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Cover. Africa Hotspots Stakeholder Panel Presented By Kazim O. Yusuf Chief Executive Officer Kord Capital Limited. Is Africa Really The Next Big Thing In Islamic Finance? ______________________________________ The African market is rich in man power Improving stability in the region

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  1. Cover Africa Hotspots Stakeholder Panel Presented By Kazim O. Yusuf Chief Executive Officer Kord Capital Limited

  2. Is Africa Really The Next Big Thing In • Islamic Finance? • ______________________________________ • The African market is rich in man power • Improving stability in the region • Demand for specialized Islamic financial products • Large percentage of Sub Saharan Africans are Muslims • Willingness of African governments such as Nigeria, Kenya and Senegal to embrace Islamic finance Is Africa really the next big next big thing in Islamic finance?

  3. What Is The Potential For developing Islamic Finance In African Markets? _____________________________________ • Long term and partnership type of investments needed on the continent. • Willingness of African governments such as Nigeria, Kenya and Senegal to embrace Islamic finance • Opportunity to reduce huge volume of debts in Africa What’s the potential for developing Islamic finance in African markets?

  4. How will the Islamic finance and investment market develop in Egypt post regime change?___________________________________________________________________________ • Egypt's volatile economy will need long term real sector class of investments typical of Islamic finance • Majority Muslim population and likely hood of a positive sentimental bias How will the Islamic finance and investment market develop in Egypt post regime change?

  5. Proliferation of laws supporting the development of Islamic finance, adoption of transparency and Egypt’s vantage position in the MENA region • Islamic finance will assist in developing its recently volatile stock market through various offerings such as Sukuk and portfolio Islamic investments. Proliferation of laws, adoption of tranparency

  6. The cart before the horse: does the conventional banking industry need to achieve higher levels of penetration before an Islamic finance market will start to develop? • _______________________________________ • Islamic finance is an alternative, not a comparative option to conventional finance. The cart before the horse: Does the conventional banking industry need to achieve higher levels of penetration before Islamic finance market will start to develop?

  7. Simple contracts such as Murabaha, Salam and Ijarah are well suited to existing rural structures. • Islamic finance does not need conventional banking to develop. Salam is a classic example of Agricultural financial instrument • African markets are in need of long term equity or partnership capital ideal to Islamic finance Salam is an Islamic Agricultural financial instrument independent of conventional banking

  8. Can Islamic banking principles be a catalyst to bring unbanked masses into the banking population? • __________________________________________________ • Distinction between the unbanked and the inadequately banked? • Inadequately banked due to : • Sophistication of conventional banking system • Religious and ethical sentiments Can Islamic banking principles be a catalyst to bring unbanked masses into the banking population?

  9. Rural in-accessibility • Illiteracy • Huge wealth gap between rich and poor • Islamic banking is positioned to bridge the gap not only between the banked and unbanked but also between the banked and inadequately banked. • A recent UN report rates banking penetration in Africa low with over 65% of the population unbanked UN report – 65% of Africans are unbanked

  10. Using Nigeria as a case study, it has the largest population of Muslims in Sub Saharan Africa with over 78million Muslims, making up 5% of the world Muslim population –Pew Report, 2009 • Nigeria has a high unbanked population which can be bridged by Islamic finance, more so Islamic micro-financing for rural areas. Pew Report – 5% of world Muslim population are Nigerians

  11. Percentage (%) of African Muslim Population

  12. A survey conducted by EFinA revealed the following Statistics on Nigeria • 74 percent of adults (64 million) have never been banked • 21 percent of adults (18million) have bank accounts • Men have better access to finance; only 15 percent of women currently have bank accounts • 71 percent (9.6 million) of salaried workers vs. 15 percent (4.3 million) of farm employees are banked • 86 percent of rural adults are currently unbanked EfinA survey – 64 million Nigerians are unbanked

  13. What developments are needed in corporate finance and transparency before Islamic finance will progress? • What developments are needed in corporate governance and transparency before Islamic finance will progress? • __________________________________________________________ • Training of regulators and Islamic finance professionals • Robust Shari’ah Advisory Board • Enforcement and compliance with professional code of ethics

  14. Will Islamic capital markets see African governments issuing Sukuk over the coming five years? • _______________________________________ • Yes. Sukuk are suited for Public Private Partnerships which are ‘economically en-vogue’ in most emerging economies e. g Nigerian MMA2 Domestic Airport, Housing Scheme in Lagos State, BRT Metro- Transport in Lagos State . Will Islamic capital markets see African governments issuing Sukuk over the coming five years?

  15. Political stability, transparency and viable Islamic finance frameworks are conditions precedent to successful African government issuance of Sukuks • Sukuks are re-assuring to investors as they are project specific • Disclosure and transparency nature of Sukuk mitigates risks dealing with governments with poor track records Sukuks are re-assuring to investors

  16. Will investor interest be sufficient to make these issues successful? • _______________________________________ • Yes, increasing growth opportunities in Africa’s commodity and resource rich emerging market is sufficient to sustain interest of investors • Sukuk have competitively better risk assessment profile   Will Investor interest be sufficient to make these issues successful?

  17. Kenya is currently working to issue a full sukuk to attract foreign investors and passing legislation to boost it by eliminating tax barriers – Reuters website Feb 2011 • CBN governor confirmed that Nigeria will issue its first sovereign sukuk within 18-months to boost Islamic finance in the economy and Africa – Reuters website June 2011 (at a conference in Senegal) African governments working towards issuing Sukuk

  18. Who We Are? ________________________________________________________ • Kord Capital Limited is an emerging market driven, Shari’ah compliant investment company focused on providing private equity investments and venture capital services consistent with the ethical investment principles of investors. • We are project based Private Equity firm. Who we are?

  19. Contact Us ___________________________________________________________ Telephone: +234 1 8418148, +234 8191207772 Fax: +234 1 2707024 Website: www.kordcapital.com Kazim Yusuf - kazim.yusuf@kordcapital.com Dare Ogunbona - dare.ogunbona@kordcapital.com Contact Us

  20. Thank You Thank you

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