4th international conference & exhibition on islmaic banking & takaful

8/8/2019 4th International Conference & Exhibition on Islmaic Banking & Takaful

1/28

Mr. Mamode Raffick Nabee

MohomedFounder/SecretaryAl Barakah MCSL

ISLAMIC FINANCIAL CO-OPERATIVESISLAMIC FINANCIAL CO-OPERATIVES

TO MEET THE FINANCIAL NEEDSTO MEET THE FINANCIAL NEEDS OF

THE COMMUNITY

Case Study Of:

Al Barakah Multi-purpose Co-operative society LimitedMauritius

4th International Conference & Exhibition on Islamic Banking & Takaful2 November 2010, Lahore, Pakistan


2/28

Mr. Mamode Raffick NABEE MOHOMED

Founder and Secretary of Al Barakah Multi-purposeCooperative Society Limited, Mauritius.

Mr. Nabee Mohomed holds a Bachelor of Commerce, a PostGraduate Certificate in Education and a Post GraduateDiploma in Islamic Banking & Insurance (IIBI-London). He is astudent at IIIBF for the PG Dip. in Islamic Finance. He is anEducator, also lectures on Islamic Banking & Finance and is anAssociate Fellow of the Institute of Islamic Banking andInsurance which is based in London.

Mr. Nabee Mohomed has also done a thesis on An empiricalstudy of the Muslim Family in a rural set up.

He has acted as panelist and speaker at InternationalConferences and seminars on Islamic Finance and presentedthe case study ofAl Barakah MCSL in Trinidad &Tobago,India, Pakistan, Malaysia and South Africa. He has alsoattended several short courses and training.


3/28

Muslim Credit Union (Trinidad & Tobago)- Training in Islamic Finance at M.C.U (3rd Feb. to 21 Feb. 1999)

National Cooperative Training Centre, Mauritius- Management & Leadership for Leaders of Cooperative CreditUnions, (24 & 25 Oct.2001)

Cooperative College of Malaysia- Project Preparation and Appraisal (23-27 February 2004)- Corporate Governance (23-26 May 2005)

Association of Asian Confederation of Credit Unions (ACCU)- Modern Management of Cooperative Credit Unions (02-03 July2008)

International Islamic University, Islamabad (Pakistan)- Attended the 22nd International Programme for Human ResourceDevelopment from 14/11/2005 to 14/12/05 at Dawah Academy,Islamabad.

Cooperative Muslimine Malaysia Berhad (Malaysia)-Internship in Islamic Finance & Islamic Accounting for IslamicCo-operative Societies (15 December 2008-02 January 2009)


4/28

Islamic Finance & Islamic Financial Institutions Concept of Co-operatives

Islamic Financial Co-operatives Financing intruments of IFC Reserves & Funds Case Study of Al Barakah Multi-purpose Co-op Society Ltd.-

Mauritius

Geographical background & Muslims in Mauritius Islamic Banking & Finance & Muslims in Mauritius Integrating Islamic Finance in Cooperatives Organisation of Al Barakah Legal Framework Products & Services Other activities Challenges Conclusion Opportunities with Al Barakah for Islamic Banking &

Finance in Mauritius


5/28

Islam is a practical way of life with its own system Inheritance in the economic sphere & scholars at

work Initiatives-No working model & since 1960s IBF

startedMit Ghamr 1963 Emergence of IFI & growth

Satisfaction/CriticismTypes of Islamic Financial Institutions (IFI) Dominance & neglected areas & Evolution


6/28

According to Professor Rodney Wilson Formal Islamic banking firstemerged in the early 1960s through credit unions of Muslim landowners inEgypt and Pakistan who simply pooled their resources and could then in turndraw out funds for agricultural improvements on a non-interest basis. (Theevolution of Islamic banking and emerging trends in Islamic Finance)

