Support Disruption for Good (SDG) #Challenge will showcase breakthrough models that also have material social impact
Zurich, Switzerland, February 22, 2017 – The RFI Foundation, in partnership with the Swiss Finance + Technology Association, Finocracy and the Responsible Finance & Investment (RFI) Summit partners, launched the Support Disruption for Good (SDG) Challenge to find the most promising ethical, responsible or Islamic FinTech innovation and connect them to the leading institutions in the responsible finance industry.
The SDG Challenge opens today and will remain open until March 17. All applicants will be judged against a transparent set of criteria by an independent judging panel drawn from across the responsible finance and FinTech industry. During the review process judges will evaluate the ability of each entrant to effectively scale, contribute to financial inclusion, contribute to the UN Sustainable Development Goals while being financially sustainable.
Whether you are an academic or practionner: If you wish to see your paper published on IslamicFinance.de please send us the relevant document along with a confirmation that you hold the copyrights of it and we can upload the work with your abstract provided.
As simple as that!
Michael Saleh Gassner
Sultan Choudhury, CEO of Al Rayan Bank, talks about Islamic finance in Britain and its appeal to non-Muslims. He says, Islamic finance appeals to anyone who agrees with the underlying principles: equitable distribution for everyone, prudent spending and the well-being of the community as a whole. It also provides an ethical alternative to traditional banking. Al Rayan Bank is structured to ensure that it operates ethically on a day-to-day basis. The bank's home-purchase plans (HPP) are structured differently to conventional mortgages. HPPs are based on the Islamic finance principles of ijara and diminishing musharaka. Currently the bank estimates that more than a quarter of customers are non-Muslim and the customer base is expected to grow in the coming years.
Bosna Bank International's net profit increased to 6.4 million marka ($3.5 million/3.3 million euro) last year from 5.6 million marka in 2015. Net interest income grew 22.5% year-on-year to 22.3 million marka in 2016, while net fee and commission income rose to 10.9 million marka from 9.6 million marka. The bank's total assets stood at 895.4 million marka at the end of 2016.
In Great Britain there are currently six Islamic banks, while another 20 lenders offer Islamic financial products and services. Al Rayan is Britain’s largest Sharia-compliant bank with 70,000 customers and 13 offices and branches. The bank underwent a major overhaul in 2014 when it was acquired by its Qatari parent, Masraf Al Rayan. Since that point, the brand was made more accessible, the imagery is no longer just Arabic, the bank uses British imagery as it is targeting all Brits. CEO Sultan Choudhury says about 25% of the bank’s customers are non-Muslim. Mr Choudhury also has his eyes fixed on the potential of the wider international market. In particular, he highlights the GCC national and expat market and HPPs (mortgages with an interest-free and Sharia-compliant structure). He says, Al Rayan's ambition is to be the number one bank for HPPs for GCC nationals and expats.
London Stock Exchange welcomes the largest Sukuk issued by a supranational globally in 2017, raising $1.25bn. The isssuance is listed by the Saudi Arabia based Islamic Development Bank and is a five-year bond with a 2.393 % yield. This listing adds to the broad range of Islamic finance products available to investors on London Stock Exchange. According to Nikhil Rathi, CEO of the London Stock Exchange, the listing demonstrates London’s standing as the world’s most international financial centre and confirms the UK as the key destination for Shariah-compliant financial products. The CFO of Islamic Development Bank, Dr. Ahmet Tiktik, said choosing London as the location for the new $1.25bn Sukuk shows the bank's continuous support for London Stock Exchange.
Global law firm Baker McKenzie has successfully acted for Dubai Islamic Bank in its defence of a $2 billion claim brought against it in the English Commercial Court. The claim was brought by Plantation Holdings, a holding company owned by an Argentinian-resident property developer. The allegation was breach of contract related to plot of land on the outskirts of Dubai, which Plantation had planned to develop into a high-end luxury lifestyle and equestrian complex. The Bank took security over the project as part of the restructuring of a $500 million debt owed to it as a result of a complex receivables financing fraud. The case was heard in an eight week trial, with evidence from witnesses from seven jurisdictions. The court ruled that Plantation's principal director had made up evidence and that another of Plantation's witnesses had manufactured documents, Plantation has been ordered to pay 70% of the Bank's costs on the indemnity basis. The nature of the case also resulted in examining the volatility of the Dubai property market and the functionality of its property registration system, as well as the Dubai authorities' approach to financial misconduct.
