Don’t let TPP jeopardise Malaysia’s future

Don’t let TPP jeopardise Malaysia’s future


Prime Minister Datuk Seri Najib Razak is facing his last best chance to reverse the course of the Trans-Pacific Partnership, or TPP, a new international economic agreement that would lock in unequal trading relationships between advanced economy countries, such as the United States, Japan, Canada, and Australia, and developing economies like Malaysia.

TPP negotiators are now in what they hope is the final round to conclude this agreement. Political leaders will boast of negotiating for the best interests of their people and country.

But the reality is that special corporate interests – in the United States as elsewhere – have been given far too much influence on the negotiations. The agreement will go far beyond just cutting tariffs and quotas to mandate fundamental changes in each country’s legal, judicial, and regulatory institutions – a sop to the moneyed lobbies who have had more access to the process than concerned citizens or even lawmakers.

Given past experience with US-led trade agreements, and what we glean from documents leaked from the confidential negotiations, it is clear that Malaysia’s negotiators are giving away much to advanced country business interests.
It is less clear why they would, given the economic loss Malaysia is expected to get in return for such a deal.

Typically, one thinks of negotiation as one side giving something in order to get something else in return. But with the TPP, it is not clear what Malaysia would be getting.

Economists at the United Nations Conference on Trade and Development, UNCTAD, forecast that Malaysia would actually be a net trade loser as a result of joining TPP, with difference between the value Malaysia produces for export and the value it imports, the trade balance, declining by US$17 billion (RM75 billion) per year as a result of the agreement. In other words, the TPP would make Malaysia worse off by the most straightforward of economic measures.

These trade agreements are not free-trade agreements, but managed trade agreements, and typically managed for the interests of corporate interests.

And while the name Trans-Pacific Partnership suggests a “partnership”, it is a special kind of partnership, where one country, the US, calls most of the shots, giving into other “partners” the bare minimum necessary to secure compliance from their corporate and other special interests.

Not surprisingly, the big winners are corporate interests in the US, the big losers are ordinary citizens, both in the US and elsewhere.

But Malaysia stands out as one of the countries where as it now stands even the country’s economic interests stand to lose, with iron and steel, aluminium, mineral fuels, plastics, and rubber are among the sectors that will be hurt.

The shock to this industrial employment and investment will occur at the same time that Malaysian agricultural producers face greater import competition.

But the harm the TPP would do to Malaysian industry is just the tip of the iceberg. Other features make it an even more dramatically bad deal.

First, TPP would restrict member countries’ governments – including Malaysia’s – from passing regulations to protect public health, safety, and the environment, or any other aspect of the public good.

That’s because the TPP would create investor-state dispute settlement (ISDS) mechanisms that would allow foreigners to sue the government when they think a regulation will harm their profits. The arbitration would be private and binding, even if the outcome contradicts domestic laws.

And the company could be compensated for the loss of its expected profits, not just for its past investments, even if its profits are generated by selling products that kill people and if there is no discrimination involved in the regulation.

International corporate interests tout ISDS mechanisms as investment-protecting, but that is sheer nonsense: they are demanding similar provisions of European countries whose legal system provides every bit as good protection for property rights as the US.

In reality they are a backhanded way of undermining countries’ ability to protect the health and safety of their citizens, the environment, or even the economy. Cigarette companies, for instance, can sue a government for requiring particular packaging for tobacco products –simply by claiming it hurts their profits.

These are not hypothetical threats – similar investment agreements already exist and have led to such suits.

Malaysia’s TPP partner Peru is currently facing a US$800 million claim by US investor Renco over whether Renco can continue to operate a lead smelter – ranked among the world’s 10 most polluted sites – and whether it can avoid paying compensation for the victims and to remediate the site.

In another case, Australia is currently facing a suit over public health warning labels on cigarette packages intended to curb tobacco smoking, as is Uruguay (which is not a TPP partner).

Canada, under threat of suit, backed down from similar proposed regulations. And Mexico has been forced to pay US$15 million after arbitrators found error with a state government decision shut down an unpermitted toxic waste dump found to be leaking into the groundwater.

Existing ISDS mechanisms are bad enough. Their radical expansion under TPP would be disastrous.

