Kenya: CBK Seeks to Grow Islamic Finance
The government is studying the Islamic finance model with a view to making the country competitive.
Central Bank of Kenya says this form of finance is fast catching up.
Governor Njuguna Ndung’u said on May 3, 2010 that despite the financial crisis, Islamic finance had demonstrated strong growth with new business areas such as mutual funds and Takaful industry attracting a lot of attention.
Theoretically, Takaful is perceived as cooperative insurance, where members contribute a certain sum to a common pool.
The purpose is not for profits but to uphold the principle of bearing one another’s burden.
“We need to understand this business model that will support our relative comparative advantage in the East African Community region,” said Prof Ndung’u during a Gulf African Bank Annual East & Central Africa Islamic conference.
He said the two fully fledged banks – Gulf African Bank and First Community Bank – had 1,570 loan accounts and 58,548 deposit accounts and control 0.8 per cent of banking sector’s net assets with less than two years in operation.
“This is a solid testimony of the vast potential of Islamic finance in Kenya, which should be tapped and opportunities explored in the insurance (Takaful) and capital market segments using shariah compliant vehicles.
The two banks are taking part in shariah compliant components of infrastructure bonds issued by Central Bank for the government.
Prof Ndung’u said the bank was waiting for “structured sukuk” to cover the bonds and Treasury bills market.
Gulf African Bank chairman Suleiman Shahbal said the world was looking at Islamic finance as an alternative to conventional finance system after the global financial crisis.
The bank’s chief executive, Mr Najmul Hassan, said the bank was holding the second conference on Islamic banking following inquiries from Muslims and non-Muslims about Islamic finance.
See on-line at: http://allafrica.com/stories/201005031654.html
Mali: Muslim Conservatives Blocking New Family Law
A new family law has raised tension in Mali. This controversial law, intended to give greater freedoms and rights to women, has been sent back to the National Assembly for a second reading after protests from Muslim radicals.
These Muslim are threatening to make the country ungovernable if the law is enacted in its original form as voted by Parliament in August 2009.
“Those who oppose the new family law have started threatening legislators, railing against them in sermons and organising protest meetings. They’re also using newspapers and radio since they learned that the law is on the agenda of the current parliamentary session,” Salimata Kouyaté told IPS. Kouyaté is an activist with the Malian Network of NGOs and Women’s Associations.
The next full session of parliament is scheduled to begin on May 20, but for now there is no confirmation when the legislation will be reviewed and put to a vote.
Emblematic of the struggle is the legal definition of the relationship between a married couple. Historian Bintou Sanankoua told IPS that “Article 32 of the old law on marriage and guardianship stated that the husband was responsible to protect his wife, and the wife had to obey her husband.
“This article makes the woman a lifelong minor whose every act is subject to her husband’s approval who may, as we’ve seen in daily practice, abuse this power.”
The new law says that, “Spouses owe each other fidelity, protection, relief and assistance. They commit themselves to the community of life on the basis of affection and respect.”
Elsewhere, the new law states that women and men have equal inheritance rights, while in Muslim tradition a woman is entitled to only half the share given to her brothers. Another change is that women would no longer need their husbands’ permission to work.
For Malian public figures, merely expressing support for the law is enough to attract trouble.
“The High Islamic Council, on behalf of all Muslims, challenged twenty provisions in the draft family law that clash with our religious and societal values,” the council’s president, Mahmoud Dicko, told reporters.
“The president promised to take our claims into consideration during the rereading period, but HCI was never contacted,” he added.
While the debate on the new law has taken an alarming turn, human rights advocates are trying to warn the authorities in Mali to stand firm.
“Among the key violations of human rights in Mali in 2009, you can list women’s status,” Bréhima Koné told IPS. Koné is a lawyer and president of the Malian Human Rights Association (known by its French acronym, AMDH) based in the capital Bamako.
“The new family law is good legislation that certain people, that I don’t want to name here, are challenging. There is very little public information about its contents, and if authorities aren’t careful, Mali risks backsliding on women’s rights.”
All eyes are on the National Assembly. The tension is such that even advocates for the law are silent, fearing reprisals by radical Muslims.
“This new law is actually the old 1962 law, but updated to reflect present-day reality,” wrote a moderate Muslim cleric, El Hadj Sekou Amadou Diallo, in a letter in defence of the new law.
Diallo, after receiving death threats by telephone, was deposed by a group of imams from his position in the town of Kati, 15 kilometers from the capital.
“This standoff between supporters and detractors of the new code has lasted since last August, and it may spark a religious conflict that the country does not need,” Idrissa Maiga, a Bamako-based journalist told IPS.
SIDEBAR: Women represent nearly 51 percent of the total population of Mali, according to provisional results of the general census of population and housing, released in late 2009. Over 70 percent of them live in rural areas, 83 percent have never attended school, 14 percent have only a primary school education while only 0.1 percent have a university or postgraduate degree.
The same source shows that Malian women occupy just under 11 percent of leadership positions in decision-making bodies. There are only seven women mayors out of a total of 703, and only three of the country’s 22 ambassadors are women.