Interest Free Financial institutions (IFFI) of India are the forerunners in thehistory of global Islamic financial movement. Tracing the history of growth ofinterest free financial institutions in India, it is reported that such organized

credit society had shown its presence as early as 1890. According to thedirectory of Islamic banks in India, such efforts in the organized sector in thestyle of the Patni Cooperative Credit Society Ltd. was established in1942A recent study conducted by Bagsiraj (2003) shows that there areinstitutions that have grown to a size of 14 Islamic Cooperative Credit Society(ICCS) in India. It may be noted that these institutions primarily fulfill thecasual social needs of the people at a very small scale.(Dr Rahmatullah-IFFI of India in crisis/Bagsiraj-IFII,published by KAU, Jeddah

in 2003)

The history of Islamic Financial system in Thailand started with theestablishment of a cooperative society, Pattani Islamic Saving Cooperativethat operates based on shariah in 1987.. These Islamic cooperative societieshave successfully established themselves as viable financial institutions inmanaging and mobilizing Muslims in this region. ( Islamic banking in Thailand:prospects and challenges (Sudin Haron & Kumajdi Yamirudeng)


7/28

Concept of cooperative: - From the beginning of human society, cooperation has

always been a vital factor in human development.- As a social creature, it is the natural urge of man tocooperate with each other.

- Cooperation conveys the idea of helping each otherand making joint efforts to achieve a common goal.

The Cooperative movement emerged in the middle ofthe 19th century by the Rochdale Pioneers. On the 24thOctober 1844, in Rochdale, Lancashire England, a group

of people faced with economic exploitation anddeprivation set up a cooperative store, based on theprinciples of self-help and mutual help. They defined aset of principles which became the basis for thecooperative ideology which has spread all over the worldbe it a capitalist, socialist or Muslim society.


8/28

A cooperative is an autonomous association of

persons united voluntarily to meet their commoneconomic, social and cultural needs and aspirationsthrough a jointly owned and democraticallycontrolled enterprise. (www.ica.coop)

7 principles of cooperatives:1. Voluntary and open membership (VoM)2. Democratic member control (DmC)

3. Member economic control (MeC)

4. Autonomy and independence (A&I)5. Education, training and information (EtI)

6. Co-operation among co-operatives (CaC)

7. Concern for community (CfC)
http://www.ica.coop/http://www.ica.coop/http://www.ica.coop/http://www.ica.coop/


9/28

Sectors of the economy-PMT

Class of Co-op societies/Multi-purpose Co-operatives- Consumer Co-op, Producers, Marketing, Housing,Catering, Financial Co-operatives/Credit unions etc.

What is a Credit union?- A credit union is a financial cooperative that may

accept savings, deposits, provide credit and otherfinancial services to its members.- Credit Unions are financial cooperatives which are ineffect community banks.- Membership: people from all walks of life,- Common bond- Owned & controlled by shareholders/members- Capital: mobilising from shares ,savings & depositsfrom members- Financing/not for profit maximisation- Surplus-back to shareholders


10/28

Generally Conventional co-operatives/credit unions

are interest-based Credit unions called by different names:

- In Africa-Savings And Credit Cooperative Societies(SACCOS) which emphasise on savings before credit.- In Afghanistan-(IIFC) Islamic Investment andFinance Cooperatives which comply with sharia.

IFC are institutions based on the principles of IslamicFinance.

Efforts over the past 30 years to set up IFC Community-based and providing Islamic financial

services to the community Islamic Financial Co-operatives around the globe

(T&T, Canada, Malaysia, Thailand, Indonesia,USA, Australia, India, Singapore,Afghanistan)


11/28

Why IFC?1. Conceptual framework

Cooperate with all in what is good and pious and do not cooperate in what

is sinful and wicked. (Q-5:2)2. Legal framework is less regulated than the corporate sector (Cooperative

Societies Act ,CU Act) Shariah-compliant3. Values - Islamic Financebased on Islamic ethics: justice, sharing,

cooperation.- Cooperatives based on values: honesty, equity, equality, solidarity,

self-help, etc.4. Easy formation & more elastic

5. Small capital requirement6. Community based & more people-oriented( IEViews..)7. Spread ownership of business and reduce concentration of wealth8. Different purposes - open to any type of economic activity9. Incentives & Benefits Tax10. Democratic


12/28

Murabahah Ijarah Mudarabah Musharakah

Diminishing Musharaka Istisna Qard-ul-hasanah/IFL


13/28

Statutory Reserve according to Coop Act Dividend equalization Fund Social Takaful Fund Profit Equalisation Reserve

Zakat Fund


14/28

Al BarakahMulti-purpose Co-operative Society

Limited

Mauritius


15/28

Mauritius-gateway to Africa, South Asia & Asia Multi-religious society:

Population-1.3 M

Hindu :51%, Christians:28%,

Muslims :18%, Chinese :3% Muslims presence in all walks of life: Islamic

schools, professionals, orphanage, business,etc.