Second, the TPP would effectively outlaw countries’ efforts to protect themselves from international financial speculators, who inject money into local economies when they’re hot and take money out as soon as they cool.

Such unchecked short-term capital flows cause instability and promote crises, as Malaysia knows full well from the 1997-98 Asian financial crisis. Malaysia used capital controls to protect its people from the worst effects of that crisis.

The result was a shorter and shallower downturn than elsewhere, with a smaller legacy of debt burdening future growth.

Mainstream economists now widely recognise that capital controls are an essential tool for financial regulation – even the International Monetary Fund, which once campaigned against them, has finally admitted their importance.

Since the crisis, Malaysia, has discarded its capital controls, but would be well advised to reinstate them were it to face another episode of financial turbulence like the last.

The TPP would effectively prevent it from even having the choice of reinstating them in the future – throwing it into the hands of the IMF, with the consequence surrender of its economic sovereignty, or forcing it to face even worse choices.

Malaysians need to reflect: what would have happened back then if there had been an agreement like TPP in place? Most likely, Malaysia would still be suffering the economic and political consequences.

A third way TPP locks in the unequal advantages of advanced economy countries is by raising intellectual property (IP) protection in ways that raise profits for intellectual property owners at the expense of everyone else.

The impact of more stringent IP can be seen most clearly when it comes to life-saving medicines. Driven by “Big Pharma” lobbyists, American negotiators are pressing TPP countries to accept protections that will boost their profits, not from innovating new medicines but by keeping potential competitors out of the market and charging consumers higher prices.

It accomplishes this through a variety of seemingly arcane rule changes – buried in jargon about “patent linkage” and “biologics” – which collectively would allow pharmaceutical companies to extend their monopolies for many more years than they currently can.

Mylan, a leading generic medicine manufacturer, has warned that TPP may in effect shut their business out of participating countries – meaning not only will Malaysians pay more for medicines, but that some medicines may cease to be readily available in Malaysia.

Rightly done, greater trade and investment integration with the world promises a lot for Malaysia, but the TPP is not the way to accomplish it.

There is no evidence that such kinds of provisions are contained in the TPP. What they will do is ensure that more of the wages of hardworking Malaysians end up in the pockets of global corporations.

If Najib truly believes in putting the Malaysian people first, he will instruct his negotiators in Atlanta to ensure (a) that Malaysia at least gains economically from the trade agreement; (b) that its citizens continue to have access to generic medicines at affordable prices; and (c) that the TPP leaves Malaysia’s economic future its own hands, not those of multinational investors.

The bottom line must be that TPP make space for Malaysia’s development needs. His negotiators have a hard task ahead, for as it now stands, TPP is designed to set the economy back and to take away some of the critical tools that it needs to promote the health of its people and its economy. – October 2, 2015.

* Joseph Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and chief economist at the Roosevelt Institute. Adam Hersh is senior economist at the Roosevelt Institute and visiting scholar at Columbia University’s Initiative for Policy Dialogue.

Islamic Finance market set to reach $3.25 trillion by 2020

Islamic Finance market set to reach $3.25 trillion by 2020 Commercial banking contributes to about $1.34 trillion, and expected to be at more than $2.5 trillion by 2020

Available at:

Dubai: World Islamic finance market is set to almost double by 2020 from the current $1.81 trillion to $3.25 trillion, led by banking and Takaful assets, a study has revealed.

Commercial banking contributes to about $1.34 trillion, while $33.4 billion is contributed by takaful insurance, while sukuks contribute to about $295 billion of the world Islamic Finance market.

“It is growing at about 10 per cent per annum, with the significant concentration of wealth in Islamic banking,” said Mustafa Adel, Acting Head of Islamic Finance at Thomson Reuters, adding commercial banking assets is projected to reach $2.6 trillion by 2020.

The growth has been fuelled by banking and Takaful assets, which have grown 12 per cent and 10 per cent respectively, while sukuk and funds witnessed modest growth of 6 per cent and 7 per cent respectively.

Various countries in the Islamic finance space are very sensitive to issues like interest rates and falling oil prices, and experts reckon this could have strong implications for the emerging economies.

