Islamic Participatory Microfinance by Bank of Khartoum – I – By Dr Mohammed Obaidullah

The name is now familiar among Sudan’s poor, unemployed and recent pass-outs from universities. The Irada program of Bank of Khartoum is experimenting with new and innvovative models of intervention to make a dent on chronic social problems, such as, poverty and unemployment. As part of the Sudanese economic system, it operates as a Shariah compliant bank. At the same time, it uses participatory modes within a model that is rooted in cooperation to create and share wealth in the agriculture sector, something that is not quite aligned with mainstream Islamic commercial banking with murabaha-centric portfolios. As such, it has set an example that in a way redefines “for-profit” commercial banking. Not surprisingly therefore, it was adjudged to be among the top three finalists at the Global Islamic Microfinance Challenge 2014 organized by the CGAP (Consultative Group to Assist the Poor), the Islamic Development Bank, Al Baraka Banking Group, and Triple Jump , which evaluated innovative Islamic microfinance experiments with a focus on product development.

A Parnership to Create and Nurture Partnerships

In 2002, Bank of Khartoum (BoK) was registered as a private limited company and subsequently was acquired and managed by Dubai Islamic Bank, the largest Islamic Bank from United Arab Emirates by purchasing 60% of the government shares in 2005. Bank of Khartoum operates under Islamic Banking Standards and has a comprehensive suite of retail services including a network of 58 branches. Its product portfolio includes auto finance, home finance, education finance and takaful. It has embraced hi-tec banking with 137 ATMs, internet banking and mobile banking, SMS alerts, discount and supplementary cards and has the first and only call center.

BoK offers services to corporate, retail, microfinance and investment business segments; it also owns various subsidiaries in trade, exchange, brokerage, and commercial real estate. The equity of the bank as of Dec 2012 is SDG 860 Million. Headquartered in Khartoum, BoK has 1300 employees. Its major shareholders include local and regional businessmen and various institutions such as Dubai Islamic Bank (DIB), the Islamic Development Bank, Abu Dhabi Islamic Bank, Sharjah Islamic Bank and United Arab Emirates Etisalat.

The Bank of Khartoum’s Microfinance Department (IRADA) was established in 2009 with the support and assistance from the Islamic Development Bank. The department was given the trust to implement the SDG 200 million Al-Aman fund for Microfinance. The fund was formed by a strategic partnership between the Diwan Zakah (apex body fo zakat management in Sudan) and 32 Sudanese Commercial Banks.

read more

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s