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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook 1 IS LA M IC FIN A N C E SU M M IT ,M auritius 2 0 0 7 1 2 -1 4 D ecem ber 2007 Islamic Finance through Co- operatives in Mauritius Mr. Raffick Nabee Mohomed Founder & Secretary Al Barakah Multi-purpose Co-operative Society Limited
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1 Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook Islamic Finance through Co-operatives in Mauritius.

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Page 1: 1 Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook Islamic Finance through Co-operatives in Mauritius.

Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

Islamic Finance through Co-

operatives in Mauritius

Mr. Raffick Nabee MohomedFounder & SecretaryAl Barakah Multi-purpose Co-operative Society Limited

Page 2: 1 Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook Islamic Finance through Co-operatives in Mauritius.

Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

About The SpeakerAbout The SpeakerMr. Mamode Raffick NABEE MOHOMED

The Founder and Secretary of Al Barakah Multi-purpose Co-operative Society Limited, Mauritius. Mr. Nabee Mohomed holds a Bachelor of Commerce, a Post Graduate Certificate in Education as well as a Post Graduate Diploma in Islamic Banking & Insurance. He is an Education Officer, also a lecturer on Islamic Banking as well as Finance and is an Associate Fellow of the Institute of Islamic Banking and Insurance which is based in London. Mr. Nabee Mohomed has also done a thesis on the empirical study of the Muslim Family in a rural set up. He has presented the case study of Al Barakah Co-op at conferences and seminars in Trinidad & Tobago, India and Pakistan.

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

About Our OrganisationAbout Our Organisation

PIONEER IN ISLAMIC FINANCE IN MAURITIUSPIONEER IN ISLAMIC FINANCE IN MAURITIUS

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

AL BARAKAHAL BARAKAH Idea of establishing an Islamic bank Idea of establishing an Islamic bank

in Mauritius in 1990’s.in Mauritius in 1990’s. Preliminary work carried out by Preliminary work carried out by

Islamic organizations.Islamic organizations. Emergence of a Credit Union in the Emergence of a Credit Union in the

Co-operative sector ( Co-operative sector (AL AL BARAKAHBARAKAH))

About Our OrganisationAbout Our Organisation

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

AgendaAgenda Integrating Islamic Finance in Co-Integrating Islamic Finance in Co-

operativesoperatives Legal FrameworkLegal Framework Products & ServicesProducts & Services ChallengesChallenges Q&AQ&A

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

Islamic Finance through Co-operatives Islamic Finance through Co-operatives Integrating Islamic Finance in the co-Integrating Islamic Finance in the co-

operative sector:operative sector:(1) Islamic Finance–based on Islamic ethics: justice, (1) Islamic Finance–based on Islamic ethics: justice,

fairness, sharing, co-operation, benevolencefairness, sharing, co-operation, benevolence(2) What is a Co-operative ? (2) What is a Co-operative ? - A co-operative is an autonomous association of - A co-operative is an autonomous association of

persons united voluntarily to meet their common persons united voluntarily to meet their common economic, social and cultural needs and economic, social and cultural needs and aspirations through a jointly owned and aspirations through a jointly owned and democratically controlled enterprise.democratically controlled enterprise.

- Based on principles & values: honesty, - Based on principles & values: honesty, openness, equity, equality, democracy, solidarity openness, equity, equality, democracy, solidarity etc.etc.

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

Why co-operatives?Why co-operatives?(1)(1) Legal frameworkLegal framework(2)(2) ValuesValues(3)(3) Easy formationEasy formation(4)(4) Small capitalSmall capital(5)(5) Co-operative sector is more people-orientedCo-operative sector is more people-oriented(6)(6) “ “ Co-operate Co-operate in what is good and pious and do in what is good and pious and do

not co-operate in what is sinful and wicked….” not co-operate in what is sinful and wicked….” (Q-5:2)(Q-5:2)

(7)(7) Islamic Finance within the co-operative sector Islamic Finance within the co-operative sector around the globe.around the globe.

(8)(8) Mauritius?Mauritius?

Islamic Finance through co-operatives Islamic Finance through co-operatives

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

Islamic Finance through Co-operatives in Mauritius

Formation of Al Barakah (Registered Formation of Al Barakah (Registered on 10on 10thth June 1998): June 1998):

1.1. To provide an alternative to the interest-To provide an alternative to the interest-based financial institutionsbased financial institutions

2.2. To provide halal investment To provide halal investment opportunities and returns.opportunities and returns.

3.3. To contribute in the overall development To contribute in the overall development of the economy.of the economy.

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

LEGAL FRAMEWORKLEGAL FRAMEWORK

Operates:Operates: Within the Co-operative Societies Act Within the Co-operative Societies Act

2005 2005

Within the framework of its rules and Within the framework of its rules and

regulationsregulations

In accordance with Islamic Financial In accordance with Islamic Financial Laws.Laws.

