UKIFC Board Members speak at the International Takaful Summit in London
Our Advisory Board Members, Ajmal Bhatty and Omar Shaikh were invited to speak at the International Takaful Summit in London on 11th-12th July 2017.
Ajmal Bhatty is a thought-leader in takaful and has been a practitioner and promoter for over 30 years. Ajmal is a Director at Tokio Marine Middle East, and is setting up a foundation to serve the takaful industry in steering it towards growth and stability and in developing ethical and sustainable micro-financial solutions for the markets of Africa and South Asia. Ajmal shared key insights into his work.
Omar spoke on Shari'ah Governance and Audit. Omar shared key findings from our External Shari'ah Audit Report (download a copy here) and fascinating insights from countries that had implemented Shari'ah Audits through their Central Banks. Omar said that the evolution of Shari'ah Governance was imperative as the [Islamic finance] industry evolved and used Morocco as a case study to demonstrate how emerging markets are supervising Shari'ah matters.
The 11th International Takaful Summit was a platform to discuss how the global Islamic insurance sector can capitalise on the experience of London’s insurance market in order to drive growth.
The flagship two-day programme addressed the challenges specific to takaful companies such as low penetration rates, distribution channels, suitable investment vehicles and the lack of qualified practitioners and operational issues that are affecting global business such as cyber security, digital disruption, data analytics and the use of robotics. The programme also covered challenges and opportunities specific to Africa, Asia and GCC takaful markets with a suggested road map for the way forward.
"Faith in finance" is the theme for the lastest Edinburgh Ethical Finance Round Table
The 13th Edinburgh Ethical Finance Round Table took place in the offices of Maclay Murray & Spens LLP at Quartermile on 15th June 2017. The topic for the meeting was faith-based finance and the faith perspective on ethical investment.
The first presentation was given by Catherine Alexander, chair of the trustees of the Church of Scotland Investors Trust. The Trust was established by the Church in the 1980’s to provide it and its congregations with cost effective investment management of their funds. The total funds under management currently amount to around £400m and day to day management is delegated to three investment management firms. Catherine indicated that the Trust has always operated on the basis of avoiding certain categories of investment, their current policy being to exclude any company with a higher than 15% involvement in armaments, alcohol, gambling, tobacco or tar sands. Certain of these exclusions were not without their questions – for example the Church of Scotland itself is willing to accept heritage lottery funding for projects. Increasingly the Trust is seeking ways of encouraging ethical behaviour by those they invest in and consider that they have an important role as lobbyists in this direction within the corporate sector.
Saquib Ismail, Senior Sales Manager with Al Rayan Bank gave the second presentation. He opened by giving a brief history of the Bank, which was founded in 2004 (as Islamic Bank of Britain) and opened its first branch in Scotland last year (see Scotsman article). It currently has around 50,000 customers and has grown rapidly in recent years. In keeping with Sharia requirements all of its products are asset-based and all returns provided to depositors constitute profit and not interest, although for the most part this distinction is invisible to the Bank’s customers. Interestingly, the list of assets and activities which the Bank excluded is very similar to that mentioned by Catherine, although in the Bank’s case the exclusions are absolute rather than matters of choice and policy. A recent notable development is that around 80% of the Bank’s deposit customers are now non-Muslims, although Muslims naturally remain a substantial majority of those taking “Islamic mortgages”.
The presenters then took a number of questions from the floor, one point which emerged being that any set of ethical investments principles needs to be kept under regular review, to take account of changing perceptions and understanding. There was general agreement that most recent research had tended to indicate that returns from ethical investments generally fully matched those of conventional investment strategies. David Cousland, of Fair Finance Agency, cited the work of Oikocredit in the developing world, including one notable project which had been running across the Muslim and Christian communities in Egypt for around 40 years.
