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  1. #8
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    BRUSSELS, November 22, 2009 (KUNA) -- A financial firm in Luxembourg has developed a concept combining some of the modern financial techniques with the principles of Sharia (Islamic law) to design a new type of investment set up which it has named "Imtiaz". "Islamic finance is an opportunity for the world to develop a new ethical approach in financing a variety of projects and, definitively, in encouraging entrepreneurship," Jean-Paul Letombe, Managing Director of the firm Otim Business Solutions, told KUNA in an interview. He explained that the turmoil in conventional finance was big enough to "force us to reconsider what we did and how we did it for many years". "Increase of regulation should help but the best of all would be to change in our minds the way we see things, and to adopt new and better practices in designing and running financial products," he said.

    Letombe was in Brussels to attend a conference on Islamic banking held last week."Here is the point where we should consider Islamic finance as a large part of the answer, especially if we focus on its foundations rather than just on the technical content of its contracts," said the European finance expert. "With the generous help of people in the Middle East, we have discovered Islamic finance by learning first its foundations and holy values, and next by looking through the different contract types," he stated. "Progressively we got a better understanding, and when we got enough confidence we humbly combined some of the financial techniques already in our hands with the principles of Sharia, to design a new type of financial product that we named Imtiaz," Letombe added.

    Imtiaz is a product involving investors, a financial company, an engineering company, and a state-owned company for a period between 15 to 30 years, and by using the "concession principle" (Imtiaz). In essence, one or many investors can collectively invest directly into the development of an industrial project where a nominal production can be estimated for example typically in a, but not limited to, power/water/vegetable plant. Under the concept, the design, development, operating and maintenance of the project is managed by the engineering company acting as a Mudarib. Letombe says Imtiaz has the potential to deliver high returns (six percent to 15 percent and eventually a bit more) without the use of any leverage, speculation, or complex structures. "Imtiaz will never put excessive pressure to maximize returns to repay debt, because there is no leverage at all. We are open to share and to refine our Imtiaz concept with those Islamic financial institutions that may be interested in the subject," he told KUNA.

  2. #9
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    PARIS, Mercredi 3 Février 2010 -- La finance islamique, qui a bien résisté à la crise financière mondiale, devrait maintenir sa croissance soutenue en 2010, a prévu l'agence de notation Standard and Poor's (S&P) dans une étude publiée lundi. "Nombre d'institutions financières islamiques semblent avoir été préservées de la crise financière mondiale, ce qui est probablement attribuable, selon nous, au fait que les principes de la loi islamique interdisent les intérêts", estiment les analystes de S&P. Ces principes de la loi islamique (Charia) auraient ainsi dissuadés les banques islamiques d'investir dans des produits financiers complexes qui étaient à l'origine de transmission de la crise financière.

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    Lundi 31 Mai 2010 -- La banque Zitouna est la première du pays à répondre aux exigences de la finance islamique, qui interdit l’intérêt et la spéculation, et implique une responsabilité sociale. Disposant d’un capital de 19 millions d’euros, la banque compte attirer les investisseurs étrangers. Agréée en 2009, la banque Zitouna, dernière-née du système bancaire tunisien, a ouvert ses premiers guichets vendredi dernier. Ce nouvel établissement dirigé par Abou Hafs Amor Najaii possède une particularité : il est spécialisé dans la finance islamique. C’est une première en Tunisie où aucune des 21 banques de détail n’a encore choisi cette approche. «Dans un contexte de crise, la finance islamique a été identifiée comme une alternative crédible et sûre, a expliqué le secrétaire général de la banque, Hichem Ben Fadhl, au journal français le Figaro. Des personnes recherchent des produits financiers conformes à leurs principes. Or, il n’existe pas encore d’offres de ce type en Tunisie.»

    La finance islamique interdit l’intérêt, la spéculation et implique une responsabilité sociale de l’investissement, l’incertitude est proscrite, les contrats sont stables dans le temps. Les profits d’une opération donnée sont partagés entre la banque et son client. Par ailleurs, les placements dans les jeux de hasard, le commerce des armes, le tabac, l’alcool sont prohibés. Actuellement, une seule des 10 banques «offshore» installées dans le pays est ouverte à la finance islamique, dont le volume d’affaires atteindrait 700 milliards de dollars dans le monde, selon les estimations communément admises. L’une des ambitions de la banque Zitouna, dont Mahfoudh El Barouni préside le conseil d’administration, est de proposer dans un avenir proche aux investisseurs internationaux un produit compatible avec la charia et participant au financement de l’économie tunisienne. La banque dispose d’un capital social de 19 millions d’euros (35 millions de dinars) qui devrait atteindre 54 millions d’euros (100 millions de dinars) l’année prochaine.

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    November 12, 2011 -- For Algerian consumers seeking to avoid interest payments, sharia-compliant mortgages and other loans remain limited by an inadequate legal, institutional, and regulatory framework. An Islamic financing forum held Tuesday (November 9th) in Algiers examined how to satisfy these clients. "The law on money and credit permits Islamic banking transactions and products, including mortgages, because these products don't constitute any breach of the Algerian law, and not because these financial institutions are compliant with the principles of Sharia," said Zoubir Ben Terdeyet of Isla Invest Consulting, which helped organise the conference. Ben Terdeyet confirmed that this financial concept is deemed an important alternative solution, as it includes measures that can curb inflation and avoid financial crises that lead to bankruptcy.

