AL BARAKAH multi-purpose Co-operative Society Limited

1. AL BARAKAH multi-purpose Co-operative Society Limited H.O.: Madam Lolo Road, Rose Belle, Mauritius Tel: (+230) 6275766 E-mail: albarakahcoop@yahoo.com; www.albarakahcoop.org ISLAMIC FINANCIAL COOPERATIVE Case study of AL BARAKAH Multi-purpose Cooperative Society, Mauritius

2. Agenda • Introduction: The Islamic Finance industry • The Coop Movement & Financial Cooperatives /CU • Financial Cooperatives /Credit Unions Worldwide • The Financial Cooperatives/ CU Movement and Islamic Financial Institutions • Islamic Financial Cooperatives/Credit Unions • Setting up Islamic Financial Cooperatives/CU/SACCO • Financing Instruments of Islamic Financial Cooperatives/CU • Reserves and other Funds of IFC/ICU • Case Study of AL Barakah MCSL • Mauritius and Africa • Conclusion

3. Setting up Islamic Financial Coop/CU/ SACCOS in Africa • Conceptual Framework “Cooperate with all in what is good and pious and do not cooperate in what is sinful and wicked…” (Q-5:2)- Ta’awoun • Legal Framework –Easy formation, less regulated than other corporate sector (Cooperatives Act ,Credit Union Act); Shari'ah-compliant- WOCCU • Values: • IF based on Islamic ethics/values: justice, sharing, solidarity • Coop based on values: honesty, equity, solidarity, self-help,mutual-help etc • Common bond - IB • CBO(community-based organization) / Member-owned organization • Small seed capital – can promote saving culture among the community • Incentives & Benefits – Tax Relief in certain countries • Multi-purposes - open to various types of economic activity • Broaden ownership of business and reduce concentration of wealth • Democratisation of the IFS (SMFInst.)

4. Islamic Financial Coop/CU • Formation & Organization Initial contribution of founder members who are conscientious and committed people to provide an alternative to the interest-based institution. • Democratic Structure / Management • Democratic: 1man-1vote, Board & Sub-committees • Shareholdings / Membership / Returns • Open to people from all walks of life, established by the people, for the people • Community-based organization (CBO) - Member-owned society where the spirit of ownership and sense of belonging to an Islamic financial institution will be present. • Financial dignity by mobilizing capital from the community/members -shares, savings and deposits • Not-for-profit-maximization • Organs of Control, Audit & Good Governance AGM appoint Internal Controller, External Auditor, sub-committees and Shari’ah Supervisory Committee to ensure that the affairs of the institution are conducted in accordance with Shari’ah and within provisions of the Law of the country

5. Islamic Credit Unions Marketing • Lack of awareness of Islamic financial products. • Correcting misconceptions about ICU - not a charitable institution or a benevolent society but a business organization operating on Islamic lines for the community. Education & Training • Islamic Finance Education Program (IFEP) for existing and potential members • Topics and aspects such as Conceptual Framework of Islamic Finance, Basic Islamic Financial Laws, Quranic Verses concerning the economic system of Islam, Ethics and operation of the ICU. • Weekly/Fortnightly education sessions for members and their beneficiaries/dependents/sureties + opportunities to conduct financial transactions and other businesses of the ICU at the same time - e.g. application for membership, financing, collection of installments, announcements. Location Inception stage - Mosques, Islamic educational institutions, and centers can be used for these activities. Financing Instruments Murabahah (Cost- plus financing); Ijarah (Leasing); Istisnah (Construction Finance); Salam (Forward purchase of a commodity); Mudarabah (Passive Partnership); Musharakah (Joint venture); Musharakah Mutanaqisa (Diminishing Musharakah); Qard (Interest-free loan)

6. Islamic Credit Unions ISLAMIC CREDIT UNION:AN INCLUSIVE FINANCIAL INSTITUTION TO MEET THE NEEDS OF THE COMMUNITY IN AFRICA

7. Islamic Credit Unions

8. Al BarakahMulti-purpose Co-operative Society Limited Case study

9. Mauritius and Africa • Belonging to Africa, Mauritius is a dot on world map, but a reference in the region • Mauritius is a member of the African Union, Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the Indian Ocean Rim – Association for Regional Cooperation (IOR-ARC). • In 2012 the Board of Investment of Mauritius launched the Africa Centre of Excellence to discover investment opportunities in the African continent, to provide information on Mauritian companies doing business in Africa, to facilitate joint venture opportunities between the international investors and local companies. • Mauritius has signed Investment Promotion and Protection Agreements (IPPAs) with 15 African countries • International Arbitration Act 2008 – Mauritius is increasingly being used as an arbitration jurisdiction and in particular as a centre for International Commercial and Investment Arbitration, in the African Region. • Chartered Institute of Logistics and Transport Africa Forum Meeting, Wednesday 09 March 2016

10. Facilities in Mauritius • Facilities in Mauritius -Liberalised Legal Services to enable foreign law firms to establish local offices or joint ventures with Mauritian lawyers • Air transportation sector, a historical agreement has been signed with Changi Airport Singapore for the establishment of an air corridor between Asia and Africa using Mauritius and Singapore as hubs. Air Mauritius has made good progress to increase the number of destinations and frequencies in Africa, which is also planning to operate to Dar-es-Salam and Maputo as from May this year. Other destinations such as Harare, Lusaka, Mbabane and Gaborone upcoming… ( PM Keynote Address ) • International banks operating in Mauritius – HSBC, Standard chartered • Bilingual – English, French & other Asian languages • Commitment of authorities to promulgate Islamic Finance in Mauritius  • 2007: Adherence of the BOM as Associate Member to IFSB. Graduated to Full Membership in October 2008 • April 2009: Launch of Islamic window by HSBC Amanah and October 2009: Islamic banking license granted to Century Banking Corporation Ltd • 2010: Signing of Agreement for the establishment of International Islamic Liquidity Management Corporation (IILM). The BOM becomes founding member of IILM.