“The chilling effect of a toxic trifecta of macro economic risk-anaemic real sector growth, lower capital inflows, and worsening domestic finances sparked by expected US interest rates rises, would combine to create strong downward pressure on emerging economies,” stated the report, titled ‘State of the Global Islamic Economy 2015/16’.

The continued presence of significant macroeconomic and geopolitical hazards do not augur well for Islamic Finance sector. Economically many countries like Indonesia and Turkey remain fairly exposed to this damaging trifecta of low real sector growth, reduced capital inflows and impact of rising rates in the US.

As far as the falling oil prices are concerned, the situation presents a broader dilemma for various Islamic countries, on how they would maintain their long term public spending without impacting its fiscal sustainability.

Dubai’s competencies:

“With the Islamic economy, we are utilising Dubai competencies in general, as it is a well developed trade hub, it has well developed physical and regulatory infrastructure,” said Abdulla Mohammad Al Awar, chief executive of Dubai Islamic Economy Development Centre.

“Our concentration is on creating synergies within sectors, like for example finance is used to fuel growth in Halal, tourism, etc, and that’s the ultimate goal,” he added.

But with this comes many challenges, experts said.

“Companies are not able to tap the global Muslim market because standards and regulations vary significantly. That obviously is a challenge, but there is a huge opportunity as well that exist within that. Countries in the Asean, GCC region is looking to developed a single standardised structure, so with that companies would be able to achieve the economies of scale as opposed to global chains,” Adel said.

Islamic Finance expected to grow to 3 trillion by 2018

Islamic Finance expected to grow to 3 trillion by 2018

13 August 2015 Available at:

Islamic finance has been growing rapidly over the past decades, reaching $1.8 trillion in 2014 and is expected to exceed $3 trillion by 2018. In a recent article by BearingPoint Institute, the consulting firm considers the differences between the partnership practice of Islamic banking and the practice of interest. The firm also explores the wider challenges faced by both Islamic and western banking institutions as the practice of Islamic banking further expands to meet the needs of up to 1.6 billion potential participants in Islamic FINANCIAL products and services. How finance works is somewhat rigidly understood within much of the Western FINANCIAL world, and while companies are developing potentially disruptive new financial products, as well as creating new platforms on which to access funding, the fundamentals remain relatively similar. Islamic states, such as Saudi Arabia, Qatar and Malaysia, also practice a form of finance, called Islamic finance, which eschews one of Western finances fundamental concepts: interest.

Islamic finance

Interest has the potential to be leveraged punitively, where the need of the beneficiary is taken advantage of by those with means. To prohibit less than ethical practices within finance, Islamic finance seeks to SHARE risk/reward as a key tenet. Banks are required to build a clear understanding of what is being financed, with the agreement between parties more akin to a partnership. The principles of Islamic banking come from the Sharia law that prohibits usury, uncertainty and speculation; rather it requires transparency and necessitates physical presence for money transfers. The rise of Islamic Finance As its practices are firmly rooted in ethical constraints on practices, with profit not an above all but state imposition, Islamic banking has quietly enjoyed a growing MARKET share in Saudi Arabia, Qatar and Malaysia, recently reaching 50%. Some of the region’s most powerful banking institutions are engaged in the practice, including Al Rahji Bank and Bank Al Jazira in Saudi Arabia, as well as the Kuwait Finance House. Today Islamic banking is a $1.8 trillion dollar FINANCIAL structure, with a large number of different segments being served by Islamic banking institutions. The banking practice is growing rapidly, with double digits, and is expected to be worth up to $3 trillion by 2018. One of the main FINANCIAL instruments in Islamic banking is sukuk, which is roughly equivalent to bonds. Through entering into partnerships with small players, Islamic banks provide a different funding source than government finances, which accounts for 62% of some markets. Furthermore, unlike conventional bonds, sukuk grants the investor a share of an asset, along with CASH and risk. The largest part of the total bonds issued in the market has been provided to financial services at 26%, followed by energy & utilities at 25%. Transport comes in at 19% followed by real estate at 8%. Sectors engaging Islamic finance Ethical partnerships.

