MENA

#Fintech News from the Middle East and North Africa (MENA)

Here’s a round up of recent fintech news from the MENA region. Saudi Arabia’s central bank has signed a deal with Ripple to use distributed ledger technology to settle payments. Dubai Multi Commodities Centre (DMCC) reports that gold trader Regal RA DMCC is the first company in MENA to gain a licence to trade cryptocurrencies. Honeywell launches Middle East industrial cybersecurity center. International Data Corporation reports that MENA spending on blockchain technology will grow to $80 million this year compared to $39 million in 2017. By 2021, regional blockchain spending is expected to reach $307 million. Monami Tech introduces digital payment service, Lendme, while Monetary Authority of Singapore and Central Bank of Egypt forge fintech partnership.

Amen Bank se positionne sur la finance islamique

L’arrivée de la troisième banque tunisienne sur le segment de la finance islamique pourrait encourager d’autres grandes banques à se lancer sur ce marché. Ahmed Karam, président du directoire du groupe, a indiqué que Amen Bank a déposé une requête à la Banque centrale tunisienne pour ouvrir une filiale spécialisée dans les produits financiers islamiques. La Tunisie compte déjà deux établissements bancaires à vocation islamique: al-Baraka Bank Tunisia et banque Zitouna. Amen Bank possède 154 agences, contre 76 agences pour Banque Zitouna et une vingtaine pour al-Baraka Bank. Amen Bank est la propriété du groupe familial Ben Yedder, qui rassemble une cinquantaine de sociétés présentes notamment dans les banques, l’assurance, l’agroalimentaire, l’hôtellerie et la santé.

#Tunisia: Islamic development bank could withdraw from Zitouna bank’s capital

The Islamic Development Bank (IDB) has decided to sell its 21% share in Zitouna Bank’s capital. The origin of this decision is supposedly a disagreement of specifications. The withdrawal could benefit Triki Group, which could disburse 80-90 million Tunisian dinars for this acquisition. IDB entered in Zitouna Bank’s capital in 2014, with TND37.5 million. Since its inception in 2009, Zitouna Bank has become a leading Islamic financial instituion in the local market.

Islamic Development Bank to Launch Multimillion Dollar Fund in Rabat

On the 4th of February, Rabat will be the host city for a workshop introducing a multimillion-dollar fund from the Islamic Development Bank called Transform to Morocco. The fund is intended to stimulate growth in science, technology and innovation and its first undertaking is an online platform called Engage. This venture will help match businesses with innovators and will fund scientific initiatives. The February workshop will be presented by Dr Hayat Sindi, who will meet with chief Ministers and Government Agencies during her tour in Morocco. She will meet spokespeople from the Ministry of High Education, Ministry of Economy and Finance and the Ministry of Industry, Investment, Trade and Digital Economy.

Unicom Formation flies the flag for Islamic financing

Unicom Formation, which specializes in professional training, is to organise Algeria's first trade fair dedicated to Islamic financing in partnership with the Sahel Chamber of Commerce and Industry and the wilaya of Boumerdes.

CIBAFI and The World Bank presenting study on "Corporate Governance Practices in Islamic banks 2017"

It is well established that good corporate governance strengthens institutions and financial sectors, and in so
doing contributes to building strong economies and economic growth.

Deficiencies in corporate governance were among the factors that contributed to the global financial crisis
(GFC) of 2007–08. As a result, global standard setters such as the Basel Committee on Banking Supervision
(BCBS) and the Organisation for Economic Co-operation and Development (OECD) have been updating and
strengthening their guidelines on good governance practices.

The Islamic Financial Services Board (IFSB), which sets standards for Islamic financial institutions, published its
Guiding Principles on Corporate Governance in 2006 as its standard IFSB-3. The Principles address, within the
context of corporate governance, the distinct features of Islamic banks, such as the different relationship that
they have with some of their stakeholders.

More:

#Turkey: Lease Certificates As #Sukuk Financing Model In Turkey

Although Turkey had its first sukuk issuance in 2011, Sukuk has not been used as a financing model due to deficiencies in its legal framework. In 2013 new types of lease certificates have been introduced. Lease Certificate is defined as a security which is issued by an asset lease company (ALC) for the purpose of financing all kinds of assets and rights. Lease certificates may be issued by sales through or without public offering or in the form of private placement or sales to qualified investors. The lease certificates may be issued by ALCs, which have to be formed as joint stock companies. Lease certificates, sale of movables, immovable and intangible assets to ALC, sale back of these assets to the originator, all the hypothec transactions, the papers issued due to the lease of such assets are exempted from the stamp tax. Gains from the sale of the asset by Originator to ALC, and later by ALC to Originator, are exempted from corporate tax, regardless of the holding period of the asset.

