Islamic micro financel for NRDP

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Transcript of Islamic micro financel for NRDP

  • * Zubair MughalChief Executive OfficerAlHuda : Centre of Islamic Banking & EconomicsEditor in Chief.Islamic Banking and Finance News , True Banking.

    An Introduction to Islamic Micro Finance

    Narowal Rural Development Program 8th August, 09

  • Outline of Presentation

    Introduction to Islamic MicrofinanceRiba ( Interest )Difference between Islamic & Conventional Micro FinanceProduct of Islamic Micro Finance.Progress of Islamic Banking in Pakistan & Worldwide

  • Islam and Shariah

  • Sources of Fiqh in Islam (Islamic Finance)Quran


    Ijtehad / Qiyas

    Ijamae Ummah

  • Basic Difference between Islamic and Conventional MicrofinanceConventionalMFIClient Money Money + Money(interest)IMFIClientIslamic Microfinance

  • Riba in Quran

    ... God has permitted trade and forbidden interest...(Sura Al-Baqara 2:275)

  • Murabahah IjarahSalam & Istisna etc

    Musharakah Modarabahah Other Products

    Human Financial Needs

  • PRODUCT TREEIslamic Microfinance ModesTrade Based ModesPartnership Based ModesRental Based ModesMusharaka(Joint Venture Profit Sharing )Mudaraba( Trustee Profit Sharing)

    Murabaha(Cost Plus Profit Sale)Musawama(Bargain sale )Salam(Commodity Sale)Istisna(Sale on Order)

    Ijarah ( Leasing )Diminishing Musharaka( Transfer of Ownership)

  • Industry Progress in Pakistan

  • ONUS SHIFTS!!Customer to Halal Restaurant Owner

    Halal Restaurant Owner to Halal Meat Supplier

    Halal Meat Supplier to Halal Abattoir / Butcher

    Customer to Islamic Banker

    Islamic Banker to Shariah Scholars

  • Industry Progress in Pakistan

    6 Full fledge Banks having 239 and 12 Conventional Banks have 167 SAIBBS and 10 Sub Branches till 31st Dec, 08Total IB Branches = 519

  • Islamic products and services offered by Financial Institutions around the world


  • International Overview The size of Islamic Financial Industry has reached US$ 300 Bln. and its growing annually @ 15% per anum.51 countries have Islamic Banking Institutions 27 Muslim countries including Bahrain, UAE, Saudi Arabia, Malaysia, Brunei and Pakistan24 non-Muslim countries including USA, UK, Canada, Switzerland, South Africa and Australia

  • International OverviewLeading foreign Banks have opened Islamic Banking windows or subsidiaries such as:Standard Chartered Bank CitibankHSBCABN AMROUBS

  • International OverviewIn Feb 1999, Dow Jones introduced the Dow Jones Islamic Market Index (DJIM) of 600 companies world wide whose business complies with Islamic Shariah lawsAt present there are more than 105 Islamic Funds operational through out the world with a total fund base of over USD 3.50 billion

  • International OverviewGovernments of Bahrain ,Malaysia and now Pakistan have issued Islamic Bonds (Sukuk) in order to facilitate Islamic Banks in managing their liquidity. Issuance of these bonds has also paved the way for Shariah compliant Government borrowings

  • International OverviewInstitutions like Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Islamic Finance Services Board (IFSB) have been formed. These institutions are playing a key role in setting up and standardizing Shariah , Financial and Accounting standards for Islamic Financial Institutions.Due to these collective efforts Islamic banking is now recognized by IMF, World Bank and Basel Committee.

  • Thank You.

    Source: Institute of Policy StudiesCollective Ijtamaee Ijtehad at 4.5