Salaam Gateway

#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.

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 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.

New #UK waqf fund to start investing in real estate with eye on other asset classes

The recently established UK-based National Waqf Fund (NWF) will start investing in real estate, according to CEO and co-founder Umer Suleman. NWF will be focused on the charity and social aspects of waqf. The three main aims of NWF are to establish a central fund, manage awqaf on behalf of other organisations as well as create a virtual centre of excellence for Islamic endowments. NWF will invest in real estate and through its investment committee decide on how and where to deploy the funds. Suleman noted that the upcoming property portfolio will primarily focus on London, Birmingham and Manchester, without the exclusion of other areas. NWF aims to raise £10 million ($12.37 million) within the next 1 to 2 years. Within the next decade, Suleman hopes NWF will have around £150 million of assets under management.

#Indonesia issues $2.5 bln global #sukuk including $750 mln green tranche

The government of Indonesia issued $2.5 billion in wakalah global sukuk in three tranches. The 5-year paper of $750 million was sold as a green sukuk, while the other two tranches consisted of a 10-year tenor of $1 billion, and a 30-year maturity of $750 million. The sale was welcomed by investors with an order book that reached $16.66 billion, nearly 6.7 times the target amount. This global sukuk will be listed on the Singapore Stock Exchange and NASDAQ Dubai and the settlement will be carried out on June 23, 2020, with yields of 2.30% for the 5-year tenor, 2.80% for the 10-year tenor and 3.80% for the 30-year tenor.

‘It’s beyond our dreams to have Islamic banks all over the world’ – Shaikh Saleh Kamel, 1941 – May 18, 2020

Shaikh Saleh Kamel, founder of Al Baraka Banking Group, passed away on May 18. He was one of the pioneers of Islamic banking, having set up one of the first of the modern-day Shariah-compliant banks in the late 1970s that became the Al Baraka Banking Group today. Shaikh Saleh was also President of the Islamic Chamber of Commerce, Industry and Agriculture, the Jeddah Chamber of Commerce and Industry, and he served as the Chair of the General Council for Islamic Banks and Financial Institutions. Shaikh Saleh said his satellite and internet channel, which he opened in 1998 and that largely presents religious content, was one of the things in his life he was most proud of.

#Indonesia government partners with biggest Islamic organization to set up 10,000 grocery stores

Indonesia’s Ministry for Economic Affairs is teaming up with the country’s largest Islamic organization Nahdlatul Ulama (NU) to set up 10,000 grocery stores in the next 4 years. The ministry’s vice deputy Gede Edy Prasetya estimates that it will cost around 40 million rupiah to establish a new grocery store under the new partnership. Amid the COVID-19 outbreak this year, the government is seeking new potential eligible beneficiaries for its micro credit schemes. This year, it aims to disburse 190 trillion rupiah ($13.6 billion) as part of the scheme. It has already disbursed 34.2 trillion rupiah in loans as at the end of April, with a non-performing loan rate of 1.23%.

#Indonesia’s BNI Syariah to expand international banking services

Indonesia’s state-owned BNI Syariah plans to add overseas representative offices to run trade finance, and financial institutions and remittance services. The Islamic bank will leverage the branch offices of its parent company, Bank Negara Indonesia, in Singapore, Tokyo, Seoul, Hong Kong, London and New York. The bank can now expand its international banking services after it received a non-cash capital injection of 255 billion rupiah ($17.5 million) in March. This moved it up to Tier 3, for banks holding core capital of 5 trillion rupiah (around $342.5 million) to 30 trillion rupiah. The lender is also eyeing markets outside its current geographies, such as Malaysia, Saudi Arabia and Taiwan. Alongside expanding its international presence, the bank is mitigating downside risks by optimizing its digital banking channels.

With Islamic social finance increasingly responding to global humanitarian efforts, Muslim donors explain why they choose to give to refugees

There’s an increasing awareness of the significance of Islamic social finance and philanthropy with more organizations reaching out to potential donors. In the Middle East, three donors explain why they choose to give to refugees through the United Nations’ Refugee Agency, UNHCR’s Refugee Zakat Fund. The most important reasons for them are how widely the organization distributes aid and how transparent and honest it is. Houssam Chahine, UNHCR's regional head of private sector partnerships, says the need for Zakat and Sadaqah for refugees this year is even greater. He is confident that the Fund can raise more donations this year in support of vulnerable refugee families, because challenging times persuade people to find ways to give more.

