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Islamic Finance
Sept news wrap: Russia initiates Islamic banking, UAE's ADIB rolls out EV finance program; and others

Here's a roundup of key developments across the Islamic finance ecosystem during the first two weeks of September

Editor's note: There is a visible demand for Islamic finance and banking. Keep to 'cash in' on the riding wave, non-Muslim majority countries across the world are gladly obliging. Russia has intitiated Islamic banking, while the Bank of Uganda has issued its first Islamic banking licence. Philippines is also taking active strides to promote Islamic banking and financing activities, signalling a strong global run for the sector. 





Islamic Coin announces landmark MoU with CoinDesk Indices
At TOKEN2049 in Singapore, Islamic Coin announced an MoU with CoinDesk Indices (CDI) to explore a strategic partnership focused on developing innovative index strategies.


The partnership aims to tap into growing interest in crypto and inclusive finance. Key highlights include licensing CDI indices for various financial products, creating new Shariah-compliant indices, and providing API access to selected digital assets for HAQQ's internal use. (Zawya)





Alkhair Capital launches $100m Islamic healthcare fund in Dubai
Alkhair Capital Dubai, a provider of Shariah-compliant investment solutions, has introduced the Alkhair Capital Healthcare Sector Fund.


The open-ended liquidity fund will focus on healthcare enterprises leveraging cutting-edge artificial intelligence (AI) technology to enhance healthcare services.


Alkhair Capital has partnered with Klaim Technologies, a fintech firm specializing in AI-powered insurance claims assessment, to employ proactive investment management strategies for the fund. (Khaleej Times)






Bank of Uganda issues first Islamic banking licence
The Bank of Uganda has issued its inaugural Islamic banking license to Salaam Bank Uganda, a subsidiary of a Djibouti-based bank.


The license was presented at the central bank's offices by Deputy Governor Michael Atingi-Ego. This development comes after the Ugandan parliament passed legislation in June to authorize Islamic banking, with President Yoweri Museveni signing it into law in August. (Central Banking)



Russia introduces Islamic banking
In an effort to explore the viability of the Islamic finance model, President Vladimir Putin has signed a law introducing Islamic banking in four Muslim-majority republics in Russia.


The four regions, which include Chechnya, Dagestan, Tatarstan, and Bashkortostan, launched the Islamic banking system on September 1 as part of a two-year pilot program. (Al Arabiya News)



SECP issues Shariah compliance certificate to fintech fifirm
The Securities and Exchange Commission of Pakistan (SECP) has issued a Shariah compliance certificate to Qist Bazaar (Private) Limited, a licensed non-banking finance company (NBFC), offering buy-now-pay-later (BNPL) services.


The certificate, granted under Shariah Governance Regulations, is based on the principle of Musawamah, incorporating a profit margin in the commodity's sale price. (Business Recorder)




Philippines / Saudi Arabia

Philippine Central Bank promotes Islamic finance, invites Saudi investors
The Bangko Sentral ng Pilipinas (BSP), the Philippines' central bank, has been actively promoting Islamic banking and finance initiatives in the country.


Recently, the monetary board granted its first Islamic banking unit license to a traditional bank, opening opportunities for foreign and private banks to enter the market. This was previously limited to the state-owned Al-Amanah Islamic Investment Bank of the Philippines. (Arab News)



ITFC considers Islamic finance deals uptick in Azerbaijan
The International Islamic Trade Finance Corporation (ITFC) is considering opportunities to expand Islamic finance deals in Azerbaijan.


ITFC's CEO, Hani Salem Sonbol, expressed optimism about introducing Islamic financial tools in collaboration with Rabita Bank and encouraged the transformation of existing banks or the creation of specialized units for Islamic banking in the region. (Trend News Agency)





Abu Dhabi Islamic Bank launches electric vehicle finance program
Abu Dhabi Islamic Bank (ADIB) has introduced its electric vehicle finance program. 