According to BearingPoint, a number of challenges face the form of banking. The main challenge relates to staying within international and national regulations while at the same time making sure that providers keep their reputations and remain within the spirit and the letter of the practice. Finding relevant skills also is an issue for institutions, at both the level of principles and operational practice required in meeting face to face and upholding strong bonds. Western financial institutions seeking to enter the Islamic financial market face considerable hurdles. According to the researchers, a lack of cultural awareness and a fundamentally wrong intention behind the practice are possible barriers. One way to enter the relevant markets is to create subsidiaries that are their own brands, like ‘Amanah’ created by the HSBC group. As the practice is expanding into new areas, the risk of Western business not fully understanding the way of engaging with partners makes it considerably more difficult to reach out to the Middle East, Africa and Far Eastern countries, such as Malaysia and Indonesia. Banks in these regions are increasingly likely to come across organisations for whom it has a place – customers, partners, suppliers, and governmental and non-governmental organisations.

Islamic financial educators bill to be tabled in Parliament

Islamic financial educators bill to be tabled in Parliament

Available at:

Tan Sri Dr Rais Yatim says an Islamic financial educators bill is expected to be tabled in Parliament by the end of this year or early next year.

Aimed at controlling the quality of Islamic FINANCIAL educators, Tan Sri Dr Rais Yatim said the bill would ensure continued professional development among educators.

It would also make Malaysia a hub and reference centre for Islamic finance, he added.

“Under this bill, appropriate Islamic finance curriculum and training will also be determined in order to maintain the quality of Islamic finance education,” Rais, who is chairman of the International Council of Islamic FINANCIAL Educators International Advisory Panel, told reporters after opening the council’s roundtable meeting in Port Dickson today.
He said Islamic finance had been seen as a very promising sector that had made Malaysia a leader in this sector.

He added that this would also provide an opportunity for Asean member countries to work together and benefit from their regional economic development.

He said Muslims made up over 50% of the Asean population and this would bring great potential for the Islamic finance and banking MARKET.

Rais also expressed hope that through industry experts and scholars union, the quality and professionalism level of talents in Islamic finance and banking could be enhanced.

Forty experts who are also lecturers of Islamic finance, representing 15 local universities, are attending the three-day meeting. – Bernama, August 8, 2015.

Letter from Yusuf al Qaradawi to the Government of Malaysia

Surat Samahah al-Shaykh Yusuf al-Qaradawi kepada Anwar Ibrahim dan Kerajaan Malaysia. (Terjemahan Marwan Bukhari)

Segala puji bagi Allah, selawat dan salam ke atas Rasulullah, keluarga, sahabat dan sesiapa yang mengikuti petunjukNya.
Sesungguhnya Malaysia sebuah negara yang dicintai kami, besar untuk kami dan ada tempat di sisi kami.

Malaysia ada kenangan indah pada diri kami, kecintaan yang benar di hati kami dan kedudukan yang tinggi di akal kami. Hubungan yang erat dan ziarah yang kerap menghimpunkan kami dengan rakyat Malaysia. Sesungguhnya jiwa kami menjadi gembira setiap kali kami melihat Malaysia menuju ketinggian dan kemajuan dalam berbagai-bagai lapangan. Kami berdoa kepada Allah untuk Malaysia, rakyat, kerajaan dan Rajanya; semoga Allah mengekalkan kepada mereka jalan pembangunan dan kemurahan, ikatan dan persaudaraan.

Namun begitu, kami bercita-cita supaya ufuk yang melewati keterbukaan pendidikan dan ekonomi, sosial dan keilmuan, turut merangkumi keterbukaan politik. Begitu juga, agar Kerajaan Malaysia tidak memandang kepada pihak yang membangkangnya sebagaimana pandangan negara-negara Dunia Ketiga. Pembangkang merupakan satu bahagian utama dari komponen negara dalam sistem demokrasi. Ia merupakan teras keamanan demi memelihara kesatuan negara dan kestabilannya, selain supaya para pemuda tidak pergi kepada pemikiran yang melampau dan aliran ekstremisme.

Saya berkata demikian, berdasarkan apa yang sedang dilalui saudara dan sahabat kami, yang dimuliakan Anwar Ibrahim. Beliau telah berdiri dengan peranan yang hebat, hasil yang besar dan usaha yang baik, yang mana negara Malaysia dan seluruh rakyatnya telah memperoleh manfaat dari usaha itu.

