite strong growth in the Middle East and Southeast Asia, Islamic finance has lagged in Africa, home to a quarter of the world's Muslims, presenting an opportunity for ICD which is exanding its activities across the region.
The Ivory Coast's sukuk, which was arranged by the ICD, saw a 38 percent allocation to investors from the Middle East region. In 2014, Senegal issued the region's first Islamic bond, a 100 billion CFA franc deal.
Niger has also signed up for a sukuk programme worth 150 billion CFA francs, although a timing has yet to be determined.

The central bank also committed to support SMEs by providing incentives to credit institutions, as well as developing complementary leasing and venture capital instruments. 

(Reuters / 24 January 2016)
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Muslim traders endorse Islamic banking system

COTABATO CITY, Maguindanao—Business leaders and stakeholders of the Autonomous Region in Muslim Mindanao and Central Mindanao have endorsed the establishment of an Islamic banking system, specifically one that prohibits the charging of high interest rates, a Basilan lawmaker said.
The proposal was indicated in House Bill No.5989 filed by Basilan Pary-list Rep. Sitti Djalia Turabin Hataman which was supported by Salem Glandour of Maybank Islamic Berhad in Malaysia and Amanah Islamic Bank executive Isdrro Sobrecarey.
Both businessmen cited the advantages of an Islamic banking system to operate in the Southern Philippines.
Hataman, wife of ARMM Gov. Mujiv Hataman, stressed that under her proposed Islamic banking law, “banks do not rely on high interest rates to sustain operation but push for moderate to socialized interest charge.”
The Basilan legislator said that based on Islam, the banking system prohibits usury or taking high interest on cash loans and cater mostly on the poor and moneyed traders.
Glandour explained that “while Islamic banking system offers low interest rates, it has no conflict with conventional and commercial banks.”

Hataman hailed the business leaders’ warm reception of her proposal and pledged to continue dialogues through roundtable discussions with other stakeholders.

(The Standard / 23 January 2016)
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SABB Takaful reports almost 79 per cent slump in net profit

The company also cited, “Increase in G&A by 20.2 per cent which consist of increase in supervision and inspection cost accruals. Decrease in Fees and commission income by 49 per cent (due to decrease in profit share from Reinsurers) and decrease in investments income by 4.7 per cent. This is despite the marginal increase in NWP by 2.9 per cent, decrease in surrenders & maturities by 52.5 per cent, decrease in policy acquisition costs by 29 per cent.”
Operating transactions results showed a drop of 82.28 per cent to SAR 2.564 million. Gross written premiums rose 4.71 per cent to SAR 202.183 million. Earnings per share before Zakat and income tax fell from SAR 0.5 to SAR 0.11.
(C P I Financial / 19 January 2016)
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