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#UK gets its first Islamic P2P crowdfunder for SMEs

A new UK-based Shariah-compliant crowdfunding platform providing business financing to small and medium sized enterprises (SMEs) launched at the end of June. Qardus is an appointed representative of Share In Ltd. According to founder Hassan Daher, Qardus is a peer-to-peer platform for everyone, whether Muslim or non-Muslim, open to investors seeking to generate superior returns as well as having a social impact. Qardus connects SMEs and investors. The platform offers the unsecured financing for a period of up to two years in the form of commodity murabahah. The minimum investment size is £100 and investors can expect over 10% return per annum but capital is at risk. Looking ahead, Qardus plans to offer more than peer-to-peer lending. It will look to raise £1.5 million by the end of this year and may consider VC funding or equity crowdfunding.

The Asset webinar: ESG, Islamic finance help shield economies during pandemic

In Malaysia Islamic finance has demonstrated its resiliency in this difficult time with continuing issuances of green and sustainable sukuk, a trend that will continue over the short-to-medium term. To this end, Malaysia’s Employees Provident Fund (EPF) is enhancing its focus on integrating different ESG initiatives into its investment strategy. EPF conducts negative screening and excludes those stocks that it considers unethical. It engages very closely with the investee companies, regulators and asset managers, and has a rating tool to assess the quality of ESG adoption. Banks in Malaysia are also pushing various ESG initiatives. This comes as Bank Negara Malaysia, is coming up with a taxonomy that defines a green loan and ensures that banks indicate whether certain loans are green and, if so, how green they are.

Property financing campaign launched by #Bahrain-based Al Baraka Islamic Bank

Al Baraka Islamic Bank has launched a promotional campaign to provide property financing to the beneficiaries of the Housing Ministry’s Mazaya programme. Under the campaign, profit rates will be calculated at competitive rates, there will be no down payments, and zero banking fees. The bank will also cover the fees of life insurance for the beneficiaries and will provide fire insurance for the property. Also, there will be instant prizes for the executed deals. The financing is up to BD120,000 with maximum duration of 25 years.

Islamic Development Bank Group in partnership with the #UAE Ministry of Economy and Annual Investment Meeting Hosted a Live Webinar To Discuss Challenges Facing Co-VID 19

The Islamic Development Bank Group in partnership with the UAE Ministry of Economy conducted a live webinar entitled "IsDB Group Private Sector Action Response to COVID-19". The webinar discussed the future outlook to overcome the COVID-19 pandemic. In addition, the webinar highlighted the IsDB Group’s US$2.3 billion Strategic Preparedness and Response Programme. During the webinar, 3 online initiatives were launched: Digital Country Presentations, Startups Virtual Pitch Competition and the MADE IN…..SERIES, which is a digital platform for SMEs who want to showcase and present their local products, project and services to an international audience.

ADIB continues its support to customers impacted by COVID-19

ADIB has launched a series of special offers exclusively to healthcare professionals as a tribute for their efforts during the COVID-19 pandemic. These offers include reductions and discounts on ADIB products: special reduction on the profit rate of personal and auto finance; AED500 reduction in fees for ADIB covered cards or a voucher from Amazon or Noon when applying for cards; fixed profit rates on home finance starting from 2.99% per annum on home finance; 20% fee reduction on all wealth management products; Smartaccount welcome pack and no minimum balance requirement for Smartbanking; an iPad with every Life and Savings Takaful plan, if an AED 1,000 monthly contribution is made. ADIB was among the first UAE financial institutions to launch relief measures for customers during COVID-19, including the postponement of monthly installment payments and the reduction of certain fees.

#Saudi Arabia’s mortgage lender Amlak to start trading on Tadawul from Monday

Saudi Arabia’s mortgage lender Amlak International for Real Estate Finance starts trading shares on the Tadawul stock exchange. The company is floating 27.18 million shares, or 30 per cent of its total, with an indicative price range set at 15-17 Saudi riyals (Dh14.7-Dh16.6) per share. Proceeds of the offer are being used to repay selling shareholders. Amlak International was set up in 2007 and is a non-bank lender, mainly of property loans. Shares in Amlak International's IPO will be allocated on a pro-rata basis to individuals who subscribed to the offer, depending on the size of their request.

