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Thomson Reuters, in partnership with Abu Dhabi Islamic Bank, is proud to announce the launch of the third annual Ethical Finance Innovation Challenge & Awards (EFICA). The global awards champion new ideas that strengthen and advance ethics in finance to transform the global financial industry. EFICA is open to all.
The response to EFICA in 2013 and 2014 has been nothing short of encouraging for the future of the global financial services industry. We received over two hundred applications from individuals and organisations around the world from different sectors and backgrounds. Similar to the process in previous years, we will shortlist the best submissions to progress to workshops with the advisory board. Winners are then selected, by audience vote, during the EFICA gala dinner which gathers industry peers and experts.
by : Michael Gassner, Editor of IslamicFinance.de
Michael Gassner, Editor of IslamicFinance.de presented on the 3ème Congrès International de la Finance Islamique “Les Banques Islamiques et le Financement des Entreprises: Pratiques et enjeux théoriques” en Marrakech, 25/26 Mai 2015.
The presentation discussed that exponential growth of debt in Islamic finance is ruled out, nevertheless, debt and equity finance exists. The specific significance of equity finance (musharaka, mudaraba) lies in need for solid debt/equity ratio, as Muslims shall never die being in debt. Still Islamic banks barely provide any equity finance and the reason often given are moral hazard costs. This is denied as debt as well as equity has specific moral hazard problems, and if anything, even conventional banks would offer a mixture of debt and equity. Rather the assumed reason appears to be in the regulation (capital weight) and taxation (interest deductibility), which makes equity financing from a bank 2-4 times at least more expensive than debt finance, and thus not worth being offered.
The attached presentation is in French.
The organiser of the conference was the Groupe de recherche en Innovation, Responsabilités et Développement Durable (INREDD, UCA, Marrakech) Et the Bernoulli Center for Economics (BCE, Université de Basel, Suisse).
Please let know if you have any topics related with Islamic venture capital or entrepreneurship in Islamic finance. This can be added to the conference. email : firstname.lastname@example.org
Call for Papers: First International Conference on Entrepreneurship, Leadership and Sustainable Development Global Entrepreneurship: Connected continents, new opportunities
At Effat University in Collaboration with World Entrepreneurship Forum Jeddah – Saudi Arabia – May 04-05 2015
Advisory Board is pleased to announce the Call for Papers for the First peer reviewed International Conference on Entrepreneurship, Leadership and Sustainable Development at Effat University Jeddah Saudi Arabia.
Papers to be published in Journal of Entrepreneurship, Leadership and Sustainable Development, joint publication from United Kingdom by Effat University, World Association of Sustainable Development and Brighton University.
The Conference will address a range of critically important issues and themes relating to the Entrepreneurship, Leadership and Sustainable Development community. Plenary speakers include leading thinkers in the field.
Abstracts for paper presentations or posters/exhibits on the issues through one of the following themes:
1. Entrepreneurship in Middle East
2. Female Entrepreneurship in Middle East
3. Ecosystem Strategy of Entrepreneurship Development
4. Entrepreneurship as a Means of Global Connectivity
5. Innovation to foster Entrepreneurship
6. Maternalistic Leadership
8. Development of Young Leaders
9. Sustainable Development in Middle East
10. Entrepreneurship Practice / Family Businesses
Abstracts beyond these thematic areas but within broader framework above will also be considered.
On payment of a fee the Presenters will also have the chance to:
• Perform Umra • Desert Night • Snorkeling in Red Sea • Historic Jeddah City Visit
To Submit abstract or a Paper
Securing Visa for Saudi Arabia is a long and complicated process. Please send the copy of passport and 100 words biographical sketch along the abstract/paper for processing of the visa by Effat University.
• Submission of Abstract – March 07, 2015
• Result of Peer review – March 14, 2015
• Submission of Paper – April 21, 2015
US$: 200.00 or SR. 750 (Two Hundred United States Dollars or Seven Hundred and Fifty Saudi Riyals)
An Islamic social finance institution is essentially a non-profit or charity organization that seeks to operationalize the concepts of waqf, zakah, sadaqah and qard hasan. It has unique assets and liabilities, income and expenditure. By definition, an Islamic non-profit rules out return-seeking share capital. It creates assets through (i) waqf of “permanent” physical assets (ii) cash waqf (iii) qard hasan and (iv) sadaqa. The cost of various social and charitable activities are covered by revenues and cash flows generated from profitable employment of the assets and liquid funds mobilized through sadaqah. It may create and operate a separate Fund to mobilize zakah from the muzakki (those who are entitled to pay zakah) and distribute among the mustahiq (those who are entitled to receive zakah). As an amil-zakah the Fund may recover its cost of administration from the zakah proceeds mobilized (one-eighth at the maximum).
