Shariah Compliant Financing: EFCO
Redefining finance using Sharia compliance principles.
Shariah Compliant Financing: EFCO
Our goal has always been to certify products that are simple, helpful, and more importantly ethical.
That’s the inspiration behind our first engagement in New Zealand with EFCO Limited. It is the only finance company in the country providing non-interest-based solutions that are also affordable and accessible to individuals and businesses. The asset and debt-based financing products are guided by both ethical rules and principles of Sharia compliance. They have worked hard to capture the niche market of underbanked clients and is now emerging as a mainstream financier with ultra-ethical solutions. We’ve already started to review the credit facility documents, and getting a better understanding of the Consumer Finance Act 2003 of New Zealand while exploring options to construct a Commodity Murabaha process. Making Sharia controls consistent across the products will help the implementation of products more easier, and we hope, even simpler to use.
We hope EFCO’s customers will have the opportunity to experience the new wave of Sharia compliance that is redefining finance in many countries around the world. We couldn’t be more excited to embark on this journey in New Zealand and help supervise products that are not only Sharia compliant but also simple, helpful and ethical.
Thank you for continuing to share this journey with us as we continue to progress towards our goal!
New Zealand based financial services company EFCO Ltd, today announces receiving Sharia certification as a mark of compliance from Shariyah Review Bureau (SRB) – a Bahrain based Shariah advisory firm licensed by the Central Bank of Bahrain.
The engagement comes as EFCO integrate Shari’a compliance to its set of assets & debt-based products. The arrangement will allow EFCO to rely on SRB to oversee and supervise its asset financing and personal loans in a Sharia compliant manner. To date there is no enterprise in New Zealand that provides dedicated Sharia compliant finance offerings even though the Muslim population is estimated over 62,000.
In response to the announcement of assigning SRB as the Shari’a advisor, EFCO’s Managing Director, Mahmood Raza says “With an international clientele from multiple industries SRB is a global name for Sharia advisory. We wanted to work directly with a reputable firm who understands local challenges and is able to propose pragmatic Sharia compliant solutions for our customers.” EFCO has been gradually arising to the expectations of the local demand and has set forth ambitious milestones of offering diverse Islamic financial products that are also guided by ethical precepts. “This is the right time to invest our leadership in catering to our customers growing faith based needs,” Mr. Mahmood adds ”EFCO will continue to focus and build this area and deliver the best possible Sharia compliant offerings; one that resonates with the need of the local customer.”
Yasser S. Dahlawi, CEO of SRB comments, “This engagement marks our first Sharia advisory engagement in New Zealand. We look forward to helping them in developing more products to cater to the faith driven and ethical focused consumer demands”.
EFCO Ltd is a New Zealand based financial services company offering life changing loans to different niche markets including Muslims, migrants, students, start-up businesses and SMEs. Customers can take advantage of deferred payments, free of confusing and complicated payment plans, with the added assurance of Sharia compliance. This is not limited to ethnic, cultural or social groups, but is available to all people; a financing solution that is non-interest based. To learn more visit http://efco.co.nz/.
Asset Management: Shukr Investments
Promoting a financial system that is fair without the use of usury or interest. Generating double digit annualized returns based on ethical principles. Developing new cycles of charitable growth by giving 50% of performance fees to charity. This is just a few of the big ideas that UAE—based Shukr Investments is aiming to achieve.
Today, we’ve joined forces with Shukr to supervise their flagship strategy, the Shukr Global Equity Fund, which combines Sharia-based investing with ESG principles. Ranked by Bloomberg* in the top 1% of all offshore public equity funds, Shukr attributes its success to being grateful for God’s blessings—which is why the firm donates a significant portion of its fees to charitable causes.
Our objective is to ensure their investments and charitable activities comply with Sharia principles. This includes assembling the scholars for Shukr Investments’ Shariah board, ensuring their public equity investments comply with Sharia principles, overseeing their purification calculations, auditing their activities and approving the charities Shukr donates to.
When creative institutions join socially-conscious Islamic investors, new ideas will be brought to life, and big things will happen!
So, best of luck to Shukr for the years to come!
Shukr Investments—an ADGM based investment manager who has received an In Principle Approval from the Financial Services Regulatory Authority—today announced that it has signed with Shariyah Review Bureau to setup its Sharia Supervisory Board and supervise its global public equity fund activities.
Founded in 2013, Shukr Investments has a presence in Abu Dhabi and the United States. Shukr Investments’ mission is to achieve annualized returns of at least 10% for its clients while donating 50% of performance fees earned to charitable causes.
“We believe that wealth is not diminished by charity and that if one shows gratitude to God for a blessing, God will increase that blessing,” said Omar Bassal, Director of Shukr Investments. “That’s why at Shukr Investments, we believe our success lies in being grateful and giving back to society. While we are the only firm we know of that donates half of our performance fees to charity, we hope this principle becomes an industry standard.”
Based on data compiled from Bloomberg, the Shukr Global Equity Fund’s performance over the last 3-months, year-to-date, 1-year, 3-years and 5-years all rank in the top 1% of all offshore public equity funds as of September 30, 2020 (Bloomberg symbol: SHUKGEP KY).
Commenting on the signing of the agreement, Omar said “We are excited to be working with Shariyah Review Bureau (SRB) to supervise our ethical framework, ensuring our process, investments and charity distributions align with Sharia principles.”
