Alhuda Cibe - Islamic Credit Union 662f3u
This document was ed by and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this report form. Report 2z6p3t
Overview 5o1f4z
& View Alhuda Cibe - Islamic Credit Union as PDF for free.
More details 6z3438
- Words: 2,388
- Pages: 27
Religiosity and threshold effect in social and financial performance of microfinance institutions
• Mohammad Ashraful Mobin
•
AL BARAKAH MULTI-PURPOSE CO-OPERATIVE SOCIETY LIMITED H.O.: Madam Lolo Street, Rose Belle, Mauritius Tel: (+230) 6275766 E-mail: [email protected]; www.albarakahcoop.org
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
6TH GLOBAL ISLAMIC MICROFINANCE FORUM Financial Inclusion, Outreach Strategies & Innovations November 8-9, 2016 – Nairobi, Kenya
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Agenda • Introduction: The Islamic Finance industry • The Cooperative Movement & Credit Unions Worldwide • The Credit Union Movement and Islamic Financial Institutions • Islamic Credit Unions • Setting up Islamic Credit Unions • Financing Instruments of Islamic Credit Unions • Reserves and other Funds of Islamic Credit Unions • Challenges • Conclusion
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Islamic Finance Industry Evolution and Growth
The modern experiment of profit and risk-sharing business, which is the cornerstone of Islamic banking business, first undertaken in 1963 in Mit Ghamr, had as purpose the exploration and investigation of the possibilities of mobilizing local savings and credits as an essential requirement for socioeconomic development in the area. (El Naggar, 2006).
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Islamic Finance Industry Evolution and Growth •Emergence of IFIs since 1960 & growth - IBFIns has become a reality in Muslim majority as well as Muslimminority countries and its share in the global market is increasing day by day. •Observation – satisfaction: growth (15-20%), 600+ full- fledged institutions, 191+ Islamic windows operating in over 48 countries. Global IF assets > USD 2 trillion to-date. •Critics: mimicking the conventional products - whether IFI are achieving the Islamic ideals of economic justice, providing necessities of life and well-being of the community, good life and spiritual peace are available to society at large – encouraging consumerism •IFI – to mobilise resources to promote development in a Shari'ah-compliant manner.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Islamic Finance Industry Islamic Financial Institutions • B.org - Types of IFI: F-B-T-L-FH • Dominance by ICB (HNW) • Neglected areas - Islamic microfinance & institutions like cooperatives which are community-based organisations (CBO) and have economic development as well as social objectives. • Experiment of Dr. Naggar of mobilizing savings and credits for socio-economic development. • Back --- IBF evolved through the cooperative sector - acted as a stepping stone
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Cooperative Movement & Credit Union Idea of helping each other / t efforts to achieve a common goal
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Cooperative Movement & Credit Union
Cooperative
Bodies: ICA has 290 from 96 “an autonomous association of persons united voluntarily to meet countries (Dec 2015). their common economic, social Main objective of and cultural needs and aspirations establishing through a tly owned and cooperatives is the democratically controlled promotion of the enterprise.” economic, social and PRINCIPLES cultural welfare of its • Voluntary and open hip according to • Democratic member control cooperative principles. • Member economic control Coop in any type of • Autonomy and independence business activity: • Education, training and information consumer, producer, • Co-operation among co-operatives marketing, agriculture, • Concern for community fishing, housing, financial cooperatives (credit unions). Source: International Cooperative Alliance (ICA)
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions - Financial cooperatives that may accept savings, deposits, provide credit and other financial services to its
Credit Unions
Throughout history the model has proved that it is one that may be adapted to the needs of different population groups, different cultures, languages, and religions, as well as to different legal, political, and economic systems.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions Worldwide WOCCU Statistical Report 2015
As at December 2015 ** Penetration rate is calculated by dividing the total number of reported credit union by the economically active population age 15-64 years old.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions Worldwide
WOCCU Statistical Report 2015
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