In what follows we argue in favor of developing governance and accountability standards for Islamic charity and non-profit organizations. The standards are needed to help donors in taking prudent and rational giving decisions and to promote public trust in such organizations. The standards are expected to foster fair and transparent philanthropic practices, promote ethical conduct and encourage altruism and benevolence.
The Securities Commission (SC) of Malaysia is now proactively promoting the idea of using a variety of sukuk to raise funds from the capital market for waqf development. It has identified a range of sukuk that may be used for waqf development, (e.g. sukuk ijarah, sukuk wakalah bi al-istithmar, sukuk murabaha, sukuk mudharabah, sukuk musharakah) similar to those used in Singapore and Saudi Arabia. The Securities Commission has also set several criteria for retention of a licensed or supervised intermediary to professionally manage waqf assets. Such an intermediary must (i) adopt international best practices and standards, (ii) have technical knowledge and resources, (iii) must be subject to strong governance providing adequate level of investor protection and (iv) must have an established technology infrastructure. The SC has also come up with a range of Principles (that encapsulate broad concepts underpinning good corporate governance and that the waqf institutions should apply) and Recommendations to be implemented by the waqf institutions.
Principle 1. Strengthening the Oversight of Waqf Institutions
Recommendation 1.1. The waqf trustee should establish clear roles and responsibilities reserved for them and those delegated to the waqf institutions,
Recommendation 1.2. The waqf trustee should ensure that the waqf institutions are governed by a satisfactory code of conduct.
Recommendation 1.3. The waqf trustee should oversee and monitor the business operations and conduct of the waqf institutions.
Recommendation 1.4. The waqf trustee should be given access to information and advice.
Principle 2. Strengthening the Effectiveness of Waqf Institutions
Recommendation 2.1. The waqf institutions should have the necessary expertise to manage waqf assets.
Recommendation 2.2. The waqf institutions should have a clear strategy in managing waqf assets.
Recommendation 2.3. The waqf institutions should have in place adequate internal controls including risk management and internal audit.
Recommendation 2.4. The waqf institutions should produce an annual report which is made public.
Principle 3. Strengthening the Engagement with Stakeholders
Recommendation 3.1. The Waqf Institution should continuously engage its stakeholders.
Recommendation 3.2. The Waqf Institution should establish a clear and effective communication policy to manage relationships with its stakeholders.
The suggested Malaysian framework is however, a departure from our earlier view of an Islamic social financial institution being a not-for-profit entity. The SC recommended framework seeks to create a new breed of profit-driven financial institutions as intermediaries that would “take over” the task of waqf management from the mutawallis, traditionally defined as trustee-managers. This may have its merits in the context of Malaysian and Singaporean laws that disallow private mutawallis and where the State Islamic Religious Councils are the sole mutawallis. However, in other regulatory regimes where private mutawallis are entrusted with development and management of the awqaf, a profit-seeking financial institution has a limited role restricted to infusion of private capital for waqf development only. A good example of such an institution is the Awqaf Properties Investment Fund managed by the Islamic Development Bank as also the newly established Indian entity, the National Waqf Development Corporation (NAWADCO).
There is a general consensus on several issues relating to use of private capital for waqf development.
One, private capital should be welcome only where not-for-profit and philanthropic capital is not forthcoming. The SC could have ushered in a new era by suggesting new, creative and innovative instruments to raise such funds. Unfortunately, the various sukuk structures suggested would facilitate raising profit-seeking capital alone. The mobilization of not-for-profit and philanthropic capital should never be relegated to a secondary role. Indeed, this would go against the spirit of the institution of waqf itself, which is to mainstream benevolent acts.
Two, the mixing of private capital with waqf capital is permitted only in a limited way, i.e. without diluting the “perpetuity” feature of awqaf assets. The use of Musharaka Bonds in Singapore by the Majlis Ugama Islam Singapura (MUIS) for development of Wakaf Syed Omar Ali Aljunied (Bencoolen)was largely welcome by observers, as this was a pioneering attempt to create a win-win situation for all stakeholders. (What the Waqf Boards in India may Learn from MUIS (Singapore)) As a result of the development, the waqf got a brand new mosque with doubled capacity and four stories of commercial properties to provide income for the mosques to maintain and run its operation. The permission by Shariah scholars to extend lease of waqf to 99 years was tolerated, since it facilitated a development that in the ultimate analysis, enhanced the benefits for the waqf designated beneficiaries. The latest development by MUIS – the Alias Villas – has redeveloped the Wakaf Al Huda bequeathed in 1905 (a land parcel approximately 30,450 square feet in size, currently housing a 110-year-old mosque), that essentially allows the mosque to be financially sufficient without requiring it to undertake major fundraising campaigns.
Indeed, every waqf development project that involves application of private capital must pass this litmus test – whether the project would lead to enhanced, sustained and significant benefits to designated beneficiaries of the waqf.
Source : http://sadaqa.in/2015/01/