The final part of the meeting saw a report on a “global first” for Scotland, namely the ongoing project between the Church of Scotland and the Islamic Finance Council UK to attempt to produce a financial product which would help to tackle financial exclusion, based on the shared values of the two faith communities (see BBC article). Doctor Richard Frazer and Martin Johnstone, Convener and Secretary of the Church and Society Council, spoke for the Church of Scotland and Omar Shaikh for the UKIFC. The aim will be to produce in the fairly near future a document setting out the conclusions reached on the applicable shared values, as emerging from the series of inter-faith workshops which had taken place, and there would then be a phase of “R & D” seeking to build out the detail of a financial product. It was emphasised that the ultimate product would be open to the whole of society, not only those of the faiths involved. The relevance of Scotland’s long history of ethical finance was noted and Doctor Frazer also made the point that part of the process would involve taking views from the “grass roots” communities which the product would be intended to assist. In response to a question from the floor Mr Shaikh confirmed that it was the intention of involving other faith groups also in the process as matters moved forward.
Financial Inclusion Expert Joins UKIFC Team
The UKIFC is delighted to announce the appointment of Ms Modupe Ladipo as a Senior Advisor. Ms Ladipo specializes in financial inclusion and has over 25 years’ experience in financial services working across complex environments in Africa, Asia-Pacific, Europe and the US.
Based in Nigeria, Ms Ladipo will strengthen the UKIFC's Government Advisory capability, particularly in Africa where financial inclusion is a key policy driver.
A pioneer of non-interest (Islamic) finance in Nigeria Ms Ladipo is the former CEO and current Chair of Enhancing Financial Innovation & Access (EFInA); a leading NGO backed by UK Government's DFID and the Bill & Melinda Gates Foundation.
UKIFC Advisory Board Member Mr Omar Shaikh said: "We worked closely with Modupe and her team during our time in Nigeria and were impressed by her passion, professionalism and the technical expertise she demonstrated in making the Nigerian financial system work better, especially for the poor. As a recognised leader in financial inclusion across Africa and with strong knowledge of both conventional and Islamic finance, we look forward to working with Modupe to expand our work in emerging markets and using non-interest/Islamic finance to address financial inclusion."
Commenting on her appointment Ms Ladipo said: "I joined the UKIFC as a Senior Advisor to provide thought leadership on how Islamic and Ethical Finance can contribute to the global financial inclusion agenda. I look forward to provide technical support for the development of innovative Islamic and Ethical Finance products aimed at low income earners across multiple jurisdictions."
To find out more about the UKIFC's work in Government Advisory and Ethical Finance please click here.
Graham Burnside attends Responsible Finance and Investment Summit in Zurich
Our Advisory Board Member, Graham Burnside was invited to speak at the RFI Summit in Zurich on 3rd & 4th May 2017, on financial inclusion and accessibility, and efficiency through FinTech. During the session, Graham also discussed whether by opening finance to Muslims, impact investing can have a broader social impact.
Graham is an expert in banking and finance law, specialising in particular in structured finance and capital markets. He is considered the Scotland's leading expert, having structured and documented the first (and so far only) Islamic mortgage products operating under Scots law and the first fully Sharia-compliant commercial real estate financing in Scotland.
The Responsible Finance & Investment Summit (RFI Summit) is an initiative of the RFI Foundation and Swiss Arab Network to build awareness of shared values that can bring socially responsible investing (SRI), environmental, social and governance (ESG) and Islamic finance together to increase their positive impact.
During the Responsible Finance & Investment Summit key stakeholders within responsible finance were brought together to build connections for new growth opportunities and more measurable impact. The RFI Summit played a vital role in connecting representatives from across the responsible finance industry to build on the growing cooperation between SRI, ESG and Islamic finance.
Scotland leading the ethical finance debate
With a proud and respected heritage in the financial sector, such as the pioneering development of savings banks and mutual life companies, and a growing reputation for driving forward today’s ethical finance debate, Scotland is on the cusp of becoming a key player in the global market.
Scotland’s contribution to the ethical finance movement has been recognised internationally and, according to experts in the sector such as the Islamic Finance Council UK (IFC), the country has a unique opportunity to become a leader in this rapidly developing field.
