IslamicFinance.de

Dear Reader,

The issue of debt vs. equity is now going to be increasingly recognised - in microfinance - as I found out today on the cfi blog:

"Debt to Equity. The demand for equity and subordinated debt is huge and continuing to grow, mainly coming from mature MFIs. More MIVs are moving away from debt toward equity, being driven in part by a desire to be more involved in governance, to play a larger role in risk management, and because the regulators are requiring more capital. Also, fund investors increasingly want to know how much of a fund’s return is coming from debt versus equity. Some of the larger DFIs need to disburse large amount of funds, so they have to make debt investments, leaving an unmet demand for equity."

http://cfi-blog.org/2012/11/19/microfinances-new-normal/

An important food for thought beyond microfinance itself in my opinion.

Best regards,

Michael Saleh Gassner

According to the Raja Muda of Perlis, Tuanku Syed Faizuddin Putra Jamalullail Sunday, private corporations should seize the opportunity to be creative in performing their Corporate Social Responsibility (CSR), thus enhancing the future of their companies as well as their current reputation. At the CSR charity sale, which was organized by Malaysia Industrial Development Finance Berhad (MIDF), he said that he was certain of the growth of popularity of the company through this event. The charity sale was made possible in collaboration with the Perlis Islamic Religious Affairs and Malay Customs Council.

The only tool (of interest rate) for RBI to control liquidity for balancing inflation and growth rate is not enough resulting in the inability to allow India grow better without inflation. Trying to exert control on inflation, RBI fails in terms of interest rate and the country's economic growth tumbles. According to RBI Governor, growth rate will decline and there will be an increase in inflation. He further indicates that in 2013 inflation is expected to rise in the third quarter followed by an ease in the fourth quarter.

Kuwait Finance House (KFH) showed its support for the Diabetes Day by organizing activities through a small clinic at Baitok Tower. KFH employees and other visitors are permitted to conduct blood tests for diabetes. Also, awareness regarding the disease and means to prevent it is raised in this way. Thousands of patients and their families are targeted by the activities organized by KFH in support of the Diabetes Day. In addition, illuminating Baitok Tower in blue shows support to millions of patients worldwide.

Dear Reader,

The German language book on Islamic finance by the Editor of IslamicFinance.de and Dr Wackerbeck from Booz Consultants is now translated to Chinese.

Please find the biographical information below:

Authors: Michael Gassner / Philipp Wackerbeck
Title: Islamic Finance – Islam-gerechte Finanzanlagen und
Finanzierungen
ISBN number: 978-7-5139-0217-5
PUBLISHER: Beijing - Democracy and Construction Press
Pre-Publication Date: 2012.7

Full biographical details: http://db.lib.bua.edu.cn/asord/asorditem.php?asord_marc_no=0001344540

Orders: http://www.amazon.cn/%E4%BC%8A%E6%96%AF%E5%85%B0%E9%87%91%E8%9E%8D-%E7%B...

Book review about the German language original: http://www.rpi-virtuell.net/workspace/24686AD5-936C-476D-9EA0-65E2968590...

Best regards,

Michael Gassner

Eman Al-Shemmari, the head of Nuclear Medicine Sections at the Ministry of Health, expressed his admiration for Kuwait Finance House (KFH) and its actions to sponsor the Nuclear Medicine International Week. The event took place under the auspices of the Minister of Health Ali Al-Obaidi and included a number of scientific lectures in the mentioned medical field. The lectures were held in several hospitals in Kuwait. According to Al-Shemmari, KFH is largely responsible for the success of the event and the enrichment of the medical cadres and public.

Islam stresses on the necessity and importance of environmental protection and advocates that people should live in harmony with nature. Moreover, sustainable development, enrichment of life on earth, and optimal use of available resources are pointed out as key issues. Apart from the relationship between Allah and man, and between peoples, Islam provides guidelines on the way to deal with environment and natural resources. Islam describes the relationship of man towards the earth as that of a custodian.

Well, repeatedly we read and hear about the lack of profit/loss sharing (equity finance) in Islamic finance. Here my five cents about it:

1) Islamic commercial law, Fiqh Muamalat, per se has no preference of either permissible mode of finance, be it musharaka, ijara or murabaha whatsoever. All is halal. However, the call for modesty of debt in many hadith and the seriousness of being indebted upon death (withholding of death prayer) shows a call for a solid equity portion in business; let's call it a technical preference.

2) If we look up all debt financing modes (e.g.Murabaha, Ijara) there are remaining difficulties to finance wages, rents and installments on fresh debt. This is a true indicator for a required minimum amount of equity in a company.

3) Point 1) and 2) leads us to demand a sound debt/equity ratio.

