Islamic economics

The Muslims News.

Microfinance tackling poverty

“Microfinance is a useful weapon in tackling poverty. Muslim Aid has changed the lives of tens of thousands of people in the world with its unique microfinance model. Microfinance provides a stepping stone for someone who needs that opportunity” said Sir Iqbal Sacranie, Chair for international development agency Muslim Aid.

Microfinance offers small loans and grants to individuals to develop businesses in poorer countries who are unable to apply for conventional loans which are asset based and require high interest payments.

An event titled ‘Microfinance in the Islamic world’ was held by the All- Party Parliamentary Group on Microfinance/Micro credit on July 9 at the House of Commons. It focused on the compatibility of microfinance programmes with Islamic financial principles and their impact on the Muslim community. Microfinance practitioners, academics and NGOs were invited.

The approach of Muslim Aid is to provide loans which are tailored to the individual and are interest free. The organisation is working in 70 countries around the world providing emergency relief and long term development projects. Its Microfinance programmes operate in countries such as Bangladesh, Somalia, Pakistan, Cambodia, Indonesia, Sri Lanka and Mexico.

alburaq launch Shari’ah compliant savings product

alburaq, the lead provider of Islamic home finance, launched last month the UK’s “first retail Shar’iah compliant alternative to a guaranteed equity bond.”
With a minimum investment of just £500, the alburaq savings plan provides a new way for those wishing to invest in accordance with their faith and provides savers easy exposure to potentially unlimited returns linked to shares in major companies, all with the added comfort of capital protection and Shari’ah compliance.

Head of alburaq at ABC International Bank, Keith Leach, said: “alburaq is very excited to be the first to bring a Shari’ah compliant capital protected product to the retail market in the UK. This new account is an easy way for Muslim savers to gain exposure to the equity markets, in a secure way.”
The product has been developed and will be marketed by alburaq and is offered in partnership with the Bank of Ireland who has a long history of providing guaranteed equity bonds to UK consumers.

Chief Executive of Bank of Ireland UK Financial Services, Des Crowley, said: “Bank of Ireland is delighted to be involved with alburaq in bringing to market the alburaq Savings Plan. This is a highly innovative product, the first of its kind and directly addresses the saving needs of the Muslim Community.”

Savers will be able to deposit funds with the Bank of Ireland for five years in an account structured following the Islamic principles of Wakala. At maturity savers will receive their initial capital back together with 100% of any gain in the performance of a basket of 20 shares in global companies selected from the Dow Jones Islamic Titans 100 Index.

UK Govt announces response to Sukuk consultation

Economic Secretary and City Minister, Kitty Ussher MP, announced last month the Government’s response to the consultation on a sterling Sukuk issuance saying the Government favoured a ‘bill-like’ Sukuk programme which could be fully integrated with the conventional Treasury bill programme.

Chairing the third meeting of the Islamic Finance Experts Group, Ussher said that, were the remaining barriers to be surmountable, a rolling programme of up to around £2 billion of ‘bill-like’ Sukuk issuance would be achievable over time. She added that the group will publish a UK strategy paper on Islamic Finance within the next year.

Kyrgyzstan to adopt Malaysia’s model of Islamic economy

The Kyrgyzstan Government plans to introduce takaful (Islamic insurance), Islamic bond and production of halal products after having introduced Islamic banking one-and-a-half years ago, said Shamil M. Murtazaliev, advisor to the President of Kyrgyz Republic on June 28.The republic has undertaken a pilot project to implement Islamic bank as part of the republics adoption of a dual banking system comprising Islamic and conventional. The conversion was assisted by two experts, one of whom is a Malaysian.

Dubai World

Dubai world said that it has committed $4 billion for various projects in Africa. These Developments include tourist resorts and posts in countries such as Djibouti, Senegal, Rwanda and South Africa.

Comoros to become ICD member

Albania and Comoro Islands have both signed agreements of accession to become members of the Islamic Corporation for the Development of the Private Sector (ICD), a member of the Islamic Development Bank Group (IDB), the 8th General Assembly of the IDB in Jeddah heard.