With mystic peaks, coral reefs, jungles and over 4,000 hours of annual sunlight, Malaysia’s Sabah state is an ideal candidate for clean energy initiatives. But what makes its 50-megawatt solar project, launched in April 2018, special isn’t just its potential to provide electricity to this northern Borneo region. The project is the outcome of funds raised from the world’s first Islamic green bond, with a value of $60 million, unveiled by Malaysia’s Securities Commission in July 2017.
Saudi Arabia’s Islamic Development Bank (IDB) signed an investment agreement in November with i-FinTech Solutions, a Tunisia-based advisory firm, to create a series of shariah-compliant tools to help Islamic banks with liquidity management issues. The first product announced is i-Trade, a blockchain-based, real-time transactional platform that helps conventional and Islamic banks transact with each other.
Blockchain technology is still a controversial topic in Islamic finance. Nevertheless, the Middle East as well as Southeast Asia are home to a growing number of Islamic fintechs.
Malaysia’s takaful market is expected to receive a boost as the government of the Muslim-majority nation seeks to improve access to insurance and increase penetration, according to a report by Fitch Ratings.
The greater adoption of technology, especially in distribution, will help takaful operators reach untapped segments of the population, including younger consumers.
The global issuance of Sharia-complaint foreign and local currency bonds this year is expected to reach as much as $115 billion (Dh422.1bn), the same level of 2018, with oil prices being a determining factor of total size of sales, according to S&P Global Ratings.
The total sukuk issuance from the six-member economic bloc of GCC is expected to climb to $47.6bn, slightly higher than $46bn achieved in 2018, with Saudi Arabia leading the sovereign issuers from the region, S&P said on Tuesday.
On February the 6th an African Interest-Free Banking and Finance Forum (AIBFF) will convene in Addis Ababa – Ethiopia to explore and discuss innovative financial inclusion strategies for Islamic banking in Africa.
The idea is to create clear pathways to financial and economic Solutions. This Apex event is organized by AlHuda CIBE.
In 2015, 195 countries signed the historic Paris Agreement on tackling climate change, an ambitious attempt to build on the United Nations Framework Convention on Climate Change by binding all signatory countries to a common approach for creating and implementing a global response to the challenges posed by climate change, including through innovative financing initiatives.
However, since then, with the tightening of government budgets and more immediate policy priorities, green financing has not been at the forefront of the agenda as has been most notably evidenced by the withdrawal of the US from the Paris Agreement.
Tatarstan, an autonomous republic of the Russian Federation, is pushing hard to make its capital city Kazan a new center of Islamic finance for Russia and the region, Tatarstan President Rustam Minnikhanov says.
Answering a question from Capitol Intelligence/GCA at the KazanSummit between Russia and the Organization of Islamic Cooperation (OIC) several months ago, Minnikhanov said his government was pushing through legislation in the Russian Duma that would enable the issuance of Islamic financial instruments such as sukuks (Islamic bonds) on the Russian market.
Iran is developing a range of new financial products, from Islamic bonds to warrants and insurance-linked securities, in an effort to give local firms more funding options as sanctions put pressure on the economy.
The Iranian rial has plunged 70 percent against the U.S. dollar in the free market this year, inflation has risen and foreign trade has been disrupted after Washington repudiated an agreement on Tehran’s nuclear program and reimposed sanctions.
More and more banks in the Islamic world — a community of nearly 2 billion people worldwide — are adopting blockchain technology and cryptocurrency. As early as 2016, major Islamic banks such as ICICI Bank and Emirates NBD began researching blockchain's capabilities to reduce transactional costs, according to Coindesk. In 2017, the UAE’s Emirates Islamic became the first Islamic bank to use blockchain technology, namely for fraud prevention. In April, an Islamic scholar declared bitcoin permissible under Sharia law after a study conducted by Blossom Finance, an Indonesian investing firm, investigated the functionality of bitcoin and similar cryptocurrencies, and found that they were congruent with Islamic definitions of money.
Islamic trade finance is poised for change with the launch of new products and common standards as Islamic banks look to grab market share away from traditional lenders which are retreating from the sector because of regulatory constraints.
Islamic banks have been laggards in trade finance but some see a business opportunity, attracted by strong global trade growth in regions where Islamic banks are active such as Southeast Asia, North Africa and the Middle East.