The initiative aligns with ADIB's sustainability commitment and the UAE's net-zero economy objectives. The program offers competitive financing with a rate of 1.79%, one of the industry's lowest for new electric vehicles. (Zawya)

Islamic Finance
Uganda issues first Islamic banking licence

In a significant development for Uganda's financial sector, the country's central bank has issued its first Islamic banking licence.

The move comes after Uganda passed legislation in June to accommodate Shariah-compliant finance activities, marking a notable step towards the diversification of the nation's financial services.

The newly issued licence has been granted to Salaam Bank Ltd., a subsidiary of Djibouti-based Salaam African Bank, the Bank of Uganda said in a statement.

“We believe that Islamic banking has the potential to make a significant contribution to the development of Uganda’s financial sector,” the central bank’s deputy governor Michael Atingi-Ego said.

The Ugandan parliament's decision to authorize Islamic banking earlier this year laid the groundwork for this transformative development. By embracing Islamic finance principles, Uganda aims to tap into a previously underserved market segment while diversifying its financial services industry.

Islamic Finance
Aug news wrap: IsDB to develop Mauritania's Islamic banking; Nigeria's Enricher eyes expansion; and others

Here's a roundup of key developments across the Islamic finance ecosystem during the month of August

Editor's note: On balance, summer months are construed as a lull, a breakaway from the usual order of business. However, a decent line of events recorded across the world kept the Islamic finance ecosystem humming, with several entities engaging in key partnerships, and others eager to look beyond borders for greater traction.

Islamic fintech Yoosr is set to launch a Shariah compliant home financing facility across key regions, UAE-based Shuaa Capital unveiled its equity fund targeting Saudi and GCC equities, while a Nigerian Islamic fintech firm is eyeing lucrative markets for expansion.

Meanwhile, the Islamic Development Bank is backing the launch of Islamic finance in Mauritania, and partnering with Indonesia to advance the broader ecosystem. 


Company News

Yoosr’s Shariah-compliant home financing to help community members amid rising interest rates
Yoosr, an Islamic-value-based fintech, is set to launch Shariah-compliant home financing in the UK, Europe, the Middle East, and SouthEast Asia, as interest rates and property prices soar.

This venture, in partnership with various real estate developers, could potentially reshape mortgages for millions globally.

Furthermore, Yoosr plans to offer charity-based financing for lower-income individuals, blending advanced tech with religious principles, in a transparent manner. (Arabian Business)

Saudi Arabia
Shuaa Capital unveils Shariah-compliant equity fund
Shuaa Capital has unveiled its Shuaa Saudi Equity Fund, a Shariah-compliant asset targeting Saudi and GCC equities, under the Incorporated Cell Company umbrella in Abu Dhabi's ADGM.

Managed by its subsidiary, Shuaa GMC Limited, the fund offers regional and global investors, especially high-net worth individuals, an avenue to the burgeoning Saudi public market. The fund will focus on Saudi's Shariah-compliant equities, with a minor GCC allocation, spanning diverse industries and stock types. (Hubbis)

Nigerian Islamic fintech Enricher plans expansion to UK, North America
Nigerian fintech firm, Enricher, eyes expansion into the UK and North America to tap the increasing appetite for Shariah-compliant finance.

Its CEO Shakirat Animashaun believes global growth is paramount to realise the company's potential. (The Africa Report)

Funding Societies and CGC Digital empower enterprises with digital financing
Malaysia's SME digital finance platform, Societies, has partnered with CGC Digital, a subsidiary of Credit Guarantee Corp by virtue of a joint venture (JV). 

The JV is set to offer Shariah-compliant digital supply chain financing, primarily catering to Malaysia's underserved micro and small enterprises. Under an MoU, CGC Digital crafted a digital credit product, initially financing up to 4 million Malaysian ringgit for qualified entities. (The Malaysian Reserve)

Bank Nizwa promotes Islamic finance via knowledge sessions
Oman's Bank Nizwa hosted its Islamic finance knowledge series in the sultanate's capital of Salalah.