IslamicFinance.de offers an overview about new job openings of October 2012 herewith - firms aiming to be included please send a job profile/hyperlink to newsdesk@islamicfinance.de - the full details of the advert has to be accessed by the hyperlink below the brief description:

Product Manager, Islamic Banking

Standard Chartered Bank - United Arab Emirates-SCB (United Arab Emirates)
Job Description
?Development of Islamic wealth products across CBMS, insurance and investment streams to create customer value proposition.
?Ensure successful implementation of the Islamic banking strategy across high value segment.
?Concentrated responsibility to work with the Priority/Wealth/Private/SME product/frontline teams and support functions to build on the current Islamic banking capabilities and to create seamless customer experience
?Act as a product specialist for RMs on client meetings to introduce and explain the Saadiq solutions to meet their needs
?Financial budgeting and business forecast. Evaluation of financial performance.

Abu Dhabi will be the host of the annual general meeting of the World Future Council (WFC). The event will be held in the Middle East for the first time in the coming month. Prominent personalities from all over the world will take part in the discussion of the interests of future generations in sustainable policy-making. The title of the meeting is ‘Securing Our World: The Crucial Next 5 years’ and it will be conducted from November 21 to 25. WFC has had success in inspiring a number of governments to frame legislations and policies in order to conserve natural resources.

Read more on: http://gulfnews.com/news/gulf/uae/environment/abu-dhabi-to-host-sustaina...

According to expectations, financing SMEs shall be a measure to deal with unemployment in the MENA region. Reports suggest rapid growth of the market share of Islamic banking in Egypt due to the change in public policy. Smaller markets such as Oman and Morocco are also considered important in this context. Observers point out that Islamic finance is a potential source of spurring economic growth in the countries which experienced the Arab Spring. However, it is highly doubtful whether Islamic finance can solve the unemployment issue especially among young people. The question is rather if it should make conscious efforts to contribute to dealing with unemployment as part of its business strategy instead of a byproduct of its activities.

FAB has been working with volunteers from Credit Suisse who helped dig deeper into the assumptions behind FAB and identify cutting-edge research on child and youth finance. The Financial Access at Birth initiative's aim is to equip every child in the world with a funded savings account at birth.

More on: http://cfi-blog.org/2012/09/27/child-and-youth-finance-governments-step-in/

On Monday Movement for Islamic Culture and Awareness donated a set of orthopedic surgical equipments to the department surgery, Lagos State University Teaching Hospital.

The items are automatic, used for most open reduction/internal fixation and implant procedures, for deformity correction procedures and others.

More on: http://www.ngrguardiannews.com/index.php?option=com_content&view=article...

Saudi management company SEDCO Holding has started its corporate social responsibility program - Riyali. The program adresses the educational needs of the Saudi population in terms of financial literacy and aims to give people the financial skills to achieve a desirable standard of living. In the first phase of this program students will be the subjects.

The Convergences 2015 world Forum for the Millennium Development Goals will be on in Paris from 19-21 September 2012. It is a main event for all professionals interested in discussing innovative answers to reduce poverty in Europe and around the world.

Saudi Arabia has recently introduced several reforms which shall lead to greater certainty and predictability on the market. Due to them, several new committees shall be created with aim to restructure the Saudi Arabian judiciary system and make the decision-making system more clear. The duration of banking disputes has been limited to five years after the date of knowing the incident that gave rise to the dispute.

The UAE central bank wants lenders to extend maturities on certain personal loans held by UAE citizens by more than five years. In the latest circular sent to banks, the regulator wishes to reschedule citizen's loans by more than 48 months if the repayment exceeds 50% of gross salary and other income. This is to help UAE's citizens to carry high debt burden, since they took out massive personal loans during the boom years between 2003 to 2008 but found themselves unable to pay them back as the cause of global financial crisis.

Mercer plans to integrate its environmental, social and governance (ESG) ratings accros all of its manager-search and performance data. This should not only encourage reporting on ESG but also offer an objective approach that applies across wide range of strategies and so enable smaller clients to benefit from their service.

Redefinition of the banking landscape, especially with regards to the community and environment, will be the main topic of the 2012 Festival of Spirituality and Peace. Top-quality speakers will discuss on how to reestablish the connection between the money economy, local needs and productive activity in order to find new balance.

Despite the initial high optimism after Ali Abdullah Saleh's fall from power, almost half of the country's population suffer from starvation, says the World Food Programme. The appeals for humanitarian help made by Oxfam and Islamic Relief to the UN resultet in a minor raise of funds. Still, instead of $38m, the UN has decided on only $586m. Suggested reasons for this reaction are lack of media coverage, associations with al-Qaida and lack of political sway as well as donor fatigue.