INTERVIEW-#Bahrain's Salam Bank to launch Islamic #insurance products in #Algeria in 2018-CEO

Bahrain's Salam Bank will launch Islamic insurance products and Visa credit card services in Algeria this year. Salam Bank CEO Hideur Nasser said the lender would open 10 more branches in the country as the market for Islamic products was growing. He added that Islamic banking made up only 15.5% of the private sector in Algeria. The government wants to develop the sector, as the country looks for more ways to offset the sharp fall in oil prices and its energy revenues. For this, technical expertise and new legislation is needed in a country where powerful elites have resisted changes. Nasser said the legal framework had to be amended and sukuk could not be sold under current laws despite great appetite for them.

IIRA rates Al Baraka Bank #Syria strong for second year in a row

Al Baraka Bank Syria was granted a BBB investment grade rating by the International Islamic Rating Agency (IIRA). The bank was also assigned a sufficient credit capacity, with a rating of (71-75) as a total credit score. It also earned a strong credit rating, with a rating of 76-80 for the Asset Quality Management. The Bank’s corporate governance was assessed in the range of 66-70, and the Shari’a governance within the range (71-75). Mohammed Abdullah Halabi, CEO of Al Baraka Bank Syria said this result confirmed the accuracy of the strategy adopted by the Bank and the high quality performance of the management team.

DEAL: MENA region's first Reit #sukuk

Emirates REIT has issued the first sukuk by a real estate investment trust (REIT) in the MENA region. It's also the first REIT from the region to have a credit rating (BB+). REITs have not traditionally issued sharia-compliant bonds, and have instead preferred to tap conventional debt markets for their financing needs. The only previous issuance of this type was in Malaysia in 2014, when KLCC REIT sold $930 million of Islamic bonds. This new issuance was hosted by The Irish Stock Exchange and relied on underlying wakala and murabaha contracts. The entire timeline of the deal was less than two months. This was to ensure Emirates Reit didn’t miss the favourable issuance window. Standard Chartered Bank acted as sole global coordinator, ratings advisor and joint lead manager of the sukuk issuance.

Afreximbank taps Islamic finance to support Africa trade

The African Export-Import Bank (Afreximbank) has raised around $260 million via three Islamic finance facilities to support small- and medium-sized businesses in the region. The Egypt-based bank obtained a $100 million financing from the Islamic Corporation for the Development of the Private Sector (ICD). It also signed two financing agreements with the International Islamic Trade Finance Corporation (ITFC) worth $100 million and 50 million euros ($59.8 million) to help finance exports among African countries. Both ICD and ITFC are part of the Saudi-based Islamic Development Bank group of companies.

Top #Egyptian cleric forbids Muslims from #Bitcoin trading

The Grand Mufti of Egypt has explicitly prohibited trading in Bitcoin, explaining that it is forbidden in Islamic Sharia for the risks it holds, and its been used to fund terrorists. A Fatwa has been issued that the virtual currency should not be used to make financial transactions because it has no monetary cover by the Central Bank of Egypt (CBE). Mufti Allam remarked that Bitcoins undermine the legal system, as companies can evade taxes and not disclose their profits due to the fact that Bitcoins are untraceable. Furthermore, companies turn their attention to crypto currencies as it allows them to launder money or finance terrorist activities and engage in other fraudulent behaviors. The Mufti concluded that Bitcoin does not have a physical form and leads to fraud, therefore prohibited its use as it leads to more corruption.

#Turkey issues #detention warrants for 68 Bank Asya shareholders in post-coup probe: police

Turkish authorities have issued detention warrants for 68 shareholders of Bank Asya. The police operation targeted the network of the cleric accused for orchestrating last year’s failed coup attempt. The targeted shareholders all had voting rights to determine the bank’s administrative board. So far 49 of the 68 suspects had been detained. Bank Asya was founded by followers of the U.S.-based cleric Fethullah Gulen and was seized by the state in 2015. According to the Turkish government, Gulen masterminded the 2016 attempted coup, in which more than 240 people were killed by rogue soldiers. Gulen has denied the charges and condemned the coup. Since the abortive putsch, more than 50,000 people, including civil servants and security personnel, have been jailed pending trial and some 150,000 suspended or dismissed from their jobs.

