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Will #Iran’s banking sector collapse?

Financial experts are warning that Iran’s banking sector is at risk of a collapse due to toxic assets. It is no secret that over the past decade all Iranian banks were negatively affected by sanctions, internal mismanagement and corruption. Another disturbing factor in the financial sector has been the presence of unlicensed financial institutions. Government interference has led to the accumulation of tens of billions of dollars of bad debts that will continue to put pressure on the balance sheets of Iranian banks for some time to come. Besides the high ratio of nonperforming loans, Iranian banks have a high portion of overvalued and illiquid assets on their balance sheets that need to be adjusted. Now several Iranian banks are following government instructions and have started to sell their noncore assets. The Central Bank of Iran (CBI) will have no choice but to push for bank mergers and also to impose and implement tough regulations on the country’s banks in order to prevent a deeper crisis.

Iyad Asali, General Manager, Islamic International Arab Bank: Interview

In this interview, Iyad Asali, General Manger of Islamic International Arab Bank speaks about the future of Islamic banking in Jordan. The Central Bank of Jordan (CBJ) reported that 69% of the population in Jordan are financially excluded. This gives Islamic banks an opportunity to develop new financial services for this segment. Jordan’s Islamic banks are currently trying to take advantage of this situation to raise awareness of their services. They are also working to improve financial literacy through media, events, social networks and conferences. Over the past five years Islamic International Arab Bank has developed a new framework for sharia-compliant SME financing in coordination with the CBJ. This cooperation led to the founding of an Islamic tool for mobilising funds to SMEs at subsidised costs and the establishment of a sharia-compliant fund to guarantee start-ups financing. This programme empowers a large segment of SMEs across various sectors, especially those owned by young entrepreneurs and women, and those located outside Amman.

Lessons Learned in Designing an App to Build Financial Health

CFI and the Microfinance Centre (MFC) in Warsaw are working together to build a smartphone application to assist customers and improve their financial health. As part of the project, a simple financial health quiz was developed which will serve as the foundation of the application. Customers appreciated concrete, practical advice, particularly with regard to short-term money management. Instead of simply hearing what they "should" do in general terms, consumers want advice on "how" to do it. They also want help to prioritize among the many possible actions they could take. Too many tips can leave people overwhelmed and paralyzed. Users indicated that games, other quizzes, and memorable stories would help guide behavior and motivate ongoing engagement. The ability to print out tips, tools, advice, and a calendar for budgeting was suggested.

Islamic Development Bank grants $63.3 million to #Sudan

The Islamic Development Bank (IDB) signed a grant agreement worth $63.3 million for the establishment of facilities and services in South Darfur, Sudan. Earlier this month, the IDB agreed to lend Tunisia $185 million to finance developments including an electricity project. The bank agreed to finance an electricity link worth $150, as well as the construction of hospitals in Kasserine and Kef worth $34 million. The IDB is a Jeddah-based multilateral development financing institution. It began its activities in 1975. The present membership of the bank consists of 57 countries.

Richest 1% to own two-thirds of world's wealth by 2030: new study

As the wealthy continue to accumulate money faster than average income earners, the rich-poor divide will only widen over the next few years. According to the latest research by the UK’s House of Commons, in 12 years' time more than two-thirds of the world’s wealth will be in the hands of just 1% of the population. The remaining 99% have seen their wealth grow at a lower pace of only 3% per year. There are no similar analysis to determine the rich-poor divide within the UAE, but Dubai is increasingly becoming a magnet for the world’s wealthy. According to Knight Frank’s Wealth Report, the population of ultra-high-net-worth individuals (UNHWIs), each owning at least $30 million in assets, is expected to jump by 60% by 2026. Dubai is home to the highest concentration of millionaires and multi-millionaires and UNHWIs for any city in the Middle East.

How #cryptocurrency traders are wooing Islamic investors

The global surge of interest in cryptocurrencies extends into the Gulf and Southeast Asia, the main centres of Islamic finance. However, many Islamic scholars argue that cryptocurrencies are not religiously permissible, as they are products of financial engineering and objects of speculation. UAE-based OneGram is issuing a gold-backed cryptocurrency, which is certified as valid by Islamic advisors. Each OneGram cryptocurrency unit is backed by at least a gramme of physical gold stored in a vault. Tens of millions of dollars worth of the currency have been issued so far. About 60% of the planned number of coins remains to be sold. In Malaysia a similar initiative was launched in October. HelloGold launched an initial offer of its gold-backed cryptocurrency and received approval from Amanie Advisors. Among other experiments, UAE-based Halal Chain conducted an initial coin offer in December which is linked to data on Islamically-permissible goods.

