hybrid financing for sme’s: expanding the sukuk...
TRANSCRIPT
18 november 2014
HYBRID FINANCING FOR SME’s: Expanding the Sukuk Market
Anass PATEL
Founder & President (Phd Candidate Paris Sorbonne)
TIEF SEMINAR – TURIN
570 Asset Management : Who we are and what we do ?
2 www.570easi.com
Online platform dedicated to islamic finance, to educate, structure, service and distribute innovative EASI products
Simplifying and innovating thanks to ethical principles. Team of PhD students, community mgrs, affinity markt
Serving the French Market (Muslim population x3UK, x2GER)
3
Younger population looking not for traditional banking but values and innovation : user experience & simplicity
Pre-qualified projects
Home Finance Platform (origination & servicing)
Focus on education, user experience, walk the talk HOW IT WORKS
Crowdfunding platform (donation, reward and interest-free loans)
Example of successful student loans projects
Example of successful community works projects
Power of the network : global reach from a small startup platform
Sukuk « prototypes » : for SMEs and entrepreneurs
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COOP CO (300 K€ in progress)
Asset-backed Asset-generated
FOOD CO (500 k€ private placement)
CASH
FLO
W
SHAR
ING
PART
ICU
LIER
S S
OC
IAL
IMPA
CT
TEL CO (5 M€ in progress)
DESIGN CO (50 k€ Crowdfunding)
No place for SMEs in the Sukuk Market?
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Private placement for a Sukuk program of €5M with a first tranche €0.5M€ issued in 2012
Structure Mudaraba 5 years
Issuer Al Farooj France
Structuring 570 Asset Management
Sharia Board Shaykh Muhamad PATEL (ACERFI)
Lost in translation – Where are my assets ?
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Asset Generation as an Alternative to Asset Securitization
Different taste AAOIFI guidelines
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Barbarians are disrupting Finance : different value proposition
SMEs financing
Equity-based contracts
Solidarity-based contracts
Debt collateral-based contracts
• PSR = 100:0 • Risk, Value (++,++/--) • Capital (private)
• PSR = 100:0 • Risk, Value (+,+) • Capital (loan)
• PSR = 0:0 • Risk, Value (++,0) • Capital (mutual)
• PSR = 𝛼:1 - 𝛼 • Risk, Value (+,+/-) • Asset (timing, ownership)
A new model of hybrid financing and asset value-sharing
Research paper in Harvard Islamic Finance Program (2014) PSR: Profit Sharing Ratio
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Asset ownership-generated contracts
Formula to disrupt the global Sukuk market: Tech + SMEs + Halal
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Technology SMEs diversity
Source: telesperience
Source: SAP
Halal market mix
Source: The Economist – top 3 market
Crowdsourced/funded Sukuk: best of breed shari’a strategy ?
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Sukuk is the plural of [sak] which means certificates i.e. popular way of trusting and exchanging notes, representing the value of an asset” => ground steps for collective traded instruments or mutual funds.
Crowdfunding refers to the collective cooperation, attention and trust by people who network and pool their money together, to support efforts initiated by others.
Shari’a Trusted Business = +
Road Map
Contracts
Projects
Focus
EDUCATION
NGO, schools
Donation Reward
Student loans
No interest
CREATION
SMEs
Sukuk
Entrepreneurs
Equity
Today Tomorrow
Leveraging the social space for islamic finance value proposition
