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Stability during financial crisis lends momentum to Islamic banks

Despite past failures said Islamic finance has strong potential to become more prominent in the Canadian market

By Megan Harman

Islamic banking institutions have weathered the global financial crisis better than their conventional counterparts and are rapidly gaining momentum worldwide, but the sector in Canada continues to face considerable headwinds, a panel of experts said on Monday.

At an Islamic finance conference in Toronto on Monday, speakers commended the impressive performance of Islamic financial institutions and investment products during the financial crisis.

“Islamic banks have been more resilient,” said Shahzad Siddiqui, a Toronto-based author and lawyer with expertise in Islamic finance.

The speakers partly attributed the resilience of the sector to the fact that Islamic banking institutions – as part of their compliance with Shariah law — avoid high levels of leverage and risk, and avoid engaging in speculation. As a result, these institutions have a higher level of stability than many conventional financial firms.

Shariah-compliant investment products also avoid these riskier practices, and as a result, are often less volatile than conventional products. These stable features have helped these types of products gain popularity – among Muslim investors and non-Muslims alike – during the volatile market environment of recent years.

As an example, two Shariah-compliant mutual funds operated by Washington-based Amana Mutual Funds Trust have seen their assets under management surge in recent years to US$2.8 billion. Even though the funds are designed to be compliant with the principles of Islamic faith, only a small proportion of their investors are Muslim, according to Stephen Ranzini, president and CEO of Michigan-based University Bank, which has an Islamic banking subsidiary.

“The results were so compelling that the business found them, and so today, 90% of the customers are non-Muslim,” he said.

The panelists noted that Shariah-compliant mutual funds in Canada have not generated this level of interest, and as a result, many efforts to launch these types of products have failed. Ranzini said that in order to be successful, it’s critical for Shariah-compliant products to have appeal among the broader population – not just the Muslim population.

“You have to have a product that’s fundamentally profitable, and good,” he said.

In addition, he noted that these types of products tend to take time to become profitable, and as a result, require very patient capital.

“You have to have the patient capital behind the product, because this is not going to turn [a profit] in a year or two, or five,” Ranzini said.

He suggested that past failures of Shariah-compliant products in the Canadian market may have resulted from firms failing to provide a sufficient period of time for the products to generate assets.

Other challenges for the Islamic finance sector in Canada include a lack of standards and regulatory oversight; and a lack of education among investors and industry members, the panelists said.

They called for the financial services industry to make Islamic finance education and training more accessible to employees.

“Education is extremely important,” said Ayse Yuce, a professor of finance at Ryerson University.

Despite these hurdles, the panelists said Islamic finance has strong potential to become more prominent in the Canadian market.

“On the retail side, with the Muslim community doubling every 10 years, we see a sizeable market,” said Omar Kalair, president and CEO of UM Financial, a Toronto-based firm specializing in Islamic finance. He expects to see a growing number of Shariah-compliant financial product offerings in the years ahead.

source : investment exe.(canada)

Islamic finance: Can it save Western banks?

The question whether the Islamic finance can save the Western banks or not is highly spoken nowadays in the global economical crisis.

The rules are simple, no dealing in alchohol, pornography or anything deemed morally harmful coupled with no interest and you have the foundation for an Islamic financial system, which has been able to withstand the current economic meltdown, presenting Islamic banks with a unique opportunity to flourish.

Unlike banks in Western economies, Islamic banks have been delt less of a blow by the financial crisis and experts believe it is because the laws followed are based on those set out in Islam’s Holy book, the Quran, which for Muslims is the word of God.

No interest and risk sharing

Islamic banks do not borrow in interbank markets as their funds are from their own deposits and they do not hold toxic collateralized debt obligations. Furthermore Islamic law forbids interest and encourgaes risk sharing, which means that any investment, profit or loss, is shared by both the bank and its clients.

The fact that Islamic banks have seen minimal adverse effects from the crisis has made them more attractive to investors, especially in the Gulf Cooperation Council (GCC), who watched the value of their investments in conventional banks plummet, according to a new report, named The development of Islamic finance in the GCC, from the London School of Economics and Political Science (LSE).

“There has been much questioning of the values underpinning the conventional financial system, and the search for alternatives means that Islamic banks are likely to receive more attention, especially as their raison d’être is morality in financial transactions, based on religious teachings,” said author of the report Professor Rodney Wilson, who wrote the report for LSE’s Kuwait Programme on Development, Governance and Globalization in the Gulf States.

The demand from the world’s 1.3 billion Muslims for investments that comply with their beliefs means assets that comply with Islamic law range between $700 million and $1 trillion, with some estimates seeing assets growing to $1.6 trillion by 2012.