11. Why Mauritius Quick Facts GDP per capita: approx. USD 9,200 * Moody’s Investors Service: BAA1 (2015) Population: approx. 1.3 million Political System: Democracy with free and fair elections held every 5 years Official Language: English Legal System: dual system (Common & Civil Law) GDP Growth: 3.4% * Unemployment: 8% * * 2015 est. • Impressive track record, political stability and more than 3 decades of sustained economic growth • Secure investment location with established rule of law • Freest and most business-friendly country in Africa • Peaceful, multi-ethnic with a unique lifestyle in a blend of cultures • Investment-friendly regulatory regime • Ocean State with one of the largest Exclusive Economic Zones in the world • Preferential market access to Africa, Europe and the USA • State-of-the-art infrastructure • Active double taxation agreement (DTA) with 43 countries

12. Why MauritiusInternational Benchmarks

13. Geographical Background & Population of Mauritius • Location – I.O, gateway to Africa, South Asia & Asia • Political - Democratic • Multi-religious society • Population: 1.3 M

14. Muslims in Mauritius • Presence in all walks of life: Islamic schools, professionals, orphanage, business, politics, etc. • Contribute enormously in the development of the economy • As a community, little has been done to establish the IBF. • In 1990’s there was a keen desire by Muslims to establish an IB in Mauritius. • Preliminary work carried out – Research - Different Laws, Coop Law • Formation of an Islamic Financial Cooperative/Credit Union in the Cooperative sector - AL BARAKAH

15. Formation of ABMCSL • Formation meeting by promoters & committed members • Draft Rules, Regulations • Registration with the Registrar of Cooperatives (10th June 1998) • Legal Framework Operates: - Within the Co-operative Societies Act 2005 - Within the framework of its rules, regulations and policies - According to Islamic Financial principles

17. Organisational Structure Shari'ah Advisor: Dr. Monzer Kahf

18. Products & Services

20. Other Activities • Creating awareness about Islamic Finance by organizing lectures, training, seminars, conferences, workshop, … • Organising Umrah • Coming Insha Allah * AB Zakat Fund * Halal Tourism • Opportunities with AL BARAKAH for IBF in Mauritius • Legal & Regulatory Framework: • The Banking Act 2004 - Amended 2007 • The FSDA 2001 (Non-Banking activities) • The Cooperative Societies Act 2005 -Membership for corporate bodies for projects/joint ventures.

21. Challenges at various levels • Change in the mindset of Individuals - • Government / Regulators Level • Must support community-level finance by providing a favorable legal, and tax incentives .In many countries, credit unions are governed by the Credit Union Act although the global trend is moving towards the regulation and supervision of credit unions by the Central Bank. (Trinidad and Tobago, Republic of Ireland). The same policy can be applied for the regulation and supervision. • Global Level • Due to the prevalence of ICU globally, there is a need for international bodies of IF such as AAOIFI, ISRA, IFSB and IDB to at least establish a special unit or department for development of this sector. Responsibility as regulator, facilitator and for developing Shariah standards for products that promote these efforts. • WOCCU, has already taken the lead in this perspective by establishing Islamic Investment and Finance Cooperatives in Afghanistan (2004–2012) and afterwards, becoming the first to publish the Islamic Finance Manual (a first known guide for establishing Shari’ah-compliant credit unions in the developing world). Now, WOCCU is shifting its attention to Libya.

22. Conclusion • ICU is in line with both cooperative and Islamic principles • Financial services to all strata of the community in Africa. • Opportunities of managing the wealth of the community in a Shari’ah compliant manner. • ICU will assist to build up a robust community-based financial institution, spread ownership of business and reduce concentration of wealth. • A combination of self-reliance with active participation of the community will strengthen economic and social developmentin Africa • Global prosperity cannot be pursued without the inclusion of the Africa • ICU can make people have to learn to live a modest and balanced material and spiritual lifestyle/good life (Hayat tayyiba) to attain success (falah). • Overall, the whole global community will benefit if they take the initiative to bring about the desired change as Allah says: “…Indeed, Allah will not change the condition of a people until they change what is in themselves…” (Ar-Ra`d 13:11) • Concern for community - Finally it will be the job of everybody

23. Thank You Mr. MamodeRaffick NABEE MOHOMED Founder & Secretary AL BARAKAH MCSL E-mail: albarakahcoop@yahoo.com rafficknm@yahoo.com www.albarakahcoop.org Tel: (+230) 6275766, Mb. 57781738