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

VISIONVISION To be a leading Co-operative To be a leading Co-operative

Society in the field of Islamic Society in the field of Islamic Finance for a fair and just society.Finance for a fair and just society.

MISSIONMISSION To operate as a financial To operate as a financial

institution based on Islamic co-institution based on Islamic co-operative principles and providing operative principles and providing a wide range of services on an a wide range of services on an interest-free basisinterest-free basis

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

PRODUCTS & SERVICES BASED ON ISLAMIC FINANCIAL PRODUCTS & SERVICES BASED ON ISLAMIC FINANCIAL TECHNIQUESTECHNIQUES

Schemes based on MurabahahSchemes based on Murabahah

1. 1. Household General FinancingHousehold General Financing

2. Computer Financing2. Computer Financing

3. Traders/Entrepreneurs Financing3. Traders/Entrepreneurs Financing

4. Home Financing4. Home Financing Istisnaa Financing (Manufacture-Sale)Istisnaa Financing (Manufacture-Sale) Interest-Free Loan (Qard-al-Hasan)Interest-Free Loan (Qard-al-Hasan) PartnershipPartnership with shareholderswith shareholders

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

Computer FinancingComputer Financing To purchase new computers sets, Laptop, etc...To purchase new computers sets, Laptop, etc...

Above Rs 10,000 - 50,000Financed the shares

ContributedRs 25025%

48 Months1 or 2 Sureties

Shares / Assets / ComputerRs 100

1 Month Instalment Yearly

4 timesAmount

Financing Limit

Processing FeeMark-Up

Repayment PeriodSurety

CollateralShare Rider

Waiver

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

Our Special FundsOur Special Funds

1.1. ISLAMIC FINANCE RESEARCH ISLAMIC FINANCE RESEARCH EDUCATION & TRAINING FUND EDUCATION & TRAINING FUND (IFRET FUND) (IFRET FUND)

2.2. SOLIDARITY FUND SOLIDARITY FUND

3.3. DIVIDEND EQUALISATION FUNDDIVIDEND EQUALISATION FUND

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

OTHER ACTIVITIESOTHER ACTIVITIES

Creating awareness about Creating awareness about Islamic Finance.Islamic Finance.

Organizing lectures, seminars, Organizing lectures, seminars, conferences and workshop.conferences and workshop.

Organizing mini trade fair/socio-Organizing mini trade fair/socio-cultural programme.cultural programme.

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

CHALLENGESCHALLENGES

1.1. Individual/organisational/Individual/organisational/government levelgovernment level

2.2. Legal frameworkLegal framework

3.3. Public acceptancePublic acceptance

4.4. Economic potentialEconomic potential

5.5. Human ResourceHuman Resource

6.6. Mass EducationMass Education

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Islamic Banking – The trends, challenges & best practices worldwide & the Mauritius-African outlook

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

CONCLUSIONCONCLUSION

1.1. 9 years of operation9 years of operation

2.2. An eye-openerAn eye-opener

3.3. Islamic finance at different levelsIslamic finance at different levels

4.4. Well-being of all citizensWell-being of all citizens

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

ReferencesReferences An introduction to Islamic FinanceAn introduction to Islamic Finance By Mufti Mohammad Taqi UsmaniBy Mufti Mohammad Taqi Usmani Meezan bank’s guide to Islamic Banking Meezan bank’s guide to Islamic Banking By Dr. M. Imran Ashraf UsmaniBy Dr. M. Imran Ashraf Usmani A model of pure interest–free bankingA model of pure interest–free banking By Mohammad Saeed ShingeriBy Mohammad Saeed Shingeri A compendium of legal opinions on the operations of A compendium of legal opinions on the operations of

Islamic Banks Islamic Banks By Yusuf Talal DelorenzoBy Yusuf Talal Delorenzo Islamic Law of Business OrganisationIslamic Law of Business Organisation By Imran Ahsan Khan NyazeeBy Imran Ahsan Khan Nyazee www.mcca.com.auwww.mcca.com.au www.bankrakyat.com.mywww.bankrakyat.com.my www.isnacanada.com/achc.htmwww.isnacanada.com/achc.htm www.solbaram.org/articles/credun.htmlwww.solbaram.org/articles/credun.html www.ica.coopwww.ica.coop [email protected]@tstt.net.tt

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

Q & AQ & A

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ISLAMIC F INANCE SUMMIT, Maur it ius 200712-14 December 2007

M. Raffick Nabee MohomedM. Raffick Nabee Mohomed

E-mail: E-mail: [email protected]@hotmail.com

Tel: (230) 6275766, 7781738Tel: (230) 6275766, 7781738