Warba Bank has recently purchased a newly constructed UK vehicle imports-exports facility strategically located next to Immingham port. The property is leased to KIA Motors UK for unbreakable lease term of 20 years. The facility has a capacity of over 15,550 cars and totalling 86.68 acres (35.08 hectares) of land. In addition, the site also includes a warehouse space of 63,515 ft.² (5,901 m²), facilitating distribution, refurbishment, valet, inspection, refuelling, offices and gatehouses. The site receives on average c.1,200 vehicles a week. KIA anticipate 100,000 UK car sales target by 2020. Warba Bank’s CEO, Shaheen Hamed Al Ghanem, said this acquisition was one of the best risks mitigated real estate investment of the bank, generating a steady and secured return from unbreakable long lease. He elaborated that the investment plan for 2017 is highly ambitious and the bank is looking for more international real estate investment opportunities in USA, UK and other continental European countries.
Yielders, a UK based equity crowdfunding provider, has just attained the first Islamic Banking certification and become the first FinTech firm in the West to do so. Yielders have developed something that looks pretty innovative, pragmatic and could prove tob e competitive in a low yield environment. Islamic banking has been around for more than 60 years. However, Sharia compliant Financial institutions only manage 1% of the global assets.
The Bank of England said it would develop a sharia-compliant liquidity tool for use by Islamic banks, to attract business from the industry's core centres. London has for some time sought to position itself as a global hub for Islamic finance.
The central bank has issued a consultation paper on a fund-based deposit model, that would help Islamic lenders to meet regulatory requirements for liquid asset buffers. It was stated, that the facility is unlikely to be ready before the spring of 2018, and it has yet to decide on whether it will develop a liquidity insurance facility. However, the tool would be a welcomed development for Britain's Islamic banks. These include Gatehouse Bank, the Bank of London and the Middle East, Al Rayan Bank and a unit of Qatar Islamic Bank.
The pricing would be comparable with conventional tools, and attractive for Islamic banks.
NCB Capital, Saudi Arabia’s leading provider of wealth management and investment services, and the Kingdom’s largest asset manager, has announced the launch of its Pan European Real Estate Fund with more than $150 million raised through a private placement.
NCB Capital has partnered with Fidelity International, a leading global asset manager, to invest in commercial properties, including office, retail, logistics/industrial and mixed use, located in key European property markets including France, Germany, Benelux and the United Kingdom. Favorable currency conversion rates, robust legal and regulatory environments, coupled with consistent growth expectations of the core European economies make this an opportune time to invest in a solid real estate market.
Al Rayan Bank has introduced a new range of home purchase plans (HPPs) to facilitate the move of an existing home finance product to the Sharia-compliant provider. The lender will assist customers by waiving or contributing to the fees associated with refinancing home finance to another provider. Al Rayan will waive the £399 HPP administration fee and the valuation will be paid by the bank, up to a maximum of £600, while the first monthly payment will see Al Rayan pay a cashback of £300 to the customer. The news comes after Al Rayan posted a 228% surge in home finance completions in January as it reported demand for Islamic finance was at an all-time high.
The principal reasons are the small size of Islamic banks, and the additional legal transactions involved with Islamic mortgages. In the UK, Muslims are often surprised to find that Shariah compliant Islamic mortgages are noticeably more expensive than conventional ones. A conventional mortgage is a reasonably simple transaction to document legally. Conversely, a residential Islamic mortgage involves both the bank and the new owner occupier purchasing the property jointly. The contracts used are less standardised and there are simply more pieces of legal paperwork involved in an Islamic mortgage. Furthermore, the stand-alone Islamic banks in the UK are very small compared with the very large conventional banks. All these costs must ultimately be borne by the customers and are reflected in the higher prices Islamic banks charge for Islamic mortgages.
Wednsday 5th April 2017: 18:00 – 20:30. Discussion starts promptly at 18.30
PwC, 1 Embankment Place, London WC2N 6RH, United Kingdom.
The Committee of IoD City of London in partnership with The British Malaysian Society invites IoD members
and guests to a discussion on ‘Islamic Finance: what it means & the opportunities for the UK post- Brexit.
The Islamic Finance Industry is predicted to reach $2.7 trillion in 2017. Islamic Banking contributes
80% to a total of $2.3 trillion. Other components of Islamic Finance include Sukuk Bonds (14%), Asset
Management (3%), Insurance (2%) and Micro finance (1%). Source for all figures – Centre of Islamic
Banking and Economics.