See on-line at: http://allafrica.com/stories/201005191339.html
Mauritius: Mauritius launches first Islamic banking window
The Hong-Kong and Shanghai Bank (HSBC) Ltd. launched on May 4, 2010 the first Islamic banking services window in the island, PANA learnt from banking sources.
“Today is a historic date as we launch HSBC Amanah islamic banking services that respond to the principles of the Sharia,” Sandeep Uppal, CEO of the bank said.
Uppal emphasised that the new service is being offered to global business clients “as there are many opportunities in the offshore sector.”
Uppal estimated that Mauritius can offer value to eventual clients in the Middle -East.
“We’ll focus on local clients at the appropriate time,” the CEO added.
Governor of the Bank of Mauritius Rundheersingh Bheenick said Islamic finance is not just for people of Muslim faith.
“The sound ethical principles underlying Islamic finance represent an attractive alternative to conventional financial products. Islamic finance offers advantag e s to Muslims and non-Muslims alike,” Bheenick underlined.
On the legal and regulatory view, he said Mauritius was ready for Islamic banking.
“The challenge begins when marketing Mauritius as a destination of choice for Islamic finance. It is a very competitive field that we are entering,” Bheenick observed.
The governor undertook a personal engagement to do whatever is required to help Mauritian licences implement Islamic banking successfully.
Tanzania: Islamic Banking ‘Invades’
TANZANIANS will from May 2, 2010 experience new waves in the banking sector as they start to enjoy the benefits of Islamic Banking, which forbids earning of interests in the banking transactions.
NBC Bank announced over the weekend the introduction of Islamic Banking window, which is consistent with Shariah law, just a day after another bank, Stanbic, introduced the same.
According to the NBC Bank Managing Director, Mr Christo De Vries, funds deposited in the accounts would be invested in businesses approved under Shariah Law. He said NBC’s Islamic Banking, would start with two products, Cheque Account and Savings Account.
The Savings Account will have an embedded funeral cover (Takafol death benefit) included in monthly maintenance fees.
“The products are built around the Shariah Laws which govern the way in which Muslims live their lives and conduct their daily business including financial affairs,” the MD said in Dar es Salaam.
The service, according to the bank, starts on May 2, 2010 and will be available in all their branches across the country and will be free for all people regardless of their religious affiliations.
“Muslims and non-Muslims globally are choosing to make use of Islamic Banking because it is a service that gives them the assurance investment of their money. All investments made under Islamic Banking are never associated with the traditional ‘sin’ industries such as alcohol, tobacco, gambling or pornography,” said NBC Islamic Banking Board Chairman, Dr Mussa Assad.
In terms of account opening, Islamic Banking will be conducted in exactly the same manner as opening a conventional account. However, the product features will differ, based on Shariah principles, said NBC’s Marketing Manager, William Kallage.
Tanzania is estimated to have over 40 per cent Muslim community. Mufti Shaaban Bin Simba, who witnessed the introduction of the service, said it was a relief for the Muslim community as they have for long suffered from high interest rates.
“The Almighty God forbids charging of interests. He destroys any economy that depends on interests and blesses offerings,” the Mufti said.
He noted that interest rates were the reason for the collapse of world markets and subsequently followed by world economic crisis.
The Mufti said, as a leader of the Muslim Council of Tanzania (Bakwata), he would launch a special facility within the NBC Islamic Banking machinery that would enable Muslims to put their savings to accumulate money for the annual Holy pilgrimage of Hajj.
See on-line at: http://allafrica.com/stories/201005031207.html
Tanzania: Gulf African Bank to Expand to Tanzania And Uganda
Gulf African Bank (GAB) has announced it is planning to enter Tanzania and Uganda by the end of the year. The plans follow the Islamic bank’s successful launch and growth in the Kenyan market.
Speaking during the opening of the Second Gulf African Bank Annual East and Central Africa Islamic conference in Nairobi, GAB chairman Suleiman Shahbal said the bank is pursuing licences that will see it start operations in the two East African nations.
Representatives from Bank of Uganda and Bank of Tanzania attended the conference and were expected to give advice on how GAB can successfully enter the two markets.
Shahbal said the growth of Islamic banking in Kenya in the past two years has proved its huge potential the world over.
“Countries in the region are leaning towards East African Community (EAC) integration and we want to be part of that expansion. Our strategy was to expand to East Africa after launching in Kenya, however, [those] plans were delayed by the financial crisis but now is the time to do [it],” said Shahbal.
GAB CEO Najmul Hassan said the increase in new accounts opened by both Muslims and non-Muslims has shown that the market is embracing the concept of Islamic banking.
GAB was launched in Kenya two years ago and has over 30,000 deposit accounts.
The bank is also seeking to invest in Islamic insurance, investment banking and microfinance.
“Islamic insurance is based on the principle of profit and loss sharing and should be in the market by the end of the year. Microfinance is even much more important since it is our obligation to support those who cannot access banking services. Talks and frameworks to achieve these projects are at advanced stage[s],” said Shahbal.
See on-line at: http://allafrica.com/stories/201005050008.html