The value of Shariah-compliant assets in the GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, amounts to more than $262 billion.

“The increasing international respect for Islamic finance has been noted in the GCC, and this should encourage local acceptance by both governments and bank customers, not least because no Islamic bank has failed in the crisis and required a substantial government bail-out,” Wilson said.

Linking the West with Shariah

Wilson said the GCC’s position in the heart of the Muslim world made the area a strategic hub that could link Islamic finance to Europe, Asia and Africa and argued the spread of subsidiaries of GCC-based Islamic banks was an indication that it was already happening.

However, regulatory differences and harmonization among different schools of thought, are just some of the main obstacles of Islamic banking as it looks to grow into a cross-border system, mainly targetting European countries with large Muslim communities.

As the industry expands into non-Muslim or secular states, the need to educate others about the sector has become greater.

In a sign that cultural barriers may be coming down, this week a London-based training program was launched by the Lord Mayor of the City of London, Ian Luder, to enable the European financial hub to better cater to the requirements of Islamic finance.

“Despite the current global financial crisis, Islamic finance continues its growth as an increasingly viable alternative banking system for both Muslims and non-Muslims. It will be a vital component of the new global financial infrastructure,” Luder said.

The program, which will be run by the Islamic Banking Finance Center U.K., was established to provide research and training for private and public organizations such as insurance companies, banks, non-financial businesses and academic institutions.

“The Islamic finance sector is expanding at an exponential rate…due to its strong financial principles and ethical values, which prohibits the charging or paying of interest and encourages mutual risk and profit sharing between parties,” Akmal Hanuk, chief executive of IBFC-U.K., said.

source : tkbb

‘Banks poised for growth in aftermath of financial crisis’

 

Bankers and experts said making use of the still largely untapped resources of Islamic finance and banking is an optimal solution in light of the global economic downturn.

Islamic banking and finance proved to be the least vulnerable to losses and the least affected by the negative impact of the global financial crisis and promises major opportunities for growth, they said at the inauguration of the first Islamic Finance and Investment Forum for the Middle East, held on the eastern shores of the Dead Sea at the beginning of march.

“In this challenging global economic and financial environment, Islamic finance has remained dynamic with a steady pace of innovation and growth,” Central Bank of Jordan (CBJ) Governor Umayya Toukan said at the inauguration of the two-day forum.

“The accelerated development of the Islamic financial markets and the supporting international Islamic financial architecture as well as the trend towards greater liberalisation have enhanced the integration of Islamic finance into the international financial system,” he added.

In order for Islamic finance to truly become international, allowing its share to go beyond its present level of around 1 per cent of all global banking activities, Toukan stressed that its standards should be consistent with international benchmarks such as Basel II.

Fouad M. Alaeddin, Middle East managing partner head of markets, told The Jordan Times that Islamic banking has great potential, especially since the sector was less impacted by the crisis than the conventional banking sector.

“There is a huge potential for growth in the Islamic banking sector. It is safer as it is asset-based and does not rely on derivatives, etc… and it also takes share in the risk. In addition, the whole concept of Islamic banking goes with stricter banking regulations, which seems to be the trend after the crisis,” Alaeddin said in remarks following the inauguration of the event.

“The sector is still somewhat new as it is about 30-40 years old and is still untapped,” he added.

According to Minister of Finance Mohammad Abu Hammour, the Islamic banking sector witnesses an annual growth rate of 10-15 per cent and there are currently over 300 Islamic banks in more than 50 countries. There are also more than 250 investment funds that operate in accordance with Sharia rules, with total assets of about $850 billion.

In Jordan, there are currently two Jordanian Islamic banks with assets amounting to around 11 per cent of the total assets of the banking system, deposits with a market share of around 12.5 per cent of total bank deposits, and credit facilities accounting for around 15 per cent of total bank credit, according to Toukan.

Two new Islamic banks were recently granted licences to operate in Jordan: Jordan Dubai Islamic Bank, which started its operations in Jordan in January 2010, and Al Rajhi Bank from Saudi Arabia, which is expected to start operating in the next two months, Toukan added in his speech.

In a speech read on his behalf by the ministry’s secretary general, Abu Hammour stressed that the developments the Islamic banking sector has witnessed in the past 40 years are “pioneering” and “unprecedented” in the modern financial market.

According to Abu Hammour, experts agree that Islamic banks, when compared to conventional banks, managed to avoid the consequences of the global financial crisis that affected many countries and caused many banks to collapse.

The minister called on Islamic banks to seize the opportunity created by the crisis by creating international investment banks that provide a new vision to the world and continue development and modernisation in their services.