MENA #fintech sector to attract US$2.5bn in deals by 2022, study finds

According to MENA Research Partners (MRP), the current MENA fintech market is estimated at US$2bn and expected to witness an annual growth of US$125mn until 2022. MRP CEO Anthony Hobeika said that the funding of fintech changed a lot in the last 6 years. While in 2010 funding was provided exclusively by venture capital firms, new funding vehicles such as accelerators, private equity institutions, corporation, banks and angel investors are showing interest. Up until recently, banks considered fintech as a competitor. Now banks are acquiring, partnering and also sponsoring fintech companies. As an example, some GCC banks collaborated with specialised fintech startups to implement the new VAT regulations.

Industry body AAOIFI close to finalising #standards for Islamic endowments

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is close to finalising governance and sharia standards for Islamic endowments, known as awqaf. Deputy Secretary General Omar Mustafa Ansari said the development of an accounting standard for awqaf was underway. A governance standard for awqaf would provide guidance on internal controls, policies and procedures, transparency and disclosures. According to a Dubai government estimate, awqaf may hold around $1 trillion in assets around the globe. Most awqaf do not disclose full financial figures, although their underperformance is believed to be considerable since they are run by administrators rather than return-oriented investment managers.

Islamic Scholars Debate Validity of #Cryptocurrencies

The world's top Islamic finance scholars are scrutinizing the validity of cryptocurrencies. The discussions are part of the annual sharia conference of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) being held in Bahrain this week. The key question for scholars is whether cryptocurrencies fall under the so-called "ribawi" category, which includes commodities like gold and silver. AAOIFI primarily issues accounting and sharia standards for Islamic finance institutions, but there is no current indication on cryptocurrencies. Scholar deliberations, however, could clarify what types of cryptocurrencies are religiously acceptable and influence future product development.

A 200-year-old idea offers a new way to trace stolen bitcoins

Bitcoin's blockchain provides evidence of every Bitcoin transaction that's ever taken place. Many of the transactions recorded on that distributed ledger are crimes. But a group of Cambridge cybersecurity researchers argues that one can still distinguish the contraband coins from the legitimate ones. Based on a legal precedent from an 1816 British court decision, they say that the first coin that leaves a Bitcoin address should be considered the same coin as the first one that went into it, carrying with it all of that coin's criminal history. The Cambridge researchers have gone so far as to code a proof-of-concept software tool, which they plan to release later this year.

#Malaysia can be Islamic #fintech leader, says Fitch Group unit

According to research agency BMI, Malaysia has the potential to be a world leader in Islamic financial technology (fintech). The research firm said Malaysia’s Islamic banking sector was worth US$202 billion last year, while its Islamic loans also more than doubled to 30.2% the same year, compared to just 7.8% a decade ago. BMI noted Malaysia has a developed infrastructure, an increasingly affluent and tech-savvy population, and high mobile and broadband penetration rates coupled with fast internet speeds. The Memorandum of Understanding between MIMOS and the International Center for Education In Islamic Finance (INCEIF) has laid down the foundation for the development of Islamic fintech in Malaysia.

Jaiz Bank, IDB Sign $20m SMEs Financing Deal

Jaiz Bank and Islamic Corporation for the Development of Private Sector (ICD) have signed a $20 million line of agreement to finance the Small and Medium Sized Enterprises (SMEs) of Nigeria. The financing deal covers sectors such as industry, communications, technology, health, manufacturing and agriculture. Hassan Usman, Managing Director of Jaiz Bank, signed on behalf of the bank while Okan Altasil, the Regional Office Director of ICD, signed for the corporation. The ICD management said the reason for extending such financing to some Nigerian banks was because SMEs have crucial role to play in a country’s growth and development. The ICD had previously extended a total of $120 million line of financing facility for the development of SMEs in Nigeria.

#Saudi- Finance Minister heads the Kingdom's delegation to the 43rd Islamic Development Bank board of governors Annual Meeting in Tunis

Saudi Finance Minister Mohammed Al-Jadaan will head the Kingdom's delegation to the 43rd Annual Meeting of the Board of Governors of the Islamic Development Bank between April 4-5 in Tunis. The Saudi delegation will include Dr. Ahmad Al-Khulaifi, Governor of the Saudi Arabian Monetary Agency (SAMA), Dr. Hamad Al-Bazie, Vice Minister of Finance, Eng. Yousef Al-Bassam, Vice President and Managing Director of the Saudi Fund for Development (SFD). The IDB annual meeting's agenda will comprise of discussion sessions about the 2017 IDB activities report, IDB's institutions annual report and the establishment of the Islamic Solidarity Fund for Development (ISFD). The ISFD aims to alleviate poverty, develop capacity, and eradicate illiteracy, diseases and epidemics in member countries via funding various productive, social and service projects and programs.