Muslims have contributed enormously in thedvp. of the economy

Business operated as family business But as a community, little has been done to

establish the financial system of Islam.


16/28

Keen desire by Muslims to re-establishtheir identity.

Establishing an Islamic bank in Mauritius

in 1990s was a manifestation of thisdesire.

To become part of the Islamic banking

phenomena.Preliminary work carried out.Formation of a Credit Union in the

Cooperative sector (AL BARAKAH)!


17/28

Why Al Barakah?1. To provide an alternative to the

interest-based financial institutions forthe community. (Community-based)

2. To provide halal investmentopportunities and returns.

3. To contribute in a halal way to theoverall development of the economy.

4. Formation of Al Barakah(Registered on 10th June 1998)

Islamic Finance throughCooperatives


18/28

Operates:Within the Co-operative Societies Act2005

Within the framework of its rules and

regulationsIn accordance with Islamic FinancialLaws.


19/28

Advisors Dr. Monzer Kahf (USA)

Dr. Ashyraf Dusuki(Malaysia)

Br. Imtiaz Ali (T&T)


20/28

To operate as a financial institution based onIslamic cooperative principles and providing

a wide range of services on an interest-freebasis

To be a leading Cooperative Society in the field of

Islamic Finance for a fair and just society.

VISION

MISSION

GOALS To present a practical model of Islamic

Finance through the co-operative sector. To lay the foundation for an alternative

financial system to the Mauritianpopulation at large.


21/28

1. To create a source of credit for itsmembers for provident andproductive purposes.

2. To provide savings facilities tomembers

3. To create the framework to enablemembers to manage their financialresources for their mutual benefit.

4. To promote the welfare andeconomic interest of its members.

Objectives


22/28

Tailor-made schemes based onMurabahah:

1. Household General Financing2. Computer Financing

3. Traders Financing

4. Home Financing

5. Air Ticket Financing

6. Motor Vehicle/Cycle Financing

7. Land & Property Financing

Istisnaa Financing (Manufacture-Sale) Partnership with shareholders (M&M) Interest-Free Loan (Qard-al-Hasan) Hajj Savings Account


23/28

Statutory Reserve

Profit Equalisation ReserveDividend Equalisation Fund

Social Takaful Fund

Creating awareness about Islamic Finance.

Organizing lectures, seminars,

conferences and workshop.Organizing mini trade fair, socio-culturalprogramme.


24/28

1. Individual/organisational/governmentlevel

2. Legal framework

3. Public acceptance

4. Economic potential5. Human Resource

6. Mass Education

7. Competition


25/28

Mauritius wants to connect to this sophisticatedand growing global phenomenon that spansbanking, non-banking financial services, micro-finance, insurance and capital markets.

We will also set the regulatory framework forleasing companies to market products which areshariah compliant.(60)

And to level the playing field appropriateamendments will be made to the legislation to

make normal banking and Islamic banking taxneutral.(62)

Budget speech 2008/2009 - Minister of Finance


26/28

Legal & Regulatory Framework

* The Banking Act 2004-Amendments 2007* The FSDA 2001-(Non-banking activities)

* The Cooperative Societies Act 2005

Membership for corporate bodiesProjects/Joint ventures etc.


27/28

1. 10 years of operation

2. An eye-opener

3. Islamic finance at different levels

4. Well-being of all citizens


28/28

Mamode Raffick Nabee MohomedFounder/Secretary Al Barakah M.C.S.LE-mail: [email protected]

www.albarakahcoop.org

Tel: (230) 6275766, 7781738
mailto:[email protected]:[email protected]

4th international conference & exhibition on islmaic banking & takaful

Documents