Sebagaimana manusia lain, saya mengikuti tuduhan yang aneh terhadap Anwar. Tuduhan itu tidak selari dengan usianya, akhlak, kehidupan beragama, sejarah dan kedudukannya. Demikian juga situasi dan kepelikan di sekelilingnya. Beliau telah dibuktikan tidak bersalah dalam satu penghakiman, kemudian dihukum bersalah dalam satu penghakiman terakhir, hal tersebut berlaku setelah tiada bukti dan telah berlalu satu tempoh yang tidak mungkin boleh dibuktikan lagi.

Sesungguhnya saya mengenali Anwar Ibrahim sewaktu beliau pada awal usia mudanya, bangun menentang pemerintahan yang lalu dan kemudian memimpin belia Malaysia (Angkatan Belia Islam Malaysia (ABIM)). Kemudian kami mengenalinya ketika beliau dipenjara angkara penentangannya (terhadap kerajaan) dan kami mengenalinya selepas beliau dibebaskan dari penjara dan menyertai UMNO. Beliau memimpin beberapa Kementerian, sehingga menjadi orang nombor dua di dalam parti dan kerajaan.

Anwar Ibrahim banyak kali menjemput saya dalam merapatkan (hubungan) antara Parti Islam dan UMNO, saya menyambutnya, kerana saya menyeru kepada kekuatan, kesatuan dan jalan yang lurus buat Malaysia. Saya bersama-sama Anwar Ibrahim saling bekerjasama dalam membangunkan Universiti Islam Antarabangsa Malaysia (UIAM), yang mana tertegak atas dasar integrasi ilmu wahyu, sains dan kemanusiaan.

Saya mengenalinya semasa beliau sedang bersinar di Malaysia, dunia Arab dan di Barat, ketika itu beliau merupakan Timbalan Perdana Menteri dan Menteri Kewangan Malaysia. Beliau merupakan salah seorang pemimpin terhebat Malaysia di era ini, salah seorang yang menyumbang kepada kebangkitan negara. Dunia pada masa itu menantinya untuk menjadi Perdana Menteri, pemimpin Malaysia bagi era baru, (namun ia tidak berlaku) angkara kerosakan politik yang menimpa kita.

Saya menganggapnya sebagai seorang Muslim yang benar, mukmin yang istiqamah, menunaikan kewajipan, menjauhi dosa-dosa besar dan perbuatan yang haram. Beliau beramal untuk kemuliaan agamanya, ketinggian negara dan khidmat kepada rakyatnya. Allah lah yang layak menilainya, saya tidak layak menilainya di hadapan Allah.

Hari ini, Anwar Ibrahim merupakan satu-satunya orang politik yang telah dan sedang ditimpa dengan kes-kes yang meragukan, dan beliau dipenjara satu demi satu. Kalau saya meragui akan perbuatannya pada apa yang dituduh, pasti saya tidak menulis seperti apa yang ditulis sekarang.

Sebenarnya, saya boleh untuk berdiam dari apa yang sedang dideritai Anwar Ibrahim di penjara. Namun pengiktirafan kepada beliau, pengetahuan akannya dan kejujurannya, selain kerana nasihat ikhlas daripada saya kepada rakyat dan kerajaan Malaysia; (semua itu) menghalang saya untuk tidak berpihak dari topik ini.

Bahkan itu mewajibkan saya untuk menyampaikan seruan kepada Duli Yang Maha Mulia, Yang Dipertuan Agong, Sultan Abdul Halim. Demikian juga kepada Yang Amat Berhormat Dato’ Sri Mohd Najib Tun Abdul Razak; Perdana Menteri Malaysia, supaya memberikan pengampunan kepada Anwar Ibrahim. Lebih-lebih lagi isu ini tidak berlaku pada zaman Perdana Menteri sekarang; (PM sekarang) seorang yang saya telah temui dan berutus surat dengannya, saya membantunya dan saya telah menjaga hubungan dengannya. Saya mengiranya dengan izin Allah akan menyambut seruan ini.