BIBF and UK firm Cogneum developing platform to converge Shariah governance and UN SDGs

The Bahrain Institute of Banking and Finance (BIBF) is working with UK-based developer Cogneum on a Shariah governance software platform. The cloud-based platform is meant to allow Islamic banks and financial institutions to streamline their internal Shariah governance processes, facilitate the integration of Maqasid al Shariah and the UN SDGs in their workflow. The software will help reduce charitable write-offs by Islamic banks due to Shariah non-compliance issues. The partners will initially target the platform for retail Islamic banks. BIBF director Mujtaba Khalid said the Shariah governance framework of the software solution will be based on AAOIFI Standards but can also be customized as per the banks’ Shariah governance manual. He added that the platform can also help organisations in the areas of green bonds, sukuk and sustainability risk reporting.

South Africa working on rand-denominated #sukuk issue

The Republic of South Africa is working on a rand-denominated sukuk for the financial year 2020/2021. Details regarding the size, tenor and structure of the Shariah-compliant notes will be made in due course. The government may also consider issuing a second sovereign U.S. dollar sukuk in the long term. South Africa issued its first-ever international sovereign sukuk in 2014. The deal consisted of a $500 million 5.75-year note, offering a profit rate of 3.90%.

#Bahrain’s Al Salam Bank exits $182.5 mln U.S. multifamily real estate

Bahrain's Al Salam Bank has sold a portfolio of seven multifamily assets in the United States for $182.5 million. Al Salam acquired the real estate assets in North Carolina and Texas in 2016. The bank said the sale price exceeds the original underwriting for the portfolio. Al Salam Bank’s head of private banking Ali Habib Qassim said the exit comes at an opportune time ahead of the uncertainty of the current COVID-19 crisis.

#Indonesia’s national Islamic economy committee budget slashed, plans suspended as gov't focuses on COVID-19

Indonesia’s National Sharia Economy and Finance Committee (KNEKS) will suspend non-urgent programs this year after its budget was slashed by a third as the government allocates resources to fight COVID-19. The committee will conduct a series of webinars focused on the impact of COVID-19 on the Islamic economy. KNEKS will also engage Indonesians to participate more in Islamic social finance by promoting Shariah-compliant fintechs such as LinkAja Syariah. Indonesia’s government has set aside 405.1 trillion rupiah ($24.65 billion) out of the state budget as a support and stimulus package to help the economy. It has re-allocated and re-focused 95.5 trillion rupiah from ministries and other government institutions as part of efforts to fund the package.

A new normal will require Islamic fintech to address financial inclusion

The COVID-19 pandemic has been an unexpected catalyst for digitalisation and this global crisis now may well be a boon to businesses promoting digital financial inclusivity. Approximately 40% of startups will not survive if the COVID-19 crisis continues after May 2020, according to a recent news report. Malaysia is now a nucleus for Islamic digital economic activity comprising of digital products and services catering to the Islamic crowd. The country has developed world-class regulation, driving new initiatives to accredit halal certifiers worldwide, granting the first Islamic fintech crowdfunding license and launching a new certification scheme for Muslim friendly hospitality. Islamic Fintech and Islamic Digital Economy encourage financial inclusivity by increasing awareness and providing access to SMEs through digital financial instruments.

#Malaysia’s BIMB Investment launches Shariah-ESG robo-advisor

BIMB Investment launched a robo-intelligence investing platform focused on sustainable and Shariah-ESG assets. BEST Invest will give investors access to a suite of BIMB Investment’s Shariah-ESG unit trust funds across asset classes including global equities, Asia Pacific equities, sukuk, and money market. BIMB Investment became an official signatory of the United Nations-supported Principles for Responsible Investment (UNPRI) in July last year. At the time, the company’s CEO said it had integrated more than 250 ESG metrics in its investment process since 2015. The new robo-advisor will allow users to either start investing for themselves or enable the system to identify and select the best investment methods. Investments start at 10 ringgit with a zero sales charge.