CU in Africa: 25 countries, CU - 21040, - 19,438,146
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions / Financial Cooperatives Core Features • hip – People from all walks of life – Common bond (place of work, same organization, community-based • Ownership: Member-owned organization • Democratic: OMO Vote
• Capital and Financing – Financial dignity - Shares, savings and from – Financing - savings precedes financing – savings, Multiplier (1x3) – No maximization of profit – Surplus/profit returned to shareholders in dividend, patronage bonus, lower fees, and better services
deposits spirit of of reserves
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions / Islamic Financial Cooperatives • The conventional CU does not meet the financial needs of the Muslim community as they are not according to the financial principles of Islam/Shariahcompliant. • ICU refers to retail financial services in compliance with Islamic financing principles. • Islamic Credit Unionists – efforts on several fronts over the past 50 years to promote and set up ICU around the globe. • UK alone has 22 fully fledged Islamic Investment and Finance Cooperatives (IIFCs) (WOCCU, 2013). • During the past years, WOCCU has built a network of Islamic Investment and Finance Cooperatives across Afghanistan providing Murabaha, Ijara and other products to these member-owned cooperatives.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions
Tracing History
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Cooperatives and Islamic Credit Unions Worldwide
Countries with Islamic Credit Unions / Islamic Cooperatives
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions in Muslim-majority & Muslim-minority Countries
Credit Union
Country
Yea r
Main Products / Remarks
Koperasi Muslimin Malaysia Berhad Ansar and Islamic Cooperative Housing Corporation Ltd. (ACHC) Muslim Credit Union Co-operative Society Limited Pattani Islamic Saving Cooperative Muslim Community Cooperative Limited
Malaysia
1980
Canada
1981
Bai Bithaman Aajil; Muslim Welfare Scheme (Al-Abrar); Qard Hassan Interest-free home ownership and investment opportunities
Trinidad Tobago
& 1983
NA
Thailand
1987
NA
Australia
1989
Facilitated over $750 million in Islamic home finance and manages close to $30 million in investments. Musharaka house financing
Qurtuba Housing Co-op
Quebec, Canada Loans and Savings Swansea, Abertawe (LASA) Credit Great Britain Union Ltd
1991
Ameen Housing Co- California operative of California, Inc. (AHC) Islamic Co-operative Australia Finance Limited
1996
1992
1998
Conventional credit union offering Shari’ah compliant savings and finance products to its (Hajj Fund, Marriage Fund; Funeral Fund, Murabaha and Wakala) Investments and home financing
Housing and vehicle finance; Hajj fund; Qard Hasan (Benevolent) fund; Children Education
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions in Muslim-majority & Muslim-minority Countries
Credit Union
Country
Takaful T&T Friendly Society Trinidad Tobago
Year
FML Multi-Purpose Co- Fiji Islands operative Society Balkh Savings and Credit Mazar-eUnion Sharif, Afghanistan Jawsjan Savings and Credit Sheberghan, Union Afghanistan Manzil Co-operative Trinidad & Tobago Al Islamiah Saving Thailand Cooperative Amwal Credit Union Hong Kong
2004
Funeral Benefit; Hajj Fund; Investment Fund; Waqf (Cash Waqf, Real Estate Waqf); Property Ownership NA
2004
NA
2004
NA
2006
NA
NA
NA
2009
Janseva Cooperative Credit India Society Limited
2010
Assiniboine (ACU)
2010
Ijarah; Murabaha; Istisna'a; Musharakah; Wakalah; and a variety of s and wealth management services Various types of Demand and Term Deposits s; Murabaha; Mudaraba; Musharaka; Ijarah and many others First bank to offer Islamic mortgage services exclusively at one of ACU’s branches http://www.icucan.ca/home
Credit
Union Winnipeg, Canada
NA: Not Available
Islamic
Credit
& 1999
Main Products / Remarks
Source: Computed
Union
of Canada
NA
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Setting up Islamic Credit Unions • Conceptual Framework “Cooperate with all in what is good and pious and do not cooperate in what is sinful and wicked…” (Q-5:2)- Ta’awoun
• Legal Framework – Easy formation, less regulated than other corporate sector (Cooperatives Act ,Credit Union Act); Shari'ahcompliant- WOCCU
• Values - IF based on Islamic ethics/values: justice, sharing, solidarity – Coop based on values: honesty, equity, solidarity, self-help, mutual-help etc
• Common bond - IB • CBO / Member-owned organization • Small seed capital – can promote saving culture among the community
• • • • •
Incentives & Benefits – Tax Relief in certain countries Multi-purpose - open to various types of economic activity Broaden ownership of business Reduce concentration of wealth Democratisation of the Islamic Financial System (SMF Inst.)