It is also important to foster and strengthen the Islamic financial industry to be able to maintain its growth and to utilise the money available in the Arab and the Muslim worlds, he added.

In a speech at the forum, Moussa Shehadeh, deputy chairman of the Jordan Islamic Bank board of directors, reviewed obstacles facing the Islamic banking sector and called for supporting it and taking the “special” situation of these banks into account.

In this regard, Toukan said the Islamic banks in Jordan should have special treatment in terms of monitoring and international auditing standards, adding that the CBJ is working on these aspects so the Islamic banking industry assumes a larger role in the global banking system, the Jordan News Agency, Petra, reported.

He said if the situation necessitates having special legislation for the Islamic banking industry, the CBJ is ready to look into that.

Experts from several countries are taking part in the event, where several issues of concern to Islamic banking and finance will be discussed.

source : jordan today

Islamic banking defies crisis with global launches

More Islamic banks and financial products have been launched worldwide since late in 2008 despite the global banking crisis that restricted conventional banks from doing so.

Joseph DiVanna, managing director of UK-based consulting and advisory firm Maris Strategies, said in this month’s issue of The Banker that Shariah-compliant banks were performing better than conventional banks.

Islamic banks focus on ethical investing; speculative financing and trading is forbidden. This makes Islamic banks highly dependent on customer deposits for their liquidity.

“This in turn makes them less susceptible to changes in credit markets,” according to DiVanna.

South Africa stands to benefit from Muslim investors who want new markets in southern Africa, which presents one of the best platforms on the continent for growth in Islamic banking products following the regulatory restrictions that were put on these products.

This could be the reason Absa Capital, the investment banking division of Absa, launched South Africa’s first Shariah-compliant equity-linked exchange traded fund (ETF) on Thursday.

The banking group said that the initial public offering for the NewFunds Shariah Top40 index ETF had opened on Monday. The ETF will be listed on the JSE on April 6.

The Shariah Top40 index ETF tracks the FTSE/JSE Shariah Top40 index, jointly established by London’s FTSE International and the JSE.

Vladimir Nedeljkovic, head of ETFs and index products at Absa Capital, said that the Shariah Top40 index ETF was a first for South Africa. It was expected to redefine the Muslim investment landscape in the country.

“This ETF is a cost-efficient, transparent and easy-to-access investment product that conforms to the principles of Shariah law,” said Nedeljkovic.

He expected the product to do well in a market that urgently required more local Islamic investment products to service the estimated 400 000 Muslim households in South Africa.

“The Shariah Top40 index ETF provides investors with diversified exposure to the broad market through investing in one Shariah-compliant ETF share and earning a market related performance,” he said.

Absa Capital’s NewGold ETF, the biggest ETF in the South African market with about R9 billion in assets, is also Shariah-compliant. It has been approved by the Shariah supervisory board.

“Islamic banks were generally not impacted by collateralised debt obligation or asset backed securities,” DiVanna said.

Since November 11, new Islamic banks had been formed, including the United Arab Emirates’ first Islamic commercial bank, the Ajman Bank.

DiVanna added that while banks in the developed world had curtailed their expansion, 23 Islamic banks had extended their operations into new countries such as Botswana, Iraq, Kenya, Malaysia, Pakistan, South Africa, Sudan and Syria.

Qatar National Bank opened a full-service branch in Singapore and the Arab Bank opened a branch, specialising in Islamic banking, in Qatar.

South Africa has been offering Islamic banking since 1989 and all big four banks are developing or offering Islamic products.

 

source : busrep

Islamic Finance Can Help Prevent Future Crisis

SOME of the features and underyling principles of Islamic finance may avoid or minimise the impact of future economic cycles, said the acting chief executive of the Centre for Islamic Banking, Finance and Management.

Makhtar Abdullah, who is a moderator for the 16th Asean Federation of Accountants Conference 2009, said, “The recent economic crisis which evolved around the financial system will further stimulate and hasten growth of Islamic finance as an alternative to the conventional system.”

He said the world is looking for alternatives in the wake of the crisis.

Now, he said, the push for Islamic banking will be faster and in bigger scale, so there will be more acceptance in the global economy.

The crisis, he said, might even be seen as an advantage for the Islamic banking sector as players were not directly affected.

Makhtar said on a global scale, education is still needed to get the knowledge and confidence across on Islamic finance.

“Everybody has to play their roles and Brunei is positively projecting the same image as after four decades of evolution, Islamic finance has a firm footing in developed markets globally,” he said.

Makhtar said the main feature of Islamic banking is that the foundation isn’t so much on liability and borrowing but more on the sharing of risks.

“It would be beneficial because customers would have a say in what they want and transactions would be more transparent as whatever business leads the financial institution wants to get involved. There will be more disclosure involved so it makes more sense to everyone,” he said.