Sheikh Dr. Ali Al-Jahdhami, a member of the bank's Shari’ah board, enlightened the General Directorate of Endowment and Religious Affairs staff on Islamic finance basics and its influence on Oman's banking sector, emphasizing Shari’ah compliance and the significance of financial literacy. (Zawya)

Maybank partners with Broadridge to launch Sharia-compliant SBL offering
Maybank has leveraged Broadridge's securities finance and collateral management solution to introduce a new proprietary technology for its securities borrowing and lending business.

The Sharia-compliant platform, promising improved customer experience and cost management through automation, is anticipated to be popular among investors. (Fintech Global)

ShopBack, PayHalal partner to offer Shariah-compliant merchant acquiring services for buy-now-pay-later
ShopBack, a shopping and rewards platform, has partnered with PayHalal, a payment gateway, to provide Shariah-compliant buy-now-pay-later solutions.

Through a Wakalah service contract with PayHalal, merchants can offer deferred payments via ShopBack’s app. The collaboration allows brands to offer interest-free instalments to consumers, enhancing their purchasing flexibility. (Malay Mail)

ESG Developments

CIMB introduces first branch with integrated sustainable features at IOI City Mall
CIMB Bank Berhad and CIMB Islamic Bank Berhad have introduced its maiden branch boasting integrated sustainability features within the Green Building Index-certified IOI City Towers in Putrajaya.

This initiative reflects a merger of environmental and social elements into its design and operations. Pushing its ESG-first strategy, the branch promotes offerings like green home and electric vehicle financing, while also focusing on inclusivity with features like accessible ATMs for specially-abled people. (The Star)

Islamic Development Bank Institute delivers training in Uganda
The Islamic Development Bank Institute (IsDBI) recently held a three-day training session in Kampala, Uganda, focusing on zakat management.

From August 14-16, the program, part of a grant for capacity development in Islamic social finance for Uganda's House of Zakat and Waqf, drew participants nationwide. (African Business)

Trade Developments

IsDB to help develop Islamic banking in Mauritania
The Islamic Development Bank Institute (IsDBI) recently visited the Central Bank of Mauritania (CBM) to explore technical assistance for Mauritania's introduction of Islamic finance.

In response to CBM's appeal for support, the meeting delved into developing regulatory, supervisory, and governance protocols for Islamic banking.

The IsDBI's proposed plan includes an assessment of CBM's current framework, drafting Islamic bank regulations, revising payment systems, and offering training on new regulations and instruments(IsDB)

IsDB, Indonesia collaborate to advance Islamic finance 
H.E. Dr. Zamir Iqbal of the Islamic Development Bank (IsDB) met a delegation from Indonesia, led by H.E. Dr. Juda Agung of Bank Indonesia, to reinforce the Islamic finance sector.

Reflecting on a partnership that began in 1974, both parties discussed enhancing cooperation, with Indonesia's contributions being instrumental in elevating the IsDB Group's status. (IsDB)


ADI Capital arranges Islamic syndicated finance for Kharafi National
Abu Dhabi Islamic Capital (ADI Capital) has brokered a syndicated Islamic financing deal worth 1.65 billion Egyptian pounds for Kharafi National, serving as the sole financial advisor and fund promoter.

Intended to bolster the company's working capital, the funding aids the completion of projects across essential sectors in Egypt. (Daily News Egypt)

Islamic Development Bank entity arranges $40m for Prime Bank
The International Islamic Trade Finance Corporation (ITFC), under the aegis of the Islamic Development Bank Group, has granted a syndicated murabaha financing arrangement valued at $40 million to Prime Bank Ltd.

Intended to fortify the bank's burgeoning trade operations across the SME and corporate sectors, the accord was inked by representatives from both institutions in Dhaka. (The Daily Star)


SECP issues first-ever Shariah compliance certificates to REITs
In a notable move, Pakistan's Securities and Exchange Commission (SECP) has granted the country's first-ever certificates of Shariah Compliance to two real estate investment trusts: Signature Residency REIT and Rahat Residency REIT.