#UK digital challenger bank Rizq eyeing summer launch

Rizq, a UK-based Islamic digital challenger bank is preparing for its launch this summer. Akmal Saleem, the fintech’s co-founder and CEO is positioning Rizq from the Muslim lifestyle perspective, so the new bank wants to solve mainstream banking issues for Muslims in the West. According to Saleem, Muslims in the UK still use conventional current accounts because they do not see a true alternative. Established in late February, Rizq will be both an app and web-based digital challenger bank. The company has applied for a license from the Financial Conduct Authority (FCA) and the registration is on track for acceptance by May 29. The digital challenger will offer a current account first and a premium account at a later stage. The company is working with a major card provider and will offer a debit card for both accounts.

The IILM Issues a total of USD 1.06 billion #sukuk

The International Islamic Liquidity Management Corporation (IILM) has issued three short-term A-1 rated sukuk for a total amount of USD1.06 billion. The auction drew more than USD1.85 billion in demand. With over 60 orders from diversified investors, the Islamic Primary Dealers got allocations across all tenors of up to 90% of the total issuances. The USD300 million 1-month sukuk were offered at 1.15%, while the USD460 million 3-month and USD300 million 6-month series were offered at 1.55% and 1.73%, respectively. With today’s auction, the IILM successfully crossed the 100th mark in sukuk issued since 2013, which amounts to a cumulative issuances of over USD53 billion.

Time to mobilise #zakat, retail #sukuk for Indonesia’s COVID-hit MSMEs – KNEKS official

An official of Indonesia’s National Committee for Islamic Economy and Finance (KNEKS) says that Islamic finance instruments and domestic retail sukuk are more sustainable financial support alternatives for COVID-hit MSMEs than loans from multilaterals. Indonesia’s government last week announced a 405.1 trillion rupiah ($24.65 billion) financial package to support households and businesses affected by the coronavirus pandemic. The potential of zakat in Indonesia is valued at around 286 trillion rupiah a year, according to the national zakat body BAZNAS. But actual collection is a far cry, at around only 9.5 trillion rupiah ($577.3 million) in 2019. On the possibility of a domestic retail sukuk, there are ongoing discussions on the instrument’s structure and mechanisms.

IFSB organises online facilitating implementation of standards workshop on financial inclusion and Islamic finance from IFSB Technical Note 3

The Islamic Financial Services Board (IFSB) is organising an online workshop on Financial Inclusion and Islamic Finance based on the IFSB’s recent Standard, Technical Note 3 (TN-3) on 21 April 2020 at 4.30pm (Malaysian Time). This is part of the workshop series that is aimed to create flexibility and enhance the participants understanding of the IFSB standards and guiding principles. TN-3 underscores the importance of financial inclusion, due to its intricate connection with economic growth, shared prosperity and poverty reduction. The IFSB invites all of its member organisations and market players to participate in this e-workshop on Financial Inclusion and Islamic Finance.
For more information on this and other FIS e-workshop series please visit https://www.ifsb.org/event_detail.php?e_id=427

Maybank Islamic’s new Dubai branch sets out to attract Gulf investors to Southeast Asia

Maybank Islamic’s move into branch banking in the Middle East aims to attract Gulf investors to Southeast Asia. The Malaysian bank opened its first overseas branch at Dubai International Financial Centre (DIFC) in February. Maybank Islamic deputy CEO Nor Shahrizan Sulaiman said the new Dubai branch would serve as a the bank’s gateway not just to the UAE but to the wider GCC. The bank pursues further growth in Singapore and Indonesia, which it sees as home markets outside of Malaysia. The international business expansion is not new, as it has always been one of the focus areas of Maybank Islamic from early on. Maybank Islamic was granted a full Islamic banking licence from the Dubai Financial Services Authority last July, allowing it to open the DIFC branch. It replaces Maybank Islamic’s office in Bahrain, which has closed down.

Fitch Ratings: Coronavirus intensifies pressure on Qatari banks

The spread of the corona virus will pressure Qatari banks' asset quality and funding volatility could recur. As Fitch does not expect any changes in the Qatari authorities' ability to provide timely support all Qatari banks have a Stable outlook. The consequences of the coronavirus and lower hydrocarbon revenues will weaken government capital spending, which will in turn affect the operating environment. Fitch now forecasts Qatar's real GDP growth at minus 2% in 2020, after an estimated 0.6% positive growth in 2019. Qatari banks have adequate capital buffers but an increase in problem loans could erode these buffers quickly.

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