Intel Offers Sharia-Compliant Financing

Intel is working with an Islamic bank to offer consumers Pakistan’s first large-scale hire purchase scheme for personal computers, aiming to increase its market share in the country.

The US chip group hopes its partnership with Karachi-based Meezan Bank will boost sales of laptops to buyers who would otherwise struggle to afford a computer in the country of 180m people. It is also considering expanding the scheme to other emerging markets.

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However, Pakistan’s Islamic banking sector has seen significant growth in recent years. Meezan, which started operations as Pakistan’s first Islamic bank in 1997, is vying for market share with a range of international Islamic banks based in Gulf countries that now offer their services in Pakistan.

For its part, Meezan wanted to promote Islamic finance, said Irfan Siddiqui, chief executive. “Our main objective is to use this for people to understand more of what the bank is doing generally.” The lender hopes that laptop customers may in turn take bigger loans from its existing range of sharia-compliant car loans and mortgages.

Meezan said it had signed hire purchase agreements for computers with 400 people since launching the scheme in May, via promotional drives at Pakistani universities. The bank is aiming to sign another 3,000 such agreements in 2012.

With the agreements typically running for 12 or 24 months, the repayments work out at roughly 100 rupees per day for the computers.

Mr Siddiqui said that so far there had not been a single default among laptop buyers. “Our default rate on this product up to now is zero – people have repaid us without any problem,” he said.

Financial Times

U.S. Taxpayers' Bailout Money Used To Finance $2 billion Islamic Bond Program

Goldman Sachs has registered a $2 billion Islamic bond programme, providing further evidence of conventional borrowers looking to sharia-complaint funding sources as market volatility makes raising debtfinance more difficult.

The investment bank has set up the Cayman Islands-registered Global Sukuk Company Limited special purpose vehicle to issue murabaha-structured sukuk, according to a base prospectus filed with the Irish Stock Exchange.

Murabaha is a cost-plus-profit arrangement which complies with Islamic law.

"In the current environment it is unsurprising to see borrowers turning to markets in which they believe liquidity is still available," Chavan Bhogaita, head of markets strategy unit at National Bank of Abu Dhabi, said.

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I guess that Goldman Sachs wasn't too honest when they revealed where bailout cash went

Sharia-compliant Banking in Canada Going Broke

photo source here

The leading promoter of Sharia banking in Canada,UM Financial Inc. has gone into receivership without much fanfare. None of the nation's newspapers have bothered to report the development, despite the fact it could possibly affect hundreds of homeowners. Had it not been for a tweet by an affected Muslim homeowner looking for a lawyer, the story of UM Financial going broke would have escaped even the scant attention the news received on social media.

Tweeting under the username @UM_FinanceBROKE, the tweeter wrote:

"Sorry Toronto Muslim Homeowners, I have bad news. I just learned UM Financial is Bankrupt. I need a good Canadian lawyer"

The troubles at UM Financial did not come overnight. As far back as April 2007, the Toronto Star reported on the company's liquidity problems.The Star wrote that Omar Kalair, the founder of UM Financial, "is working hard to maintain on-going sources of funding." Kalair disclosed that the Credit Union Central of Ontario had extended an additional $50 million to the Sharia banking promoter, and "that will keep us going until the summer." Apparently, this month the money ran out and UM folded tent.

The consequences of this bankruptcy may effect thousands of Muslim homeowners. Leading up to the bankruptcy, there were quiet rumblings of discontent in the community. One indignant Muslim homeowner wrote to the Toronto Star:

"In the name of Shariah-compliant mortgages they charge extra fees... After accepting and approving our application, they refused us financing just a week before the closing of our home, thus putting us into great trouble... This last-minute refusal made us get a mortgage from an alternate source at a higher interest rate and spend an extra $2,500 for moving costs and living in a hotel with the entire family for one week."

What is Sharia Banking?

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Australiastan: Sharia-compliant Banking Introduced in Australia

A MUSLIM wealth manager has begun the process of opening Australia to Islamic investment with the launch of the first local sharia-compliant equity fund.   

The goal of Crescent Wealth, Australia's only Islamic wealth manager, is to establish a range of investment products, including superannuation, to give Australians access to the previously untapped $1.4 trillion Islamic investment market.

Nigeria, Thailand, Australia and France Plan to Introduce Legislation to Facilitate Sharia-Compliant Banking

Bahraini group that sets standards for Islamic finance in 45 countries is helping universities start courses in Sharia-compliant business practices to avert a shortage of experts in the US$1 trillion (Dh3.67tn) market.

The industry will need 15 per cent more personnel over the next five years and 25 per cent more in a decade, said Khairul Nizam, the deputy secretary general of the Accounting and Auditing Organisation for Islamic Financial Institutions. Pakistan is offering its first doctorate in Sharia banking, while the UAE has introduced an Islamic Masters of Business Administration.

"There is a shortage of people in the industry at the entry level," Mr Nizam said. "We will need to make sure there are enough heads in the future."

Sharia-compliant bonds returned 6.9 per cent this year, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index, outpacing the 5.9 per cent jump in emerging-market debt, data compiled by JPMorgan Chase shows. Countries including Nigeria, Thailand, Australia and France plan to introduce legislation to facilitate Islamic financing, moves that will boost demand for scholars to certify that the products meet requirements on no interest payments.

Sharia-Compliant Banking Suggested in Oman

 Panel of international Islamic finance experts yesterday said Oman’s banking and finance sector can learn from other countries’ experiences in Islamic banking, which is a new field here.

At a seminar hosted by Deloitte at the Intercontinental Hotel, the experts gave advice to local members of the finance industry on way of implementing Sharia-compliant banking in the Sultanate.