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Islamic Finance through Cooperatives in Mauritius

Islamic Finance through Cooperatives in Mauritius. Mr. Raffick Nabee Mohomed Founder & Secretary Al Barakah Multi-purpose Cooperative Society Limited 2 nd International & Exhibition on Islamic Banking & Finance 25 th August, 2008 at Lahore, Pakistan . About The Speaker.

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Islamic Finance through Cooperatives in Mauritius

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  1. Islamic Finance through Cooperatives in Mauritius Mr. Raffick Nabee Mohomed Founder & Secretary Al Barakah Multi-purpose Cooperative Society Limited 2nd International & Exhibition on Islamic Banking & Finance 25th August, 2008 at Lahore, Pakistan

  2. About The Speaker Mr. Mamode Raffick NABEE MOHOMED Founder and Secretary of Al Barakah Multi-purpose Cooperative Society Limited, Mauritius. Mr. Nabee Mohomed holds a Bachelor of Commerce, a Post Graduate Certificate in Education and a Post Graduate Diploma in Islamic Banking & Insurance (IIBI-London). He is a student at IIIBF for the PG Dip. in Islamic Finance. He is an Educator, also lectures on Islamic Banking & Finance and is an Associate Fellow of the Institute of Islamic Banking and Insurance which is based in London. Mr. Nabee Mohomed has also done a thesis on An empirical study of the Muslim Family in a rural set up. He has presented the case study of Al Barakah Coop at conferences and seminars in Trinidad &Tobago & India. He has also attended several short courses and training.

  3. SHORT COURSES & TRAINING • 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 Credit Unions, (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 July 2008) • International Islamic University, Islamabad (Pakistan) - Attended the 22nd International Programme for Human Resource Development from 14/11/2005 to 14/12/05 at Dawah Academy, Islamabad.

  4. Our Organisation PIONEER IN ISLAMIC FINANCE IN MAURITIUS

  5. AGENDA • 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

  6. Geographical Background & Muslims in Mauritius • Mauritius-gateway to the 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 the dvp. of the economy • Business operated as family business • But as a community, little has been done to establish the financial system of Islam.

  7. Islamic Banking & Finance & Muslims in Mauritius • Keen desire by Muslims to re-establish their identity • Establishing an Islamic bank in Mauritius in 1990’s was a manifestation of this desire. • To become part of the Islamic banking phenomena. • Preliminary work carried out . • Formation of a Credit Union in the Cooperative sector (AL BARAKAH)!

  8. Islamic Finance through Cooperatives • Integrating Islamic Finance in the cooperative sector: (1) Islamic Finance–based on Islamic ethics: justice, fairness, sharing, benevolence, cooperation. (2) What is a Co-operative ? - A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. (ICA) - Based on values: honesty, openness, equity, equality, democracy, solidarity, self-help, etc. - 7 principles of cooperatives: V.o.M, Democratic, M.Eco. Participation, Autonomy & independence, Education, training &information, Cooperation among cooperatives, Concern for community. (3) Credit Unions are financial cooperatives which are in effect community banks.

  9. Islamic Finance through Cooperatives • Why cooperatives? • Legal framework (Cooperative Societies Act 2005) • Values • Easy formation • Small capital • Cooperative sector is more people-oriented • “Cooperate with all in what is good and pious and do not cooperate in what is sinful and wicked….” (Q-5:2) • Islamic Finance within the cooperative sector around the globe.( T&T, Canada, Malaysia, Thailand, Australia, India, Singapore,…) • Mauritius?

  10. Islamic Finance through Cooperatives • Why Al Barakah? • To provide an alternative to the interest-based financial institutions for the community. (Community-based) • To provide halal investment opportunities and returns. • To contribute in a halal way to the overall development of the economy. • Formation of Al Barakah (Registered on 10th June 1998)

  11. LEGAL FRAMEWORK Operates: Within the Co-operative Societies Act 2005 Within the framework of its rules and regulations In accordance with Islamic Financial Laws.

  12. Organisation Structure • Individuals become shareholders • Shareholders elect B.o.D,Internal Controller at AGM • B.O.D nominates various Committees • Advisors – Dr. Monzer Kahf (USA) Br. Imtiaz Ali (T&T)

  13. To be a leading Cooperative Society in the field of Islamic Finance for a fair and just society. To operate as a financial institution based on Islamic cooperative principles and providing a wide range of services on an interest-free basis MISSION

  14. Goals • To present a practical model of Islamic Finance through the cooperative sector • To lay the foundation for an alternative financial system to the Mauritian population at large. Objectives • To create a source of credit for its members for provident and productive purposes. • To provide savings facilities to members • To create the framework to enable members to manage their financial resources for their mutual benefit • To promote the welfare and economic interest of its members.

  15. PRODUCTS & SERVICES BASED ON ISLAMIC FINANCIAL TECHNIQUES • Schemes based on Murabahah: 1. Household General Financing 2. Computer Financing 3. Traders/Entrepreneurs Financing 4. Home Financing 5. Air Ticket Financing 6. Motor Vehicle Financing • Istisnaa Financing (Manufacture-Sale) • Partnership with shareholders (M&M) • Interest-Free Loan (Qard-al-Hasan)

  16. Computer FinancingHow it works? • To purchase new computers sets, Laptop, etc...

  17. Our Special Funds • Reserve Fund (Statutory) • Islamic Finance Research, Education & Training Fund (IFRET FUND) • Solidarity Fund • Dividend Equalisation Fund

  18. OTHER ACTIVITIES • Creating awareness about Islamic Finance. • Organizing lectures, seminars, conferences and workshop. • Organizing mini trade fair, socio-cultural programme.

  19. CHALLENGES • Individual/organisational/government level • Legal framework • Public acceptance • Economic potential • Human Resource • Mass Education • Competition

  20. Islamic Banking & Financial Services? • Mauritius wants to connect to this sophisticated and growing global phenomenon that spans banking, non-banking financial services,micro-finance,insurance and capital markets. • We will also set the regulatory framework for leasing companies to market products which are shari’ah compliant.(60) • And to level the playing field appropriate amendments will be made to the legislation to make normal banking and Islamic banking tax neutral.(62) Budget speech 2008/2009 - Minister of Finance

  21. Opportunities with Al Barakah for Islamic Banking & Finance in Mauritius Legal & Regulatory Framework * The Banking Act 2004- Amendments 2007 * The FSDA 2001-(Non-banking activities) * The Cooperative Societies Act 2005 Membership for corporate bodies Projects/Joint ventures etc.

  22. CONCLUSION • 10 years of operation • An eye-opener • Islamic finance at different levels • Well-being of all citizens

  23. Thank you M. Raffick Nabee Mohomed Secretary Al Barakah M.C.S E-mail: albarakahcoop@hotmail.com Tel: (230) 6275766, 7781738

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