In Brunei, Islamic finance has a good and positive image and the establishment of his group is part of the image Brunei is projecting.

“As people involved in Islamic banking work more with other global players their knowledge increases and (they) become more well trained with the proper infrastructure to accompany that,” he said.

Source : TBT

World economic crisis and the Islamic Economy: Realities and Illusions

 Global economic crisis is the event which outlined the framework very well, especially the profile of the leading geopolitical and geo-economic centers on the planet.  The collapse of several leading financial institutions in the U.S. cause a domino effect in the adjacent to these economies.  Logically, this proved to be the euro area and Japan.  Recession in these economic region is stronger as their economic development is practical for the most powerful economy in the world – the U.S..

 Subsequent developments in the Arab and Islamic capital market and commodity demonstrate once again that the economy has its own rules and logic.  It can not prevail over politics, or at least – is not able to fight artificial economic principles.  Changing the performance of Arab stock exchanges, particularly the Gulf, is in no way different from those in highly developed countries.  Until now, experts reported losses exceeding 180 billion dollars in the Gulf.  In net terms the largest they have in Saudi Arabia – about 150 billion, a percentage – in the United Arab Emirates.  The same applies to the largest market outside the Arab Gulf area – Egypt.  The value of the Egyptian national index over the past few days were reduced by about 10% per day.  However, state authorities refused to take special measures, de, as all officials claimed that the Treasury has enough cash to get to the bankruptcy of the banking system.

 The resulting economic events in the Arab world give reason to make some basic conclusions:

 1.  The economies of most developed Arab countries – those in the Gulf are very closely connected with the world and especially in the U.S. economy.  In fact, they have her appendix.  The accumulated revenue from the oil capital resources (several hundred billion dollars), however, is so large that whatever happens in some of the centers of the world economy, this huge mass of money can offset the impact.  By calculations of experts, the depth of the crisis in the U.S. and the Gulf States is proportionate.  Arab financiers have set October 6 as “black Monday” for local farms.  In this day only in the Gulf “have vanished around 150 billion dollars.”  U.S. lawmakers were forced to allocate 700 billion dollars to prevent the collapse of the national economy.  Most likely Congress will grant a new $ 150 billion for the same needs.  For countries exporting oil such measures will be needed despite the working capital of the local stock exchanges.

 2.  At the beginning of the crisis emerged a number of analysis and forecasts according to which the recession in the Arab world would not be significant due to the existence of so-called.  “Islamic banking system. Its adepts argued that it is built on principles that create a fully independent, the global economy and the traditional banking and financial system.  They constantly publish statistical data, according to Sharia finance is increasingly winning positions.  Scientific forum in Paris, in 2008 it was noted that the Islamic banking system, has working capital of 800 billion dollars.  It is expected that in 2010 it reached 1.4 trillion.  The size of the crisis in the richest and most obviously Islamic countries such as the Gulf countries, outlined the contours of the real and true meaning of “Islamic economics”.  If she has a burden, it is relatively modest and is mostly a political dimension.

 It is noteworthy that the quotes for “benefits” of the Islamic economy have disappeared from the major Arab financial publications.  Some of them, frankly secular in orientation, they were not even pay attention.  At the same time, Islamic preachers economically manipulative note speeches on the virtues of economy system of leading European editions, “Journal des finances”.  Mentions that the French Higher Council for Financial Supervision issued the license under which the country can apply Islamic principles in financial transactions on the local market.  Moreover, it was reported that one of the universities of Strasbourg considered to begin training students in the subject “Islamic economy”.  All these measures reflect the desire of the French authorities to attract more investment from Gulf states, and not reflect the existence of ideological or religious motives.

Arouse interest in the answer to the question of whether Paris wants to shift the position of London from the fringes of Islamic banking.  So far, this system is applied by individual intitutsii in 51 countries.  Understandable reasons in the first four centers are located in the Gulf – Dubai, Abu Dhabi, Manama and Doha.  British capital ranked fifth in the world with a concentration of Islamic banking institutions.

translated source : teamorientbg

The Global Financial Crisis Reinforces Calls For An Islamic Economy

Professor Vladimir Chukov

Although the first symptoms to overcome the acute financial crisis that engulfed the developed economies in the Muslim world, increased forecast that is the end of capitalism “.  Politicians, financiers and theologians increasingly active launch of the opinion that a matter of time western economy finally yielded to a new economic model.

Liberalism will have the same fate as that of Marxism. After a compromise was found Marxism total liberal hegemony, dominates the entire world. Liberalism has lost its moral stand.  Current economic earthquake is only a “financial bubble of the overall crisis.  The place of liberalism will be occupied by “Islam as a factor of development, consolidation and resistance.” 