FinTech can help Islamic finance sector to innovate

FinTech has spurred the evolution of the Islamic finance industry over the last year. It helps to address the need for simplification and innovation in the sector. It also provides a great opportunity for the sector to streamline services and attract new segments, with the key being digital-savvy millennials. Dubai and Dubai International Financial Centre (DIFC) are key players in the Islamic finance sector. DIFC and Dubai Financial Market have launched the first Dubai Sustainable Finance Working Group to create a sustainable financial hub in the region in line with the UAE Sustainable Development Goals 2030. They are encouraging the use of green financial instruments and responsible investing.

At least one in ten billionaires have donated for COVID-19 relief

More than 10% of the world's nearly three thousand billionaires made a philanthropic commitment in support of COVID-19 response and relief efforts between January and May. According to the Billionaire Census 2020, billionaires who have donated were more likely to be in the tech industry and were more likely to be under the age of 50, to be self-made and to be wealthier. The share of women was larger among COVID-19 donors and those women were more likely to be self-made. The seventh edition of the annual study also found that the number of billionaires globally rose 8.5% in 2019, to 2,825, while their combined wealth grew 10.3%, to $9.4 trillion.

FinTech can help the Islamic finance sector to innovate and grow

FinTech has spurred the evolution of the Islamic finance industry over the last year. It helps to address the need for simplification and innovation in the sector. It also provides a great opportunity for the sector to streamline services and attract new segments, with the key being digital-savvy millennials. Dubai and Dubai International Financial Centre (DIFC) are key players in the Islamic finance sector. DIFC and Dubai Financial Market have launched the first Dubai Sustainable Finance Working Group to create a sustainable financial hub in the region in line with the UAE Sustainable Development Goals 2030. They are encouraging the use of green financial instruments and responsible investing.

Islamic Development Bank Deploys #Sukuk to Counter Corona Impact

The Islamic Development Bank Group (IsDB) set aside $2.3 billion for its Strategic Preparedness and Response Programme for its member countries to tackle the economic fallout of the corona pandemic. OIC member states may partake in Digital Country Presentations, a new global gateway that offers investors, governments, and institutions an overview of upcoming trade and investment opportunities. SMEs can open a virtual 'stall' on Made in Series, an open platform that enables smaller businesses to present products, projects, and services to a global audience. Earlier this month, the IsDB issued its first-ever sustainability sukuk for social projects. According to Group President Dr. Bandar Hajjar, the latest sukuk placement allows the IsDB to tackle the aftermath of the pandemic with strong interventions in affected countries and sectors.

Global #sukuk market: A window of opportunity is opening

According to S&P Global Ratings, total sukuk issuance volume for the full year 2020 will be lower than in 2019. Central banks have already taken measures to boost banks' liquidity in core Islamic finance countries, so they are unlikely to issue sukuk this year. They want banks' increased liquidity to reach corporates, thereby minimizing the risk of a long-lasting economic downturn. The difficult economic environment has led to higher financing needs for sovereigns, but most of them are turning to conventional markets due to the complexity of issuing sukuk. The number of defaults among sukuk issuers with low credit quality will likely increase, which will serve to test the robustness of legal documents for sukuk.

The impact of Saudi Arabia's VAT increase on Islamic financial institutions

Value added tax ("VAT") was pioneered by the European Union, but is gradually spreading worldwide. Saudi Arabia recently tripled its rate of VAT. While VAT in Saudi Arabia is only a couple of years old, the Saudi VAT law follows widespread international precedent by also exempting financial services. Accordingly, all financial institutions will suffer a hit to their profit and loss account. All purchases of goods and services which are subject to VAT increase in cost by 9.5%. This may lead to an increase in bad debts in the Saudi banking sector. Islamic financial services are not expected to suffer more (or less) than conventional financial services.

S&P Global expects #sukuk issuance to touch $100bn in 2020

Sukuk issuance volume is expected to total around $100bn for 2020, about 40% lower than in 2019. The issuance volume fell 27% in the first six months of this year. S&P Global Ratings noted the number of defaults among sukuk issuers with low credit quality will likely increase, which will serve to test the robustness of legal documents for sukuk. Also, some sukuk may be issued to tackle social issues as economies recover, rather than solely to serve investors' financial interests.