This follows the launch of the 2023 Guidelines for Offering Islamic Financial Services, aligning with a Federal Shariah Court directive promoting interest-free financial activities. (Samaa English)

Read more: News wrap for August: Saudi nods to South African meat imports; Brazil’s Paraná to expand halal exports; & others

Islamic Finance
Malaysia's MDEC to focus on three domains under Islamic digital economy ambit

Malaysia Digital Economy Corporation, a government agency tasked with leading the country's digital economy, will emphasize on three key domains within its Islamic Digital Economy (IDE) focus. 

The three domains include Islamic finance, halal and lifestyle. 

Syed Ibrahim Syed Noh, the agency's chairman said that it has been strategically designed to pave the way for a thriving ecosystem, Bernama reported.

The country's Islamic economy has been pivotal in its economy development, with MDEC identifying the Islamic digital economy as a promoted sector under its national Malaysia digital initiative.

Malaysia's Islamic finance assets stood at $3.6 trillion in 2021, and are forecast to reach to $4.9 trillion by 2025, a recent MDEC report revealed. Meanwhile, spending on halal food was recorded at $1.27 trillion in 2021, and is expected to grow to $1.67 trillion in 2025. Consumer spend on lifestyle sectors, such as travel, cosmetics and modest fashion, also totaled $467 billion, and is set to soar to $657 billion by 2025. 

MDEC is committed to nurturing IDE companies by offering a comprehensive ecosystem of mentorship, funding, business matching and market access, Noh added. 

"We are weaving a tapestry that fosters collaboration and effective partnerships between supply, demand, and enablers," he said, at the IDE Industry Conference 2023, earlier this week. 

"MDEC also serves as a bridge between traditional Islamic industries and the digital realm, by working close with halal certification bodies, Islamic financial institutions, and other stakeholders to integrate technology into their processes, thereby enhancing efficiency, transparency and compliance," Noh added. 

Islamic Finance
Adoption of IFRS 17 to test Takaful players in GCC - report

Takaful insurers operating across the Gulf Cooperation Council (GCC) are primed to continue a favorable growth path in 2023, underpinned by higher insurance prices and demand, a new report by S&P Global Ratings, has suggested.

However, the adoption of the International Financial Reporting Standard 17 (IFRS 17) does require Takaful insurers to update their internal processes and IT systems, which could translate into extra costs, time constraints, and operational challenges. This may potentially stress smaller, under-resourced players, the 'IFRS 17 Adoption Will Test GCC Islamic Insurers' report, has revealed.

Islamic insurers in Saudi Arabia, the largest Arab economy, and those operating out of other GCC countries adopted the aforementioned reporting standard from January 1, this year. Remaining insurers are likely to follow suit on the same date next year.

“Although we anticipate the adoption [of IFRS 17] will improve detailed published financials as companies enhance their data and processes, many insurers that have already implemented the new standard have experienced reporting delays and other setbacks," the S&P report read.

"In Saudi Arabia and the UAE, regulators extended reporting timelines in the first quarter to provide insurers, auditors, and other industry participants more time to complete the first financial returns under the new standard. Across the GCC region, we still see substantial differences in insurers' level of preparedness for IFRS 17. Many smaller and midsize Islamic insurers yet to implement will likely encounter difficulties given the lack of resources. This is because IFRS 17 requires internal process and IT system updates, resulting in additional costs and time constraints,” the S&P report read.

The GCC’s Takaful sector has ventured on a stable growth trajectory over the past five years, not least in 2022, when the overall gross written premium/contribution (GWP/C) among listed companies rose by about 23%.

The same year, Saudi Arabia recorded premium growth of almost 27%, despite a nearly 5% dip in GWP/C across other GCC countries over the same period. Some smaller Takaful markets, such as Qatar, stood to gain more as opposed to other Islamic markets in the region.



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