Group of theologians from university Al Ahzar in Egypt are proponents of similar ideas.  Naturally, they tend to theorize more than personified future Islamic paradigm.  Expert theologians called to convene a meeting of specialists Global Congress of Islamic economics.  According to them it is high time to define the stages of institutionalization of shariatskiya business model to give a true alternative to the current crisis.

Member of the Association “Islamic studies” Dr Sheikh Abdel Fatah claimed that functioning economic models have failed because “based on interest and sale of virtual goods, the price the buyer can not cover.” According to Islamic investment are always liquid, unlike Western “He still reinsure with the argument that if during the past days had Islamic financial institutions were also affected by the crisis, it’s happened, since they only formally identified as Islamic.  Financier believes that in practice they operate with real instruments typical of Sharia.

Another economist, theologian, Sheik Youssef Badri, ensure that Islamic finance has been very accurate in their predictions.  Years ago, they analyzed the largest recession in the U.S. than 20 years of last century and predicted that after 90 years, capitalism will collapse. ”  Adopting the current crisis as “the beginning of the end”, Badri noted that the process has even begun two years earlier.  At the same time the expert makes sharp criticism against the “oil states”.  The latter have been warned that using too many “traditional” and not Islamic, financial rules.  Thus they have become the victim of a bank shot.

Specialist in economics Mahdud Zauaui the pages of Saudi website, Al mufakirat al-Islam raises the question: “When will come the Islamic alternative?” He remains cautious in its forecast.  The researcher describes the ideal Islamic version, in which state coercion is eliminated on human labor, characteristic of communist economic paradigm.  Zauaui noted that economic communism removes personal initiative and thus maintain low labor productivity.  At the same time, adepts of the economy off shariatskata total withdrawal of the state, because then “the greed of the business will rob labor of the producers.” He calls for a model, whose prototype was the Bank of the poor “Bangladeshi finasist of Younes Mahmoud, received the Nobel Peace Prize in 2006

The latter was rated so highly by the committee in Oslo for providing, for years, a low-interest loans to their poorer compatriots.  Thanks to this economist from Bangladesh has created and supported many small business owners, ensuring their integrity existence.  Questions that did not meet Zauaui, gave Mahmoud has been able to refinance its bank capital only through interest from loans or just had correspondent accounts at institutions with many more working capital.  The latter are usually outside the Islamic economic zone.  Sometimes there are significant dividends received from deposits made.

On the other hand it is good to consider why the banker from Bangladesh has been awarded the most prestigious award for his contribution to peace and not in the field of economics.  His work deserves admiration for his generous sponsorship through which he has saved thousands of his starving countrymen.  It can however be argued that creates Mahmoud stranger to global finance to date, economic model.

 Advertised by business experts Islamic alternative is a hybrid of socialliberalizam and social conservatism.  In the first case the state is obliged to provide tools for broad social support, and in the second – this should make the representatives of the class of rich businessmen.  Example in this regard has already been cited Bangladeshi banker.  Shariatskite economists ignore the final parameters of the relationship between state and market.  They reject 100% st state intervention, but at the same time and against its total withdrawal.  In fact, they call for the creation of a social market economy, which is constitutionally secured in many Western countries.

trnstd source : orientbg

Effect of economic turmoil on Islamic banking x-rayed

Legislation, governance and the effect of the economic crisis on Islamic banking and finance were the focus of a conference that was held last January 2010. The global economic turmoil was a test for both conventional and Shariah-compliant systems, said Hamad Al-Monawir, Assistant Undersecretary for Planning in a speech delivered on behalf of the Deputy Prime Minister for Economic Affairs, Minister for Development Affairs and Minister for Housing Affairs Sheikh Ahmad Al-Fahad Al-Sabah. The speech was delivered at the opening of the two-day conference that dwelled on the effects of the economic crisis on Islamic financing. The event was widely attended by banking and financial experts and representatives of Islamic banks and finance institutions.

 

Undoubtedly, just like everything else was affected by the economic turmoil, so was Islamic financing, Al-Monawir said while delivering the speech. He went on to add, “During last year’s conference on Islamic financing, the economic crisis had already started and had affected all financial systems worldwide. Islamic financing was not as largely affected by the crisis.” He said that the crisis did not differentiate between Sharia-complaint and conventional financing. Islamic and non-Islamic finances have undergone real tests of how strong the system was with regard to handling a crisis of such proportion, he said.

 

A major discovery that surfaced as a result of the economic crisis, he observed, was how feeble the arbitration systems were used in various financial companies. The crisis was largely linked to asset management, demands and the concepts of risk management, which contributed to the growth of the crisis, he added. The blame, he said, lies with the system, laws and legislation that were unable to restrain the crisis and contributed toward spreading it.