UAE Islamic Banks: 2019 Results Dashboard

According to Fitch Ratings, Islamic financing and deposits accounted for 27% of total sector financing and deposits at end-2019. Growth in Islamic financing slowed significantly in 2019. Asset-quality metrics deteriorated in 2019, particularly due to pressures in the real estate and contracting sectors, but also in entertainment, hospitality, and retail and wholesale trade. The operating profit/risk-weighted assets ratio also deteriorated due to increased financing impairment charges. Capital ratios have increased over the past four years, while core capital ratios remain below those of conventional banks but the difference has narrowed.

#Qatar- #Merger was a smooth affair: Barwa Bank Chairman

Barwa Bank held yesterday its Ordinary General Assembly and approved all the agenda of the meeting. The annual general meeting was presided over by the Bank's Chairman and Managing Director Sheikh Mohammed bin Hamad bin Jassim Al Thani. It was held via video conferencing. The focus of the meeting was on completing the full merger process with International Bank of Qatar, in addition to statistics and financial results for the year 2019 as well as the Bank's future plans. The merger took place in a record time that did not exceed 11 months. Barwa Bank recorded remarkable growth, as its total revenue increased by 43% to reach QR3.3bn, while total assets reached QR77bn, supported by financing assets that exceeded QR51bn.

Sustainable development for real economy: Some lessons from the 12th ICIEF

The 12th International Conference on Islamic Economics and Finance (ICIEF) was held in Istanbul this month. It was organized by Istanbul Sabahattin Zaim University, Islamic Research and Education Institute (IRTI) and the Islamic Development Bank (IDB). Because of the pandemic the conference committee decided to organize it virtually. 14 eminent personalities and Islamic finance experts shared their thoughts on the future of Islamic economics and finance. Altogether, 132 papers out of some 472 submissions from 40 different countries were selected for presentation. Some papers focused on implementing a circular economic model that facilitates environment-friendly production and consumption. The circular economy concept is very much aligned with the concept of sustainable development and may support achieving the United Nations' SDGs by 2030. Presenters repeatedly underscored that the Islamic financial system can be a major driver in the transformation toward a circular economy.

The Hajj Pilgrimage Is Canceled, and Grief Rocks the Muslim World

The cancellation of the Hajj pilgrimage sent shock waves of sadness and disappointment across the Muslim world. Performing the pilgrimage at least once for those who are physically and financially able is one of the five pillars of Islam. Making the trip is a sacred milestone for the world’s 1.8 billion Muslims. The Saudi government announced on Monday that no pilgrims from outside the kingdom could perform the hajj this year. On Tuesday, Saudi officials narrowed the order, saying that only about 1,000 pilgrims would be permitted this year, a tiny fraction of the 2.5 million who came last year. The cancellation weighs particularly heavily on older Muslims who have been waiting for years to go in hopes that they can fulfill their religious obligation before death.

My Say: Financing Covid-19 stimulus packages with GDP-linked #sukuk

The fiscal cost of fighting the economic fallout of the pandemic has been great for each nation. Many governments have already pledged billions in grants to support fiscal stimulus packages. Through moratoriums and debt relief programmes, capital that would have otherwise been used to pare down debts will instead be utilised by vulnerable groups and SMEs to support their expenditures in times of reduced income. These expenditures will in turn contribute towards GDP growth, save jobs and limit unemployment. But in order to do so, governments have to dig deep into their reserves. GDP-linked sukuk is one way to convert debts into equity repayments based on the GDP performance of the country. GDP-indexed securities can be viewed as desirable vehicles for international risk sharing and for avoiding the disruptions arising from formal default.

NBB diversifies its Murabaha service to clients by offering #Sukuk-based #Murabaha facility

The National Bank of Bahrain (NBB) announced its subscription to Bahrain Bourse’s (BHB) newly introduced Murabaha service, which will be used by the Bank when transacting in Islamic Commodity Murabaha financing. NBB is one of the first banks in the Kingdom to execute a transaction using the new fully Shari’ah compliant service. The service employs Government of Bahrain Islamic Ijara Sukuk, whereby the lender in the financing transaction buys the Sukuk from the CBB and after the transfer of the ownership, sells them to the borrower, with a deferred sell as the underlying commodity.

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