العدد الحالي: تشرين 1/اكتوبر 2018       اختر عدد :
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كلمة المجلس العام

Abdelilah BELATIK

Secretary General of CIBAFI

Welcome to the 46th edition of the Global Islamic Economics Magazine (GIEM). As always, it is our pleasure to keep you updated with the latest developments, and the current challenges and opportunities in the global Islamic finance industry. The GIEM also serves as the platform for CIBAFI to keep its stakeholders informed about its activities and key initiatives.

Firstly, as part of the Strategic Objective 3: ‘Awareness and Information Sharing’, CIBAFI organized a Roundtable Meeting in Jeddah, Kingdom of Saudi Arabia, in collaboration with the Islamic Development Bank (IDB) to address challenges in the Islamic Micro and Small and Medium Sized Enterprises (MSME) financing. The Meeting gathered more than 60 senior executives of Islamic Financial Institutions (IFIs) from 17 jurisdictions to explore and share viable market practices to 'build robust technical capabilities' in providing Islamic MSME finance.

The first part of the Meeting highlighted key issues on regulatory and market infrastructures for MSME finance with respect to important regulations to boost Islamic MSME finance market. This included issues such as secured transaction laws, regulations, prudential standards, taxation, insolvency framework and reporting, SME capital market, and crowdfunding platform for SME etc. The second part of the Meeting shed light on areas of leveraging from advanced technologies, the risk management and technical infrastructure for Islamic MSME Finance to generate sustainable business, and the core processes required for innovation. The intersection between MSME and the concept of risk sharing of Islamic finance has been elaborated in the concept of BMT (Baitul Mal wa Tamwil).

Leading practitioners presented important case studies from Sudan, Tunisia, and Malaysia, which served as a demonstration of best practices of Islamic MSME finance across different jurisdictions. In addition, the Meeting also had special case related to the IDB Awqaf Properties Investment Fund (Awqaf FUND).

Additionally, as part of the Strategic Objective 3, CIBAFI and IRTI signed a Memorandum of Understanding (MoU) for a joint project to establish the first-of-its kind Islamic financial industry data repository. The online repository, is named ‘Islamic Financial Industry Intelligence (IFII)’, and is aimed to be a one-stop-shop for a comprehensive and reliable Islamic financial and non-financial data and information. IFII would comprise several integrated databases covering all the components of the Islamic finance industry—including banking, insurance, and social finance. In the first phase, the system will kick off with a database of Islamic banking information. IFII is expected to be a vital resource for Islamic financial institutions, policymakers, regulatory authorities, industry professionals, academics, scholars, and other stakeholders. IFII will come with state-of-the-art built-in features to allow for report generation, data visualization, and download of financial datasets.

Lastly, financial innovation is an important component of a growing Islamic financial industry. Banks and financial institutions that constrain their investment in innovation usually face challenges in their long-term growth. Top management and policymakers must understand the need, prioritise and allocate sources of funding their business innovation activities. Islamic financial industry while still in its initial growth phase in different jurisdictions around the globe, face challenges in financing innovation. While investing in innovation has certain amount of uncertainty in terms of returns due to its dynamic nature, it is bound to produce intangible benefits to institutions.

The Global Islamic Bankers Survey revealed that Islamic bankers see many ways in which they will be able to expand in future. Over a dozen business lines are considered important in driving growth. Expanding to new business lines such as fee-based activities (asset management, securitization, structured finance, private equity, etc.) aligned to principles of Islamic finance and responsible business will deliver high “good growth” opportunities for the industry.

Against this backdrop, CIBAFI, under the patronage of the Central Bank of Bahrain (CBB), is privileged to bring together top industry experts and professionals at the inaugural CIBAFI Global Forum on 3 – 4 May 2016, at the Four Seasons Hotel, Manama, Kingdom of Bahrain. The Forum,“Rethinking Values for Sustainable Growth”, aims to explore strategies to achieve materiality of social responsibility business practices on financial performance, through optimizing these ESG factors, and examine their development impacts on Islamic financial institutions (IFIs). The Forum will also identify current opportunities available to the industry to support ‘good growth’ and to counter challenges through business innovation, through FinTech solutions and structured finance, among others. Beside sustainability, business innovation is one of the main themes that CIBAFI Global Forum aims to cover.

CIBAFI will continue to focus on its role as an important link between the various stakeholders of the Islamic financial industry in achieving its strategic goals. Stay tuned!