    Al-Baraka Bank chief Nacer Haidar highlighted the importance of the Islamic banking system in solving the problem financing private-sector businesses. He also emphasised the need to expand the scope of Islamic financing system in Algeria, calling for implementing murabaha (sale on profit) at the level of banks and for using funds to expand production and providing means of work. ''The share of the Algerian banking market doesn't exceed 1% of the total assets circulated around the world," Haider said, adding that measures included in the Islamic banking system would put an end to the tax problems with investments and riba-based practices that cause financial crises. Algerian authorities need to "enact special laws for some Islamic banking products, as was the case with financing through musharaka (joint venture), which complies with the laws and procedures related to investment capital," Haidar said. "In Algeria, 99% of the real estate loans that are granted by banks are based on interest rates," said Abdelkader Beltas, general manager of the Mortgage Refinancing Company. "Although this formula is prohibited in Islam, people continue to borrow money to buy housing units in the absence of alternative formulas."

    There are four financial institutions operating as per Islamic financial principles in Algeria: al-Baraka Bank, Gulf Bank in Algeria, al-Salam Bank and Salama Insurance Company. However, the share of Islamic banks in the Algerian market is still marginal, not exceeding 1.5%. Public banks control the banking sector in Algeria, where the private banks only constitute 12%. During the discussion of the Bank of Algeria governor's report last October, some lawmakers representing Islamic parties in the parliament raised the question of poor Islamic financing options. One of these MPs, Mohammed Hadibi of the Ennahda Movement, criticised the pressures exerted on banks that operate according to sharia rules in Algeria, compared to the complete freedom given to European banks that operate in country. He also called for implementing the Bank of Algeria governor's obligation by opening Islamic windows at public banks. The government responded to these demands by amending the Law on Money and Credit, after consulting experts in Islamic banking and specialists in the fighs of Islamic sharia. Passed in May 2010, the amendment will take effect next January. It aims to reconcile the current financial system in Algeria and get it closer to the rules of Islamic transactions, especially with regards to interest payments at traditional banks.

  6. #13
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    April 14, 2011 -- Algeria needs legal reforms to encourage the growth of sharia-compliant finance, bankers and business experts concluded at a Monday (April 11th) symposium in Algiers. The El Moudjahid forum attendees stressed that allowing the sector to grow would reduce unemployment and create new businesses. Islamic finance currently accounts for 1% of banking activity in Algeria. Fouaz Sid, a bank clerk working for the Algerian arm of the French bank Société Générale, said he hopes that possible legal changes to the banking system would help to introduce more diversity into financial products. "For this to happen, we'd like to see legal changes being introduced to make every product which conforms to sharia law able to compete with the more traditional products. This would give us a legal footing and encourage us to diversify finance products in Algeria," Sid said. On Tuesday, the chairman of the MSP's parliamentary group, Mohamed Said Boubekeur, called for traditional banks to open counters dedicated to Islamic banking. This "in no way means getting rid of the traditional banking operations currently available, but rather supporting them with another kind of operations which will satisfy sharia law," Boubekeur said.

    One of the arrangements offered by Islamic financiers to avoid usury is called Murabaha, a purchase and resale contract in which the bank buys a material good from a supplier at its customer's request, and the price at which it is sold on to the customer is based on the cost price plus a profit margin. Other such finance tools include Salam, a purchase contract involving the deferred delivery of goods. For agricultural finance, Istisnaa can be used prior to delivery while lease-purchases can be used for financing long-term projects. Other options include Qard Hassan (a gracious loan), which serves as a loan without interest, usually tied to a debt security instrument. Finally there is Ijarah, a lease-purchase agreement by which a party leases an item for a fixed rent and period. Under these mechanisms, "any financial profitability must be justified by economic profitability," explained Sid.

    The faltering performance of Islamic finance in Algeria should give way to a more audacious approach inspired by those adopted by key international finance locations, according to Mustapha Bouazza, an MP for the Movement for the Society of Peace (MSP). The law on money and credit "lacked clarity when it came to the activities of the Islamic banks", economist Abdelmalek Serrai said. He blamed delays in reforming the sector on the "dominance of state-owned banks". However, Nacer Haidar, Secretary-General of Al-Baraka Bank, the first one to specialise in Islamic banking products in Algeria, said that his institution's success bore witness to the "flexibility of the Algerian authorities when dealing with Islamic products". "If there is any resistance, then it's not to do with the Islamic products, but it's a characteristic of the financial market in Algeria, which is still lagging behind in terms of product diversification," he said. Algeria has one bank branch for every 26,000 people, compared with one branch per 7,000 people in neighbouring countries and one for every 2,000 in developed countries, according to Haidar. He added that his bank was willing to help fund projects to reduce youth unemployment, provided that they were "economically profitable".

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