Our speakers are:
• Dato’ Faiz Azmi – Chairman, PwC Malaysia and Global lead
• on Islamic Finance for PwC
• Andrew Gosnay, Head of Banking and Finance,
Laytons Solicitors LLP
• Iqbal Asaria CBE , Islamic Finance expert and
Special Advisor to the Muslim Council of Britain
on business and economics affairs
After the panel presentations there will be opportunities for Q & A and discussion, followed by a drinks reception.
The evening is kindly hosted by PwC London. Dress code is business wear.
EdAid has launched the first ever Sharia-compliant crowdfunding platform to finance Muslim students interest-free. QardHasan will help students raise up to £30,000 within 40 days, channelling funds from charitable trusts and potential employers. The UK-based impact investment firm looks to contribute to each crowdfunding campaign by doubling every £500 raised by a borrower through the platform. The firm's founder and chief executive Tom Woolf said the new platform aims to provide affordable and fair funding options to Muslims. Woolf said the project falls somewhere in between LinkedIn and Kickstarter, as it helps students build up a broader network for their academic and professional career.
The Responsible Finance & Investment (RFI) Summit 2017 has announced a series of Executive Sessions organized by the RFI Foundation and INCEIF, the Global University of Islamic finance. These sessions will introduce participants from all backgrounds to the connection between Islamic Finance and Responsible Finance. INCEIF President Daud Vicary Abdullah said the alignment between the guiding principles of Islamic finance and the Sustainable Development Goals (SDGs) was significant. Daud added that these interactive Executive Sessions would provide a platform for people working in responsible finance who do not realize the alignment of responsible investment with Islamic finance.
Amid Brexit-fuelled uncertainty, London is trying to do its best to stay afloat as one of the most important hubs for Islamic finance in the Western world. There are now five fully-fledged Islamic banks, one Shariah-compliant hedge fund manager and one dedicated takaful provider in the UK. Also, there are over 20 banks providing Islamic financial services in “banking windows,” more than in any other European country. They benefit from the depth and liquidity of London’s capital markets, the large pool of expertise offered by specialists. Furthermore, the London Stock Exchange is a key global venue for the issuance of sukuk.
Experts say that one of the biggest drawbacks of Brexit for the entire UK banking industry will be the loss of “passporting” privileges that allow UK banks to access the single EU market without restrictions. Another issue is legal uncertainty for existing Islamic banks over to what extent current banking and financial regulations – which have largely been influenced by EU law – will change.
Gatehouse Bank looks set to expand into Islamic mortgage lending after registering two trademarks for shariah-compliant loans. The lender bought the trademarks for Gatehouse Mortgages and Milestone Mortgages last week. Gatehouse is currently known for shariah-compliant real estate investment and financing. Last month Gatehouse announced it had hired Aldermore group managing director of mortgages Charles Haresnape. Haresnape will join Gatehouse later this year. A Gatehouse spokesman declined to comment.
Yielders has claimed to be the first UK Fintech company gaining a Sharia Compliance Certification. The equity-based property crowdfunding platform, founded by Irfan Khan, successfully completed the independent sharia certification conducted by IFC. Achieving the certification means that Yielders may significantly expand its market presence by operating across Asia, Europe, and the Middle East. Being compliant with FCA regulation, Yielders offers the opportunity for the public to invest as little as £100 towards buying a share of a crowdfunded property. Yielders explains that the UK Islamic market is one of the largest, most vibrant and dynamic outside the Middle East. Ethical Islamic investment is described as being crucial to the Yielders’ philosophy. Yielders only offer pre-funded investments to the retail crowd, meaning the assets are already generating an income.
The University of East London Centre for Islamic Finance, Law and Communities held a public lecture on 22 February 2017 focused on FinTech in Islamic Finance. The keynote speaker was Professor Volker Nienhaus. Professor Nienhaus dealt with four topics: Islamic FinTech and crowdfunding regulations, Shari’ah limits to innovation in FinTech, Shari’ah encouragement for FinTech solutions and the potential disruption of Islamic consumer banking by genuine trade credit. Nienhaus predicted that Islamic consumer banking could be disrupted in the future by genuine trade credit. Islamic-compliant cash rich e-commerce platforms could provide financial services equivalent to Amazon or Alibaba on a Shari’ah-compliant basis. These platforms could sell halal goods and approve Shari’ah compliance. These platforms could instantly check the credit worthiness of buyers and would have a higher credit risk tolerance than traditional banks.