For over fifteen years, Shariyah Review Bureau has been delivering its Sharia supervisory services to hundreds of financial institutions in the region. “Shukr Investments integration of Sharia-based investing with ESG principles appealed to us,” said Yasser S. Dahlawi, CEO of Shariyah Review Bureau. “We also appreciate Shukr’s support of the local community through charitable giving.”
“We are delighted to welcome Shukr Investments to our clientele base” added Yasser. “Their commitment to using our Sharia Board and Sharia audit solutions clearly demonstrates how institutionalized Sharia advisory services are moving into mainstream investments.”
Shukr Investments is incorporated in the Abu Dhabi Global Market (“ADGM”) and has received from the Financial Services Regulatory Authority (“FSRA”) an In Principle Approval (IPA) to become a regulated Islamic Financial Institution, which will operate under a Category 3C license, once all IPA conditions have been met.
With a 38 years track record in the Kingdom of Saudi Arabia and with branches in Riyadh, Jeddah and Dammam, Al Sagr’s ambitious goal continues to cater to customers in the Kingdom and beyond. As one of the leading insurance player in the industry, Al Sagr is committed to applying faith based values so as to cater to its customers’ needs.
Commenting on the development, Sarran AbuSaq, CEO at Al Sagr, said: “We are writing the next chapter of our insurance business. The intended transformation with Sharia compliance is to make Al Sagr an enterprise-wide agile company rather being a traditional risk taker. This includes creating new options to Islamic insurers, clients and businesses whilst being complementary to our existing customers.” Sarran added, “our mandate continues to be to provide attractive and diverse insurance opportunities for our clients which also meet the broader needs of Al Sagr’s long term growth and development.”
Commenting on the assignment of Shariyah Review Bureau, Sarran explained, “Assigning an experienced Sharia advisory firm like them is a significant commitment from our end. With their regional footprint and cooperative insurance track record in the Kingdom, we believe that our sophisticated and tailored insurance offerings and high customer service level approach will be immensely valuable to corporate clients, providing and giving them the backing and certainty of Sharia compliance that they need in today’s challenging market conditions.”
As part of its work, Shariyah Review Bureau (SRB) will set-up the Sharia Committee, review all insurance products and related documents and enable the transformation by studying key business functions including re-insurance, claims and investments in light of Sharia principles. It will now manage the ongoing Sharia compliance of Al Sagr through periodical Sharia audits and supervisory reviews. Yasser S. Dahlawi, Founder and CEO of SRB, said, “what makes SRB unique is our ability to facilitate Sharia supervisory actions like product assessment, screening, Sharia Board administration and independent Sharia audits on a single platform. This approach helps improve the Sharia compliance process and enables our clients to reduce cost, improve transparency in reviews and certification and enhance the experience for Shari audit and reporting.”
“Relieving Al Sagr’s workforce of Sharia supervisory related administrative tasks will help them grow, develop and compete more effectively in today’s economy” Yasser added.
First of its kind program will help Mudarabah Capital lead the role in local investment opportunities.
Kazakhstan based Mudarabah Capital today announced the engagement of Shariyah Review Bureau to certify and supervise its investment opportunities. This is the first such Sharia compliant offering by Mudarabah Capital and one of the first in the country.
“We are excited to offer our investment in a Sharia compliant manner and present access to what the government tenders framework provides. In particular, the Islamic offering enables us to translate our historic record of investment into an even more favorable opportunity given the investment will be transacted using the Islamic Mudaraba modality,” said General Director, Ruslan Burkanov, at Mudarabah Capital.
“We expect our Sharia compliant program to stimulate further direct investment into our offering by Islamic investors by presenting a pathway of access to a powerful opportunity which complies with Sharia principles for a more diverse array of investors, including small, large family-offices and businesses”,Ruslan added.
Investing and bidding transaction on behalf of nearly 6 mln. USD entities to date, Mudarabah Capital’s latest initiative will provide Kazakhstani investors the opportunity to directly invest in government tenders for the first time in a Sharia compliant manner. “Investors are looking for innovative platforms and Sharia compliant opportunities,” said Timur Rustemov, Chief Executive Officer at Mudarabah Capital. “Our company is addressing this dynamic landscape and provides access to the benefits of government tender with value creation for the first time.” “By having an organization with the knowledge and experience and the ability to help us attain and comply with Sharia principles, we are certain that our investors will get the Sharia assurance they seek,” stated Timur.
Advising and supervising on the establishment and operation of Mudarabah Capital’s offering is Shariyah Review Bureau one of the leading Sharia advisory firm with an international panel of 31 scholars from 16 countries. In recent years, local growth in Kazakhstan seems to be booming for Sharia compliant offerings as Shariyah Review Bureau has seen more and more companies approaching them to evaluate products and transactions. “With an extensive track record of serving clients around the world, and having been successfully engaged by banks and financing companies within Kazakhstan since 2015, we are now seeking to move forward and help more institutions transform their products and investments in light of Sharia principles and fill the demand in the investment market,” said Yasser S. Dahlawi, CEO at Shariyah Review Bureau.
“Our firm is looking forward to now auditing and supervising Mudarabah Capital’s investment program.” “By leveraging our scholarly resources and experience in financial transactions, we think that more Islamic investment offerings will help bring growth and innovation to the industry here in Kazakhstan,” Yasser added.