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions Formation & Organization • Founder - Initial contribution of those who are conscientious and committed people to provide an alternative to the interest-based institution • Democratic Structure / Management / Board & Sub-committees • Shareholdings / hip / Financial inclusion/ Returns – Open to people from all walks of life, established by the people, for the people – CBO - Member-owned society where the spirit of ownership and sense of belonging to an Islamic financial institution will be present. – Financial dignity by mobilizing capital/funds from the community/ - shares, savings and deposits and offering financial services to those who lack access to financial services – Not-for-profit-maximization - reasonable profit on financing products, – Returns to shareholders/ • Organs of Control, Audit & Good Governance AGM - Internal Controller, External Auditor and Shari’ah Supervisory Committee to ensure that the affairs of the institution are conducted in accordance with Shari’ah and within provisions of the Law of the country
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions Marketing • Lack of awareness of Islamic financial products. • Correcting misconceptions about ICU - not a charitable institution or a benevolent society but a business organization operating on Islamic lines for the community. • Word-of-mouth marketing Education & Training/Human Resource • IF Education Program (IFEP) for existing and potential • Topics and aspects such as Conceptual Framework of Islamic Finance, Basic Islamic Financial Laws, Quranic Verses concerning the economic system of Islam, Ethics and operation of the ICU. • Education sessions for , opportunities to conduct financial transactions and other businesses of the ICU at the same time Location - Inception stage - Mosques, Islamic educational institutions, and centers can be used for these activities.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Challenges at various levels • Individual Level : Change in the mindset of Individuals – to perceive and appraise Islamic finance from an Islamic perspective rather than looking from conventional binoculars.
• Organizational Level : Org. can play a key role towards the promotion of ICU - setting up their own ICU or be fervent ers of such institutions. • Community Level :
Overall, the whole community will benefit if they take the initiative to bring about the desired change as Allah says: “…Indeed, Allah will not change the condition of a people until they change what is in themselves…” (Ar-Ra`d 13:11) People have to learn to live a modest and
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Challenges at various levels • Government / Regulators Level /Scholars Must community-level financial institutions by providing a favorable legal framework , and tax incentives . In many countries, credit unions are governed by the Credit Union Act although the global trend is moving towards the regulation and supervision of credit unions by the Central Bank (Trinidad and Tobago, Republic of Ireland). The same policy can be applied for the regulation and supervision.
• Global Level
- Due to the prevalence of ICU globally, there is a need for international bodies such as AAOIFI, ISRA, IFSB and IDB to at least establish a special unit or department for development of this sector. - Responsibility as regulator, facilitator and for developing Shari’ah standards for products that promote these efforts. - WOCCU, has already taken the lead in this perspective
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Conclusion • ICU is in line with both cooperative and Islamic principles. • Financial services to all strata of the community and opportunities of managing the wealth of the community in a Shari’ah compliant manner. • ICU will assist to build up a robust community-based financial institution • A combination of self-reliance with active participation of the community will strengthen economic and social development. • should also be enlightened that they are not to be interested only with the economic benefits of the institution but also with the spiritual and conceptual part and also prepared to face challenges, inconveniences or difficulties that will be unavoidable at the infant stage of the institution. • Concern for community - ICU can embark everyone on board as a stakeholder and finally it will be the job of everybody…
[email protected] www.albarakahcoop.org Tel: (+230) 6275766, Mb. (+230) 57781738
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Mr. Mamode Raffick NABEE MOHOMED Founder & Secretary AL BARAKAH MCSL E-mail: [email protected]
AlHuda CIBE FZ LLE - U.A.E P: + 971 56 9286664, + 971 55 938 99 00 AlHuda Center of Islamic Banking & Economics Pakistan Ph: (92-42) 35913096 - 98, Fax: (92-42) 35913056 Email: [email protected] Website: www.alhudacibe.com
• Mohammad Ashraful Mobin
•
AL BARAKAH MULTI-PURPOSE CO-OPERATIVE SOCIETY LIMITED H.O.: Madam Lolo Street, Rose Belle, Mauritius Tel: (+230) 6275766 E-mail: [email protected]; www.albarakahcoop.org
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
6TH GLOBAL ISLAMIC MICROFINANCE FORUM Financial Inclusion, Outreach Strategies & Innovations November 8-9, 2016 – Nairobi, Kenya
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Agenda • Introduction: The Islamic Finance industry • The Cooperative Movement & Credit Unions Worldwide • The Credit Union Movement and Islamic Financial Institutions • Islamic Credit Unions • Setting up Islamic Credit Unions • Financing Instruments of Islamic Credit Unions • Reserves and other Funds of Islamic Credit Unions • Challenges • Conclusion
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Islamic Finance Industry Evolution and Growth
The modern experiment of profit and risk-sharing business, which is the cornerstone of Islamic banking business, first undertaken in 1963 in Mit Ghamr, had as purpose the exploration and investigation of the possibilities of mobilizing local savings and credits as an essential requirement for socioeconomic development in the area. (El Naggar, 2006).