Saya menyeru agar kita menutup episod lalu yang mana ia menyakitkan negara Malaysia dan para pimpinannya. Demi Allah, sesungguhnya saya sangat ingin menyatukan rakyat negara Malaysia, bahkan menyatukan seluruh umat Islam.

Dan sesungguhnya agama Islam ini ialah agama kamu, agama yang satu asas pokoknya, dan Akulah Tuhan kamu; maka bertaqwalah kamu kepadaKu.
(Al-Mukminun: 52)
“Dan berpegang teguhlah kamu sekalian kepada tali Allah (agama Islam), dan janganlah kamu bercerai-berai…”
(Al-i-’Imran: 103)
“… dan janganlah kamu berbantah-bantahan; kalau tidak nescaya kamu menjadi lemah semangat dan hilang kekuatan kamu, dan sabarlah (menghadapi segala kesukaran dengan cekal hati); sesungguhnya Allah beserta orang-orang yang sabar.”
(Al-Anfal: 46)

Ya Allah, satukan lah suara kami di dalam hidayahMu, hati-hati kami atas ketakwaan padaMu, jiwa-jiwa kami atas kasih sayangMu, dan (satukan) azam-azam kami untuk meneruskan kebaikan dan sebaik-baik amal. Amin.
Yusuf al-Qaradawi
Pengerusi, Kesatuan Ulama Sedunia

From Islamic finance to Muslim lifestyle

From Islamic finance to Muslim lifestyle

Rushdi Siddiqui Available at:

Rushdi believes that a change AGENT must tell the truth to a benevolent dictator, religious hardliner, and compassionately connect with youth and have nots.

Published: 7 July 2015

Only when you leave, can you arrive.

Colleagues have asked why I have “left” Islamic FINANCE after 15 years leading teams at DOW JONES INDEXES and Thomson Reuters?

It’s not about leaving, but about expanding my understanding about “have-not” Muslim needs.

Islamic FINANCE has reached only 38 million out of two billion million Muslims (Ernst & Young) in 40 years, and it’s more about the bankable and those with collateral.
Yes, Islamic finance is only the “grease” for the economy and not the economy.

In taking a step back and looking at the landscape, there was a light-bulb moment few years ago that something was missing in ACTION (MIA).

The original vision of the founders of Islamic banking, from Prince Faisal of DMI to Saleh Kamel of Albaraka to Saeed Lootah of Dubai Islamic Bank, was about FINANCIAL inclusion of the non-bankable. Otherwise, what’s the difference with conventional banking?

By non-bankable, I include the youth, say, under age of 30. They want ACCESS to risk capital to build a prototype of their idea, or finish building or start marketing their prototype.

So, the question becomes, what has Islamic BANKING AND FINANCE done for the poor versus the bankable, and what has it done for young entrepreneurs?

Today, sukuk and murabaha, alter ego of Islamic banking, are not FUNDING young people with ideas or poor people with Grameen bank like opportunities. (Note: Bangladesh’s Grameen bank is not an Islamic bank, as its imputed INTEREST RATES are above market rates.)

Furthermore, lets not confuse Islamic PRIVATE EQUITY (PE), linked to buyout of established companies via compliant structures, to Islamic venture capital, which exists more at conferences than in reality.

Finally, the sovereign wealth funds (SWFs) in the Muslim countries, like the largest in the Muslim world, ADIA in Abu Dhabi, have not yet invested in start-ups, even though the latter is an important ASSET class for a diversified portfolio.


The vision of Zilzar is about being a benefit-driven corporation, and not a for-profit only or non-profit only.

A benefit corporation is beyond CSR, SRI, and ESG, it’s about identifying the stakeholders in its entire ecosystem and establishing systemic linkages that provides synergistic benefits (connectivity).

There are other definitions, but we have customised it based upon how and where we see gaps in the Muslim lifestyle marketplace.

The gaps we have identified can be said to be the backbone of the Islamic digital economy.

The digital economy is the future needing blue-printing today, as the actual Muslim economies, mostly COMMODITY based, have not uplifted the lives, lifestyles or living of local people, ex outliers of select GCC countries.

Can we do more? Yes, we must do more, today!


The biggest problem in the Muslim world is not politics (democracy), religious differences (Shia and Sunni), or corruption (Transparency International’s low ranking), but the plight of micro-enterprises and SMEs.

