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Marketing of Islamic financial products

Marketing of Islamic financial products. السلام عليكم ورحمة الله وبركاته. Marketing of Islamic financial products April 24, 2012 Alhuda-CIBE Trainings Avari Towers, Karachi Muhammad Azam Khan National Sales Manager FWU AG - Pakistan Branch. Marketing of Islamic financial products.

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Marketing of Islamic financial products

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  1. Marketing of Islamic financial products السلام عليكم ورحمة الله وبركاته

  2. Marketing of Islamic financial products April 24, 2012Alhuda-CIBE TrainingsAvari Towers, Karachi Muhammad Azam Khan National Sales Manager FWU AG - Pakistan Branch

  3. Marketing of Islamic financial products • 5 full fledged Islamic commercial banks • 12 conventional banks with Islamic banking windows • 840 Plus Islamic banking branches • Around $7 billion in deposits under management, representing approximately 8% market share. Islamic banking industry grew by 30% over the past six years. • 15 out of 24 Asset management companies offering Islamic Funds. • 4 Takaful players in the market Available products: • Islamic Banks / Windows • Islamic Mutual Funds • Takaful

  4. Marketing of Islamic financial products What are we up to? Selling Islamic products OR Selling products the Islamic Way! Have you ever heard of Islamic Beef? OR Islamic Chicken? Then why say Islamic ‘product’? Why not just ‘the product’, for example: Takaful

  5. Islamic Finance • Ebaadaat vs. Muamlaat • Name is not what makes something halaal or haraam; it is: • Process • Documentation • Roles & Responsibilities • Tools of Islamic Finance • Musharakah / Mudarabah • Murabaha • Ijarah • Wakalah

  6. Marketing of Islamic financial products Marketing: • Promotional Activities (ATL & BTL) • Use of Media (We’ve heard discussion about white labeled campaigns from the industry – Much needed) • Direct Sales Force (Personal Selling) • Sales through alternate channels like banks (Personal Selling)

  7. Marketing of Islamic financial products Therefore, most of the growth can be accredited to: PERSONAL SELLING: The Preacher – Believer Relationship and who are these preachers? The Front Line marketing/sales people and how do we make them ‘Right Sell’? Through Extensive Training & Development…

  8. How to Market? • First and foremost …. believe in the differentiation • And remember “SUBMISSION to ALLAH S.W.T.” • The THREE levels of ‘Yaqeen’ (Belief) • Do research - read related material to clarify your concepts • Talk to ‘Learned People’, preferably Shariah Scholars • Get formal education of Shariah Concepts • Attend Seminars / workshops • and then Preach… • But as they say, you must practice what you preach • Still half-hearted? • Then, if you can’t face the heat, leave the kitchen.

  9. Marketing of Islamic financial products What is Takaful? • Takafulis derived from an Arabic word ‘Kafala’ meaning “Mutual Guarantee“ • A system of Islamic Insurance based on the principle of Ta’awun (mutual assistance) and Tabarru’ (Gifts, give aways, donations); where the risk is shared collectively by the group Voluntarily. • This is a pact amongst a group of members or participants who jointly guarantee themselves against loss or damage to anyone as defined in the pact.

  10. Islamic Bibliography for Sales • Defining Takaful: It is derived from an Arabic word ‘Kafala’ meaning “Mutual Guarantee“ – through Sharing • Ta’awun (mutual assistance) ( Urdu: same as Arabic) • Tabarru’ (Gifts, give aways, donations) (Urdu: Tabarruk) • Waqf (fund): An asset (MaalaurWaqt) given in the ownership of Allah but for the benefit of Abdullah (Mankind) • Alhamdulillah, Masha-Allah, Insha-Allah Use of these words is helpful • Shariah: The Islamic Law. Shariah Compliance: Remaining in Ambit of Law • Gharar: Uncertinty,Maysir/Qimar: Gambling • Contribution not Premium – Why?

  11. Open Forum – Discussion / Handling Objections • Your Questions, please! • What kind of objections / concerns you face? Q&A

  12. Jazak-Allah khair!

  13. Features of Takaful 4. Compliant Investment strategies 1. Co-operative Risk-sharing for Protection 3. Gharar is dealt-with, using Tabarru’ 2. Avoidance of Riba (interest) and Maysir (Gambling)

  14. Insured Insured Insured Insured Insurance V/s Takaful Insurance Process Risk Seller Risk Buyer Risk Risk Conventional Insurance Risk Risk

  15. Wakalah Participant Participant Participant Participant Wakalah Insurance V/s Takaful Takaful Process Surplus Wakalah Fee, Claims, Re-Takaful Takaful Operator Waqf Pool Risk sharing Between Participants Investment

  16. Insurance V/s Takaful • ? Risk transfer mechanism • ? • Risk sharing mechanism

  17. Insurance V/s Takaful Risk transfer mechanism • Risk sharing mechanism

  18. Jazak Allah khair…

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