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Islamic Finance Industry Evolution and Growth •Emergence of IFIs since 1960 & growth - IBFIns has become a reality in Muslim majority as well as Muslimminority countries and its share in the global market is increasing day by day. •Observation – satisfaction: growth (15-20%), 600+ full- fledged institutions, 191+ Islamic windows operating in over 48 countries. Global IF assets > USD 2 trillion to-date. •Critics: mimicking the conventional products - whether IFI are achieving the Islamic ideals of economic justice, providing necessities of life and well-being of the community, good life and spiritual peace are available to society at large – encouraging consumerism •IFI – to mobilise resources to promote development in a Shari'ah-compliant manner.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Islamic Finance Industry Islamic Financial Institutions • B.org - Types of IFI: F-B-T-L-FH • Dominance by ICB (HNW) • Neglected areas - Islamic microfinance & institutions like cooperatives which are community-based organisations (CBO) and have economic development as well as social objectives. • Experiment of Dr. Naggar of mobilizing savings and credits for socio-economic development. • Back --- IBF evolved through the cooperative sector - acted as a stepping stone
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Cooperative Movement & Credit Union Idea of helping each other / t efforts to achieve a common goal
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
The Cooperative Movement & Credit Union
Cooperative
Bodies: ICA has 290 from 96 “an autonomous association of persons united voluntarily to meet countries (Dec 2015). their common economic, social Main objective of and cultural needs and aspirations establishing through a tly owned and cooperatives is the democratically controlled promotion of the enterprise.” economic, social and PRINCIPLES cultural welfare of its • Voluntary and open hip according to • Democratic member control cooperative principles. • Member economic control Coop in any type of • Autonomy and independence business activity: • Education, training and information consumer, producer, • Co-operation among co-operatives marketing, agriculture, • Concern for community fishing, housing, financial cooperatives (credit unions). Source: International Cooperative Alliance (ICA)
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions - Financial cooperatives that may accept savings, deposits, provide credit and other financial services to its
Credit Unions
Throughout history the model has proved that it is one that may be adapted to the needs of different population groups, different cultures, languages, and religions, as well as to different legal, political, and economic systems.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions Worldwide WOCCU Statistical Report 2015
As at December 2015 ** Penetration rate is calculated by dividing the total number of reported credit union by the economically active population age 15-64 years old.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions Worldwide
WOCCU Statistical Report 2015
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
CU in Africa: 25 countries, CU - 21040, - 19,438,146
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Credit Unions / Financial Cooperatives Core Features • hip – People from all walks of life – Common bond (place of work, same organization, community-based • Ownership: Member-owned organization • Democratic: OMO Vote
• Capital and Financing – Financial dignity - Shares, savings and from – Financing - savings precedes financing – savings, Multiplier (1x3) – No maximization of profit – Surplus/profit returned to shareholders in dividend, patronage bonus, lower fees, and better services
deposits spirit of of reserves