These are the backbone of any country, emerging or developed, as they provide the majority of employment. Yet, access to FINANCING, be it conventional or risk-averse Islamic, is just not there or very difficult to tap.

Banks and SMEs do not fit seamlessly with each other today. The alleged challenges banks encounter include lack of interest, lack of customized interest rates for borrowers, underwriting costs are high, approval PROCESS time consuming, etc.

Thus, a matching opportunity has opened, called, ‘peer-to-peer’ (P2P) lending between borrowers and INVESTORS on-line.

From the website of Lending Club:

‘Lending Club is the world’s largest online marketplace connecting borrowers and investors. We’re transforming the banking system to make credit more affordable and investing more rewarding. We operate at a lower cost than traditional bank lending programs and pass the savings on to borrowers in the form of lower rates and to investors in the form of solid RETURNS.’

Islamic P2P lending does exist, for example “connects small businesses in need of capital with people who want to invest. Fast and inexpensive asset-financing for small businesses”.

But, to get greater traction, it’s a function of awareness, and we hope embed one of the P2P players we are having conversations with onto Zilzar platform for the benefit of our vendors. However, there are still regulatory issues to be addressed.

Equity crowd funding

From the website of

“Equity crowd-funding is the name given to the process whereby people (the ‘crowd’) invest in an unlisted company (a company that is not listed on a stock market) in exchange for shares in that company. A shareholder has partial ownership of a company and stands to profit should the company do well. The opposite is also true, so if the company fails investors can lose some, or all, of their investment.”

Thus, equity crowd funding is people’s capitalism with the essence of Islamic finance, risk sharing. For example, Cairo based was the world’s first (Islamic) crowd funding platform, and its has funded companies likes Nofoos, Minbetna, Optimizer, and others in Egypt.

(Full disclosure, I own small percent of Shekra and sit on the board of advisors. We have embedded Shekra onto Zilzar platform, but it has not received approval from Malaysia’s Securities Commission to do business as of yet.)

There are regulatory issues that need to be addressed to protect the interest of the small investors, but best in class regulations from the west exist and can be customised and adopted.

Thus, equity crowd FUNDING presents an interesting opportunity in the Muslim world to (1) provide risk taking capital (2) to young entrepreneurs for (3) building prototypes on ideas or finish building prototypes.

It may be just be the spark to bypass the non-cooperative banking sector, expand stakeholders in the CAPITAL MARKETS and grow an equity culture, a vital element in building a knowledge base economy.

Mobile to mobile (M2M)

Is M2M the electronic version of Hawala?

According to Investopedia website:

“Hawaladars, or Hawala dealers, arrange money transfers that are often backed only by trust, family connections or regional relationships. Hawala originated in South Asia during ancient times, and is used throughout the world today, particularly in the Islamic community as an alternative means of conducting FUNDS transfers. Hawala is frequently referred to as underground banking, which is a misnomer because Hawala services often operate openly and legitimately.”

According to the Thomson Reuters/Dinarstandard study on the Islamic economy, as of 2012, Muslims had 1.3 billion mobile phones or 21% of total, hence, massive opportunity for FINANCIAL inclusion via mobile phones.

For example, from the Economist magazine, Why does Kenya lead the world in mobile money? May 27, 2013:

“Paying for a taxi ride using your mobile phone is easier in Nairobi than it is in New York, thanks to Kenya’s world-leading mobile-money system, M-Pesa.

“Launched in 2007 by Safaricom, the country’s largest mobile-network operator, it is now used by over 17 million Kenyans, equivalent to more than two-thirds of the adult population; around 25% of the country’s gross national product flows through it. M-Pesa lets people transfer CASH using their phones, and is by far the most successful scheme of its type on earth.

“M-Pesa has since been extended to offer loans and SAVINGS products, and can also be used to disburse salaries or pay bills… One study found that in rural Kenyan households that adopted M-Pesa, incomes increased by 5-30%. In addition, the availability of a reliable mobile-payments platform has spawned a host of start-ups in Nairobi, whose business models build on M-Pesa’s foundations…’

M2M has been adopted by a number of Muslim countries, like Afghanistan, but there are a number of challenges, including MONEY laundering.