 

Talking to the Kuwait Times on the sidelines of the event, Emad Yousef Al-Monayea, Chairman and Managing Director of Liquidity House, a KFH subsidiary, said that one of the major elements that has enabled Islamic banking to resist the economic crisis were the assets that back the structures developed in Islamic banking. “Most of these structures have to be backed by these assets; these assets have to be actual, should have a value and have to have some kind of marketable features into them. This is one of the major elements that maintains Islamic banking,” Al-Monayea said.

 

The close control and the strong monitoring that the Central Bank of Kuwait was applying attributed to the lesser impact of the economic crisis on Islamic banking and on the majority of the banks overall, he added. According to Al-Monayea, although there are some positive signals at present the crisis has not fully subsided. “When we speak about international markets, the signs of recovery have started. Now, there are good investment opportunities for the people who have the capability and the liquidity, he said. Sheikh Ahmad Al-Yasin Al-Sabah cautioned the uptake of risky investments. In his words, good management and the following of Islamic teachings have made up the success formula of Islamic banking.

 

Source : kuwaittimes

 

The end of the global financial crisis and the economic miracle of the Zakat

The global financial crisis came to receive the impact is not limited to the country that began with it, namely the United States. But extended to the world in light of the fact that global markets micro village, although the degree of influence varied from country to country as they pertain to the causes of the crisis, from: losses, bankruptcy, unemployment, falling stock markets, the volatility and declining prices, poverty, recession and depression. But extended to the world in light of the fact that global markets micro village, although the degree of influence varied from country to country as they pertain to the causes of the crisis, from: losses, bankruptcy, unemployment, falling stock markets, the volatility and declining prices, poverty, recession and depression. Not only the financial effects on the economy but also has moved into the real economy, and extended its influence to the heart of practical charitable institutions, particularly institutions of zakat, which is closely linked to the society as the collection and disbursement of funds. Not only the financial effects on the economy but also has moved into the real economy, and extended its influence to the heart of practical charitable institutions, particularly institutions of zakat, which is closely linked to the society as the collection and disbursement of funds.

The general manager of the IMF (Dominique Strauss-Kahn) at 5/9/2009 – about a year after the explosion of the financial crisis – that: “The global economy is about to emerge from its worst financial and economic crisis in the post-World War II, but recovery will be slow, and to improve the unemployment situation remains precarious and could continue to rise in unemployment in 2010. ” The general manager of the IMF (Dominique Strauss-Kahn) at 5/9/2009 – about a year after the explosion of the financial crisis – that: “The global economy is about to emerge from its worst financial and economic crisis in the post -World War II, but recovery will be slow, and to improve the unemployment situation remains precarious and could continue to rise in unemployment in 2010. “He also predicted in another statement to him – in the October 23, 2009 – the world economy begins to recover in late 2009 instead of the first half of 2010, according to indicators of the current International Monetary Fund. He also predicted in another statement to him – in the October 23, 2009 – the world economy begins to recover in late 2009 instead of the first half of 2010, according to indicators of the current International Monetary Fund. He explained that the recovery could begin before the first half of 2010 in late 2009. He explained that the recovery could begin before the first half of 2010 in late 2009. He added that the latest IMF forecasts show that global growth could reach 3% next year after shrinking by 1% in 2009. He added that the latest IMF forecasts show that global growth could reach 3% next year after shrinking by 1% in 2009.

As a result of the financial crisis losses to institutions and individuals, and as head of the IMF (Dominique Strauss-Kahn) losses resulting from the global financial crisis is estimated at 3.4 trillion dollars, and it is estimated that developing countries lose $ 750 billion as a result of the global financial crisis, including $ 50 billion in West Africa only as a result of the sharp decline in exports, particularly oil and commodity exports, and remittances from workers abroad, and foreign direct investment especially in tourism and real estate. As a result of the financial crisis losses to institutions and individuals, and as head of the IMF (Dominique Strauss-Kahn) losses resulting from the global financial crisis is estimated at 3.4 trillion dollars, and it is estimated that developing countries lose $ 750 billion as a result of the global financial crisis, including $ 50 billion in West Africa only as a result of the sharp decline in exports, particularly oil and commodity exports, and remittances from workers abroad, and foreign direct investment especially in tourism and real estate. Estimated losses of the Arab League of Arab States as a result of the global financial crisis by about 2.5 trillion dollars. Estimated losses of the Arab League of Arab States as a result of the global financial crisis by about 2.5 trillion dollars.