#Zakat Fund #paid JD200k to #free 386 indebted #women in 2017’

The Zakat Fund paid JD200,000 to release 386 women who were imprisoned after failing to paying back their loans in 2017. The release came as part of the fund's programme “Sahm Al Gharimat”, funds allocated for indebted women, which aims to release women who cannot pay for their freedom, the fund’s director general, Abed Smeirat, told a newspaper in Jordan.
According to Islamic law, or Sharia, Zakat is one of the five pillars of Islam, a tax that requires paying 2.5 % of what a Muslim owns in cash money, gold, silver, cattle, farms and rentable assets, in alms. People who are burdened with debt that has been obtained for reasonable purposes are one of the eight categories of groups entitled to receive Zakat money, which is, in principle, managed by the state and is the only type of tax Muslim citizens are required to pay.

Islamic #microfinance necessary for poverty eradication

The 7th Global Islamic Microfinance Forum successfully concluded in Istanbul between 24–28 November, 2017. The first two days of the conference focused on topics like Islamic microfinance financial technology, financial inclusion, Micro Takaful, Waqf and Zakat as Supportive Elements for Islamic Microfinance. In the next two days, Islamic Agriculture and Rural Finance, the role of Islamic finance in the rural development and micro takaful came under discussion. While addressing the inaugural ceremony, Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD), said that Islamic microfinance was a core element of Islamic financial industry. Dr Amjad Saqib, Founder of Akhuwat Pakistan welcomed the guests and participants. He further announced that the next time such an event would be organised would be in London next year in October.

Halk REIT issues #Turkey's first #sukuk

Halk Real Estate Investment Trust (REIT) has issued Turkey's first sukuk with a nominal value of TL 100 million ($26.12 million) through Halkinvest. The return of the 87-day lease certificate will be realized at 13.25% at the end of the maturity period. Halk REIT General Manager Feyzullah Yetgin said that the widespread use of real estate-based financial products would make a great contribution to the real potential of the sector. Halkinvest General Manager Serdar Sürer said that the lease certificate issuance transaction executed on behalf of Halk REIT was their 60th capital market issuance transaction this year. He also said that they would continue to add value to their business partners with products based on the real economy.

Storm looming over Zitouna Bank sale

The sale of Zitouna Bank, which was launched on December 5 by state holding company Al Karama, could be quickly scuttled by the investment banks and other groups which had been hoping to get involved in this major operation.

#Fintech Is The New Oil In The Middle East And North Africa

In the Middle East and North Africa (MENA), the financial technology sector is coming of age. According to the State of Fintech report, fintech startups in the region have raised over $100 million over the past decade and investment is predicted to double by 2020. Disclosed investment in fintech had jumped 100% to over $35 million by October 2017. The number of fintech startups also increased from 46 in 2013 to 105 in 2015. It is estimated that it will more than double again to 250 by 2020. Despite the ubiquity of smartphones and internet connectivity, 86% of the adult population in the region is unbanked, while three in four GCC bank customers are ready to switch banks for a better digital experience. According to Abdulaziz Fahad Al Jouf, CEO of PayTabs, fintech could become as great a force in the Middle East as oil. In this environment, the region’s financial institutions are compelled to keep pace with the rapidly evolving fintech industry.

Public awareness key to boost Islamic finance in #Turkey

According to the General Council for Islamic Banks and Financial Institutions (CIBAFI), Turkey should raise public awareness of Islamic finance to boost the sector's market share. CIBAFI's secretary general, Abdelilah Belatik, called Turkey's target of raising Islamic banks’ share to 20% by 2023 ambitious but achievable. The council’s annual gathering to discuss Islamic finance will be held in Turkey next April. Belatik said that countries like Turkey and Indonesia and regions such as Central Asia and Africa are important as they have a great growth potential in the Islamic finance sector. Belatik said they work with countries which lack the infrastructure and regulation for Islamic finance to show them its role in the economy. He also underlined Islamic finance's significance for financial stability.

Syndicate content