I would take it one step further, we have yet to see an Islamic payment gateway for e-commerce TRANSACTIONS for, say, halal products, hence, a major opportunity exists. The user would like to have an end-to-end halal solution.

Lessons from Etsy

From Linkedin influencer Bernard Marr:

“Etsy – the online marketplace which connects sellers of handmade goods and traditional craft products with buyers from around the world…

Over the past decade it has risen to become a leader in the market for peer-to-peer TRADING, enabling small-scale manufacturers and retailers make millions of sales each month.”

Now, imagine customer-to-customer (C2C) getting FINANCING via P2P or equity crowd funding and getting paid by M2M transfers. We are trying to do “etsy” with our Made in Penang and Made in Mindanao Powered By Zilzar campaign.


Financial inclusion is the tide that lifts all boats because of the network effect. Islamic FINANCE has yet been able to bring about financial inclusion to the Muslim masses.

A solution for inclusion is access to markets combined with innovative FINANCE, trusted platform, and technology.

What are you doing for inclusion for the masses? – July 7, 2015.

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Russia looks to replace Western loans with Islamic finance

Russia looks to replace Western loans with Islamic finance

June 18, 2015 Alexei Lossan, RBTH
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Islamic FINANCE will help Russian companies make up for their credit shortage, which was in large part caused by the cooling of relations between Russia and the West. Russian banks are already showing interest in this alternative form of credit.

Islamic FINANCE could provide short-term relief to Russian companies.

Islamic finance could help Russian companies hit by Western sanctions to gain ACCESS to credit, Rustam Minnikhanov, President of the predominantly Muslim-populated Russian republic of Tatarstan, said at the Kazan Summit Forum.
“Muslim countries did not join attempts to isolate our country on the international arena, and the latest events in the world economy have shown that Islamic BANKS help counter world crises and supplement the world financial system,” Minnikhanov said. He added that this Islamic finance could not completely substitute Western credit, but instead could provide Russian companies with an important financial instrument. According to IMF’s latest calculations, by the end of 2015 the volume of Islamic finance around the world will amount to $3.4 trillion.

An alternative scheme

“Against the backdrop of world crises, the importance of Islamic finance only increases, because all the operations in this scheme are backed up by real money, while INVESTMENTS become secure and do not carry any risks,” said Qatar’s Undersecretary of Economy and Commerce Sultan Al-Khater. According to the requirements of Islamic banking, it is prohibited to charge interest while lending, while receiving credit essentially implies exchanging one commodity for another.
Ahmad Mohamed Ali Al-Madani, President of the Islamic Development Bank, said, “Islamic finance is by nature tied to real economic activity, which is why such a scheme allows the optimization of the internal resources.” He added, “The concept of dividing risk in Islamic banking stimulates healthy financial practices. In Islamic finance, the transactions are tied to real INVESTMENTS, which helps avoid speculation and the instability related to it.”
Al-Madani suggested that Tatarstan could be promoted as “an Islamic finance hub in Russia.”

Russian banks open to Islamic finance

According to Rustam Minnikhanov, Russian banks, including the country’s largest bank Sberbank, are currently showing an interest in Islamic FINANCE. One of the advocates of the development of Islamic BANKING in Russia is the head of Sberbank, former Russian Minister of Economic Development, German Gref.
“There are still problems with taxation and the lack of qualified personnel, but with the help of our colleagues in the Russian government, we will be able to make this PROCESS more dynamic,” Minnikhanov said. One example is Tatarstan’s largest bank, AK Bark, which has already attracted financing in accordance with Sharia regulations.
In January 2015, the local Alliance Insurance Company started selling an Islamic insurance product called Khalal INVEST.
Minnikhanov also told RBTH that the development of Islamic banking in Russia should be done on a federal level and that there is no talk of creating a unique financial zone in Tatarstan. “Today the KazanSummit is a platform that must change the attitude that Russians and Russian regions have towards Islamic finance, and this is our mission,” he said.
Elvira Nabiullina, Chairwoman of the Central Bank of Russia, met Ahmad Mohamed Ali Al-Madani this week.

Zulkifli Hasan