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions / Islamic Financial Cooperatives • The conventional CU does not meet the financial needs of the Muslim community as they are not according to the financial principles of Islam/Shariahcompliant. • ICU refers to retail financial services in compliance with Islamic financing principles. • Islamic Credit Unionists – efforts on several fronts over the past 50 years to promote and set up ICU around the globe. • UK alone has 22 fully fledged Islamic Investment and Finance Cooperatives (IIFCs) (WOCCU, 2013). • During the past years, WOCCU has built a network of Islamic Investment and Finance Cooperatives across Afghanistan providing Murabaha, Ijara and other products to these member-owned cooperatives.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions
Tracing History
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Cooperatives and Islamic Credit Unions Worldwide
Countries with Islamic Credit Unions / Islamic Cooperatives
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions in Muslim-majority & Muslim-minority Countries
Credit Union
Country
Yea r
Main Products / Remarks
Koperasi Muslimin Malaysia Berhad Ansar and Islamic Cooperative Housing Corporation Ltd. (ACHC) Muslim Credit Union Co-operative Society Limited Pattani Islamic Saving Cooperative Muslim Community Cooperative Limited
Malaysia
1980
Canada
1981
Bai Bithaman Aajil; Muslim Welfare Scheme (Al-Abrar); Qard Hassan Interest-free home ownership and investment opportunities
Trinidad Tobago
& 1983
NA
Thailand
1987
NA
Australia
1989
Facilitated over $750 million in Islamic home finance and manages close to $30 million in investments. Musharaka house financing
Qurtuba Housing Co-op
Quebec, Canada Loans and Savings Swansea, Abertawe (LASA) Credit Great Britain Union Ltd
1991
Ameen Housing Co- California operative of California, Inc. (AHC) Islamic Co-operative Australia Finance Limited
1996
1992
1998
Conventional credit union offering Shari’ah compliant savings and finance products to its (Hajj Fund, Marriage Fund; Funeral Fund, Murabaha and Wakala) Investments and home financing
Housing and vehicle finance; Hajj fund; Qard Hasan (Benevolent) fund; Children Education
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions in Muslim-majority & Muslim-minority Countries
Credit Union
Country
Takaful T&T Friendly Society Trinidad Tobago
Year
FML Multi-Purpose Co- Fiji Islands operative Society Balkh Savings and Credit Mazar-eUnion Sharif, Afghanistan Jawsjan Savings and Credit Sheberghan, Union Afghanistan Manzil Co-operative Trinidad & Tobago Al Islamiah Saving Thailand Cooperative Amwal Credit Union Hong Kong
2004
Funeral Benefit; Hajj Fund; Investment Fund; Waqf (Cash Waqf, Real Estate Waqf); Property Ownership NA
2004
NA
2004
NA
2006
NA
NA
NA
2009
Janseva Cooperative Credit India Society Limited
2010
Assiniboine (ACU)
2010
Ijarah; Murabaha; Istisna'a; Musharakah; Wakalah; and a variety of s and wealth management services Various types of Demand and Term Deposits s; Murabaha; Mudaraba; Musharaka; Ijarah and many others First bank to offer Islamic mortgage services exclusively at one of ACU’s branches http://www.icucan.ca/home
Credit
Union Winnipeg, Canada
NA: Not Available
Islamic
Credit
& 1999
Main Products / Remarks
Source: Computed
Union
of Canada
NA
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Setting up Islamic Credit Unions • Conceptual Framework “Cooperate with all in what is good and pious and do not cooperate in what is sinful and wicked…” (Q-5:2)- Ta’awoun
• Legal Framework – Easy formation, less regulated than other corporate sector (Cooperatives Act ,Credit Union Act); Shari'ahcompliant- WOCCU
• Values - IF based on Islamic ethics/values: justice, sharing, solidarity – Coop based on values: honesty, equity, solidarity, self-help, mutual-help etc
• Common bond - IB • CBO / Member-owned organization • Small seed capital – can promote saving culture among the community
• • • • •
Incentives & Benefits – Tax Relief in certain countries Multi-purpose - open to various types of economic activity Broaden ownership of business Reduce concentration of wealth Democratisation of the Islamic Financial System (SMF Inst.)