The global financial crisis has led to a decline in growth rates, a result of the decline in gross domestic product, which has led to cases of recession and some have turned into recession. The global financial crisis has led to a decline in growth rates, a result of the decline in gross domestic product, which has led to cases of recession and some have turned into recession. It’s generally acknowledged that in the case of increasing the rate of economic growth and thus less needy boom, where economic growth is reflected directly and indirectly on the income of individuals, institutions, and facilitate the collection of funds good works, while it was difficult in cases of stagnation and recession. It’s generally acknowledged that in the case of increasing the rate of economic growth and thus less needy boom, where economic growth is reflected directly and indirectly on the income of individuals and institutions, and facilitate the collection of funds good works, while it was difficult in cases of stagnation and recession. Charity work increases with economic growth in the state of high demand at the same time, the uses of the funds of charitable work increases with low economic growth, and the occurrence of the clutches of the economy in recession and stagnation. Charity work increases with economic growth in the state of high demand at the same time, the uses of the funds of charitable work increases with low economic growth, and the occurrence of the clutches of the economy in recession and stagnation.

This is normal and Institutions of Zakat and charity work relies mainly on the wealth of individuals and institutions as a source to fund their work and looking forward to promoting their increasing wealth and income and then flourish charity work, and vice versa, stagnation and recession adversely affect their fortunes, and thus adversely affect the outcome of the institutions of zakat. This is normal and Institutions of Zakat and charity work relies mainly on the wealth of individuals and institutions as a source to fund their work and looking forward to promoting their increasing wealth and income and then flourish charity work, and vice versa, stagnation and recession adversely affect their fortunes, and thus adversely affect the outcome of the institutions of zakat.

If we assume that the losses of the Arab States of the global financial crisis $ 2.5 trillion, according to the League of Arab States, this means a decrease in income Zakat more than 62 billion dollars, which affects the financial side of the institutions of Zakat, and then the beneficiaries. If we assume that the losses of the Arab States of the global financial crisis $ 2.5 trillion, according to the League of Arab States, this means a decrease in income Zakat more than 62 billion dollars, which affects the financial side of the institutions of Zakat , and then the beneficiaries.

Although the Provisions of the financial crisis of the risk of foundations by preventing its ability to fulfill its responsibility towards the beneficiaries of charitable work, it also includes many opportunities for those institutions. Although the Provisions of the financial crisis of the risk of foundations by preventing its ability to fulfill its responsibility towards the beneficiaries of charitable work, it also includes many opportunities for those institutions. It’s an opportunity for the institutions of Zakat and charity work to re-evaluate their policies, and risk management, and enhance planning for long-term strategies, and the search for sustainable sources of funding rather than reliance on the immediate and short-term, rationalization of expenditures, with the strengthening of human resource efficient Secretary. It’s an opportunity for the institutions of Zakat and charity work to re-evaluate their policies, and risk management, and enhance planning for long-term strategies, and the search for sustainable sources of funding rather than reliance on the immediate and short-term, rationalization of expenditures, with the strengthening of human resource efficient Secretary.

And the financial crisis an opportunity for institutions of zakat and charity work to search for new segments to finance the charitable work by focusing on individuals through programs withholding monthly facilitator, with the activation of the charity waqf and diversification of the container, and to increase its numbers, even if small amounts especially in times of prosperity. And the financial crisis an opportunity for institutions of zakat and charity work to search for new segments to finance the charitable work by focusing on individuals through programs withholding monthly facilitator, with the activation of the charity waqf and diversification of the container, and to increase its numbers, even if small amounts especially in times of prosperity.

As the financial crisis an opportunity for institutions of zakat and charity work for the console and follow-up from a deficit to pay zakaah even activate the shares debtors, it is known way to pay zakat deserving of being considered by organizations of the Zakat be paid by the event, and feel the value of social security by the Lord. As the financial crisis an opportunity for institutions of zakat and charity work for the console and follow-up from a deficit to pay zakaah even activate the shares debtors, it is known way to pay zakat deserving of being considered by organizations of the Zakat be paid by the event, and feel the value of social security by the Lord.

That the financial crisis as an opportunity to build bridges of cooperation and interdependence among governments and institutions of zakat and charity work through increased government support of charitable work, which is one of the mechanisms that increase private spending, which also reflects positively on aggregate demand. That the financial crisis as an opportunity to build bridges of cooperation and interdependence among governments and institutions of zakat and charity work through increased government support of charitable work, which is one of the mechanisms that increase private spending, which also reflects positively on aggregate demand. Perhaps in the application of zakat ore on oil and gas haven to achieve security, moral and physical elimination of the Trinity in a Muslim country devastating poverty, disease and ignorance eliminated. Perhaps in the application of zakat ore on oil and gas haven to achieve security, moral and physical elimination of the Trinity in a Muslim country devastating poverty, disease and ignorance eliminated.