This is the backdrop to the Ethical Finance Round Table (EFRT) taking place in Edinburgh today in which Bola Gibson, of TSB Banking Group, will discuss the Group’s approach to building a trusted mainstream bank, as well as a discussion on the prospects for developing a “kite-mark” for ethical financial products led by Julian Parrott of Ethical Futures.
The IFC launched the EFRT series in 2010 as Scotland’s only systematic platform bringing together the various strands in the broad ethical finance arena. It has attracted speakers from across the world and has now become one of the UK’s leading ethical finance discussion platforms.
Martina Macpherson, Managing Partner of London based SI Partners – oekom research UK, who presented at the last EFRT in October said: “Since the 1980s, ethical and sustainable investment has grown into a complex industry. Green and ethical retail funds in the UK now have more than £13.5 billion invested, up from £6.5 billion just a decade ago. In addition, a range of studies have shown that ethical investment funds can beat their benchmarks and even outperform many of their non–ethical counterparts.”
Around 35 bodies will be represented at this today’s event including Church of Scotland, Heriot Watt University, mlm Solutions, Scottish Government, ScotWest Credit Union, Social Investment Scotland, Standard Life Investments and The Charity Bank.
Speaking ahead of the meeting, IFC Advisory Board member Omar Shaikh commented on the progress the EFRT has made. He said:
“The roundtables have become a great success. The depth and variety of the insights has been truly impressive and the willingness to learn from each other’s experience has highlighted real synergies. The ongoing banking failures have made many in society keen to see a more responsible form of finance. The roundtable debates are playing a key role towards defining terms such as ethical and responsible.”
A direct output of the EFRT series has been the establishment of a Government-backed steering group tasked with assessing the feasibility of establishing a Scottish Ethical Finance Hub (SEFH), a concept which emerged at previous meetings and gained strong support from participants. The SEFH’s role would be to facilitate commercial investment, R&D and thought leadership as required for developing and testing ethics-based models of banking and finance, and enhance international engagement.
Ms Macpherson commented: “an ethical finance hub that leads the way in knowledge exchange, innovation and best practice will build bridges between industry, academia, religious groups and politics. It will confirm Scotland’s role in ethical and sustainable investment decision-making, within the UK, Europe and beyond, for years to come.”
Complementing the EFRT, this year will see Dubai based Middle East Global Advisors (MEGA) host the inaugural Global Ethical Finance Forum (GEFF) in Edinburgh in early September, bringing together key stakeholders from the Gulf, Asia and Europe to explore the global convergence of standards in the ethical sector.
The decision to select Scotland as the host country for the first GEFF was driven in large part by Scotland’s very strong heritage in ethical finance. Ehsan Abbas, Chairman of MEGA, lauded Scotland’s “immeasurable contribution to the creation of financial institutions and early professional bodies specializing in ethical finance.”
Graham Burnside, IFC Advisory Board Member, strongly believes that ethics and business can go hand-in-hand: “The demand for increased social responsibility and ethical behaviour is quickly becoming a major transformative force within the global financial services industry. We are particularly excited about the progress the EFRT series has made and see the SEFH as a genuine opportunity for Scotland to demonstrate true innovation on a global scale. Securing the GEFF event is a major coup for Scotland and we look forward to welcoming high profile speakers and attendees from across the world.”
ENDS
NOTES TO EDITORS:
The Islamic Finance Council UK (IFC) is a specialist advisory and development body established to promote and enhance the global Islamic and ethical finance industry. The IFC focuses on government policy advisory, ethical finance, shariah governance and executive training. To find out more visit us at alasdairc15.sg-host.com
To find out more about GEFF2015 visit http://ukifc.com/growing-the-global-ethical-finance-industry-through-collaboration-and-convergence/
For more information or to arrange interview then please contact Chris Tait, IFC, on 07931 103573, or 0207 193 6329 or chris@ukifc.com