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions Formation & Organization • Founder - Initial contribution of those who are conscientious and committed people to provide an alternative to the interest-based institution • Democratic Structure / Management / Board & Sub-committees • Shareholdings / hip / Financial inclusion/ Returns – Open to people from all walks of life, established by the people, for the people – CBO - Member-owned society where the spirit of ownership and sense of belonging to an Islamic financial institution will be present. – Financial dignity by mobilizing capital/funds from the community/ - shares, savings and deposits and offering financial services to those who lack access to financial services – Not-for-profit-maximization - reasonable profit on financing products, – Returns to shareholders/ • Organs of Control, Audit & Good Governance AGM - Internal Controller, External Auditor and Shari’ah Supervisory Committee to ensure that the affairs of the institution are conducted in accordance with Shari’ah and within provisions of the Law of the country
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions Marketing • Lack of awareness of Islamic financial products. • Correcting misconceptions about ICU - not a charitable institution or a benevolent society but a business organization operating on Islamic lines for the community. • Word-of-mouth marketing Education & Training/Human Resource • IF Education Program (IFEP) for existing and potential • Topics and aspects such as Conceptual Framework of Islamic Finance, Basic Islamic Financial Laws, Quranic Verses concerning the economic system of Islam, Ethics and operation of the ICU. • Education sessions for , opportunities to conduct financial transactions and other businesses of the ICU at the same time Location - Inception stage - Mosques, Islamic educational institutions, and centers can be used for these activities.
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Islamic Credit Unions
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Challenges at various levels • Individual Level : Change in the mindset of Individuals – to perceive and appraise Islamic finance from an Islamic perspective rather than looking from conventional binoculars.
• Organizational Level : Org. can play a key role towards the promotion of ICU - setting up their own ICU or be fervent ers of such institutions. • Community Level :
Overall, the whole community will benefit if they take the initiative to bring about the desired change as Allah says: “…Indeed, Allah will not change the condition of a people until they change what is in themselves…” (Ar-Ra`d 13:11) People have to learn to live a modest and
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Challenges at various levels • Government / Regulators Level /Scholars Must community-level financial institutions by providing a favorable legal framework , and tax incentives . In many countries, credit unions are governed by the Credit Union Act although the global trend is moving towards the regulation and supervision of credit unions by the Central Bank (Trinidad and Tobago, Republic of Ireland). The same policy can be applied for the regulation and supervision.
• Global Level
- Due to the prevalence of ICU globally, there is a need for international bodies such as AAOIFI, ISRA, IFSB and IDB to at least establish a special unit or department for development of this sector. - Responsibility as regulator, facilitator and for developing Shari’ah standards for products that promote these efforts. - WOCCU, has already taken the lead in this perspective
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Conclusion • ICU is in line with both cooperative and Islamic principles. • Financial services to all strata of the community and opportunities of managing the wealth of the community in a Shari’ah compliant manner. • ICU will assist to build up a robust community-based financial institution • A combination of self-reliance with active participation of the community will strengthen economic and social development. • should also be enlightened that they are not to be interested only with the economic benefits of the institution but also with the spiritual and conceptual part and also prepared to face challenges, inconveniences or difficulties that will be unavoidable at the infant stage of the institution. • Concern for community - ICU can embark everyone on board as a stakeholder and finally it will be the job of everybody…
[email protected] www.albarakahcoop.org Tel: (+230) 6275766, Mb. (+230) 57781738
ISLAMIC CREDIT UNION: AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA
Mr. Mamode Raffick NABEE MOHOMED Founder & Secretary AL BARAKAH MCSL E-mail: [email protected]
AlHuda CIBE FZ LLE - U.A.E P: + 971 56 9286664, + 971 55 938 99 00 AlHuda Center of Islamic Banking & Economics Pakistan Ph: (92-42) 35913096 - 98, Fax: (92-42) 35913056 Email: [email protected] Website: www.alhudacibe.com
Related Documents c2h70
Alhuda Cibe - Islamic Credit Union 662f3u
April 2021 0
Credit Union In The Philippines 312te
December 2021 0
Union Bank Credit Appraisal Project Report 3x3l3c
October 2019 39
First Tech Credit Union Fees Schedule 5y5020
December 2019 20
Meezan Islamic Islamic Income Fund 314m31
July 2022 0
Different Between Islamic Letter Of Credit And Conventional Letter Of Credit 2nx3z
December 2019 59
Alhuda Cibe - Islamic Credit Union 662f3u
April 2021 0
Takaful Hbl 5y1x72
April 2022 0
The Study Of Surah Yaseen Lesson 01 6c3z5p
October 2019 306
Pedoman Pengelolaan Peralatan Kesehatan 5k1l5r
January 2021 0
Lesson 1- Thrown In A Well - Tafseer Surah Yusuf - Ustadh Asim Khan 485mf
October 2022 0