Finally, the remarks of the President of the International Monetary Fund that the global economy on track to emerge from the global financial crisis, but the recovery will be slow, with the expected increase in the unemployment rate reflects the fact that the end of the crisis did not come close yet, especially since unemployment in the origin of the crisis, which does not keep a deadly weapon The Weather. Finally, the remarks of the President of the International Monetary Fund that the global economy on track to emerge from the global financial crisis, but the recovery will be slow, with the expected increase in the unemployment rate reflects the fact that the end of the crisis did not come close yet, especially since unemployment in the origin of the crisis, which does not keep a deadly weapon The Weather. If those statements represent added value to the values of the economic miracle of charity, although income was affected negatively by the financial crisis Zakat but the best way to stimulate investment, and exit of the tunnel of stagnation and recession, and solve the unemployment problem from its roots. If those statements represent added value to the values of the economic miracle of charity, although income was affected negatively by the financial crisis Zakat but the best way to stimulate investment, and exit of the tunnel of stagnation and recession, and solve the unemployment problem from its roots. Zakaah stimulate spending and raise the rates of aggregate demand at the same time be converted to a productivity tool for the beneficiaries, trained them to work, and the provision of productive assets for them, which eventually empties into the pot to stimulate investment, and development of capital assets produced in the community. Zakaah stimulate spending and raise the rates of aggregate demand at the same time be converted to a productivity tool for the beneficiaries, trained them to work, and the provision of productive assets for them, which eventually empties into the pot to stimulate investment, and development of capital assets produced in the community.

Dr. Ashraf Dawaba

source : drd

UK Islamic Bank Serves More Non-Muslims

On a recent Friday afternoon, the Islamic Bank of Britain (IBB) branch in West London was bustling with a large number of customers, including non-Muslims. At a time many conventional banks have gone bust in the credit crunch and financial crisis, the IBB is reporting a growth of 5 percent in customer numbers and 13 percent in customer financing.

The reason is that the bank “has been better protected from the credit crunch affecting mainstream banks,” Sultan Choudhury, the commercial director at the IBB, told IslamOnline.net.

A financial crisis swept the US last month after the collapse of Lehman Brothers, the fourth-largest investment bank, and the financial woes of a number of Wall Street giants.

This triggered a domino effect across the world leaving conventional banks, lending each other on the money markets, short of credit.

Western government have since pumped billions of dollars into their troubled banks to keep credit flowing and prevent a complete financial meltdown.

The British government recently unveiled a massive the £37bn bank bailout of taxpayer’ funds to rescue Lloyds TSB, HBOS and Royal Bank of Scotland from liquidity shortage.

Choudhury said the IBB does not take interest-based loans from other banks, and has high quality, asset-based investments.

“That means that the bank avoided the instability the other high street banks have suffered,” he explained.

Islam forbids Muslims from usury, receiving or paying interest (known as Riba) on loans.

Transactions by Islamic banks must be backed by real assets — not shady repackaged subprime mortgages.

Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.

Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.

Increasing

Choudhury cited a rise in the number of IBB’s customers “looking for a safer option for their money.”

Abul Fozoll, the manager of the IBB Shepherds Bush branch, says Muslims make up the majority of customers.

Most of the bank’s branches are located in areas with a large Muslim population.

However, the bank officials say more branches are to open in other areas as its profits and customer numbers are picking up.

The IBB,UK’s first stand-alone Islamic bank, is reporting an increase in the number of non-Muslim customers.

Bank officials said the numbers are growing because Islamic banking offers a “safer option” thanks to its operations which are based on no-interest schemes.

However, they refused to give any breakdown of Muslim and non-Muslim customers.

Non-Muslim customers are drawn to the IBB because High Street banks offer less opportunities for house mortgages during the crunch.

Recent figures from the Council of Mortgage lenders have shown a continued slowdown in mortgage approvals and advances.

Just 59,000 residential properties, worth more than £40,000, were sold during September, the lowest level since HM Revenue & Customs began issuing figures in this format in 2005.

The number was well down on the 126,000 homes sold during September last year.

The IBB has stepped in, launching new home purchasing schemes based on the Islamic financing principles of Ijara (leasing) and Diminishing Musharaka (reducing partnership).

Along with financial advantages, Chodhury said that a growing number of non-Muslims is drawn to his bank’s genuinely ethical offering.

“It is ethical, as investing in businesses that are considered unlawful is prohibited. That includes companies that deal in gambling, pornography, tobacco and other commodities contrary to Islamic values

source : iol

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