The rise of Muslim #Millennials and what it means for Islamic finance

Millennials are the generational demographic bracket following Generation X, which was a more consumerist, independent-minded age cohort. In the Muslim world, the Arab Spring, the Global Recession and other developments like dropping oil prices had major impact on this generation. A study by credit card firm Visa showed that Millennials make up the fastest-growing consumer segment in the GCC region. Visa estimates that Millennials in the UAE will receive an average income of $40,000 annually by 2019 which naturally makes them an important customer segment for banks. Millennials are generally savvy with digital technologies and the sharing economy. They have a more liberal approach to economics, which means that they are generally not brand-loyal but rather look for the best deal. Muslim Millennials are truly asserting their needs in Islamic finance, as they do in halal travel, food, media and fashion. For Islamic banks, this means that laggards will lose out on this very important customer segment, if they do not invest in their digital banking solutions.

And The Country With The 'Most Expensive' Plate Of Food Is...

A report from the World Food Programme (WFP) analyzed the glaring gap in food costs around the world. The report points out that people living in poor countries have to spend the bulk of their wages on basic nourishment. The research measured the proportion of daily income that people spent on ingredients for a basic bean stew in different countries last year before retro-projecting the ratio on to a resident of New York State. An average person living in New York State would spend about 0.6% of his or her daily income on ingredients for a bean stew, approximately $1.20. Someone living in South Sudan would have to work for a day and a half to afford a basic meal with the cost of the ingredients 155% of daily income. The real price of a plate of bean stew in South Sudan would be $321.70, so many of the country's inhabitants are struggling to feed themselves.

Islamic Development Bank aims to empower women

The Islamic Development Bank (IDB) aims to improve women’s access to infrastructure that will offer economic opportunities through Islamic microfinance. IDB president Bandar Hajjar was speaking at the "Partnerships for Promoting Women’s Economic Empowerment" session at the 43rd annual IDB meeting in Tunis. He said the empowerment of women was at the core of the Bank’s development strategy. He announced that to achieve this, the bank would launch a new initiative called "SheCan". He also stressed the bank continued its regular operations to empower women in priority sectors, such as energy, education, transport, health and Islamic finance. Representatives of 57 member states, senior government officials and ministers of finance, economy, planning and international development are attending the five-day meeting in Tunis.

Why Is Financial Inclusion in #Nigeria Lagging Compared to Its African Peers?

According to InterMedia’s Financial Inclusion Insights (FII) 2016 Annual Report, the number of adults who are considered financially included in Nigeria has not improved since 2014. Financial inclusion in Nigeria dropped slightly from 37% in 2015 to 35% in 2016, lagging behind the three other African countries of the program. In 2016, 69% of Kenyans, 54% of Tanzanians and 40% of Ugandans were financially included. The 2016 FII data found that more than half of Nigerian adults do not have access to financial services. FII data suggest that even when they have access, many Nigerians lack the basic resources and key skills that facilitate financial inclusion. In 2016, decreases in bank account ownership drove an overall drop in financial inclusion. In Nigeria, the population continues to work in the cash-based informal sector.

Tunisia to host Islamic Development Bank annual meeting

The annual meeting of the Islamic Development Bank (IDB) Group will be held in the first week of April in the Tunisian capital, Tunis. Fifty-seven ministers of economy and finance of member countries and about one thousand experts, economists and financiers will attend the meeting, which takes place between April 1 and April 5. There will also be a signing ceremony of financial partnership agreements between the IDB Group and some member states, including Tunisia. The IDB Group formally opened in 1975 and currently has 57 member states.

WGC, IIFM to develop #standards for gold-based Islamic contracts

The World Gold Council (WGC) and the International Islamic Financial Market (IIFM) plan to develop a series of standard templates for sharia-compliant gold contracts. Gold had traditionally been classified as a currency in Islamic finance, but new guidance has opened the door for a wider range of products. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) developed a sharia standard for gold in 2016. The proposed contract templates from IIFM would add to those efforts by standardising the operational aspects of gold transactions. Natalie Dempster, managing director of central banks at the WGC, said the new standards would include physical allocation of gold, confirmation of ownership and spot transactions. Allocated gold agreements, consignment agreements, swap product confirmations and other gold-based products were also discussed at the consultation meeting, which was hosted by Borsa Istanbul, Turkey.

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