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> Posted by Jeffrey Riecke, Communications Associate, CFI
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Islamic finance is expected to expand substantially in 2015, from 2014’s total of $2.1 trillion to $2.5 trillion, according to figures released last week by the Al-Huda Centre of Islamic Banking and Economics. In 2011, the industry had assets of about $1 trillion. Islamic microfinance, the segment of Sharia-compliant services targeting clients at the base of the pyramid, only occupies a small slice of the pie, at 1 percent of all Islamic finance globally. However this uptick in Sharia-compliant finance, as well as encouraging recent support for the 650 million Muslims living on less than 2 dollars a day, suggest a rising tide for Islamic microfinance.
The industry findings indicate that not only did Islamic finance surpass the $2 trillion landmark in 2014, it gained traction in nascent markets and entered new ones. Markets still green in offering Islamic finance that showed growth in 2014 include Morocco, Tunisia, Azerbaijan, Libya, and several non-Muslim-majority countries including Nigeria, Tanzania, and South Africa. Among the new markets where Islamic finance took root last year are Australia, Brazil, and China. Globally, there are 1,500 organizations working in Islamic finance across 90 countries – 40 percent of which are non-Muslim-majority countries. The expansion of Islamic finance opens the door for the many Muslims whose beliefs preclude them from accepting finance with interest rates and fee structures outlawed by Sharia doctrine.
> Posted by John Gitau, CEO, Kenya Financial Education Centre
I was once a seminarian. Had I followed that path successfully, I would most probably be a Catholic bishop today. I blame my wife for the failure, though she never admits it. She instead boasts of 27 years of successful marriage complete with two adults and a teenager as offspring. She says, in jest, that marriage is celibacy tweaked. I don’t like her bravado, especially when she recalls how she crafted the fall that felled me. Before you can throw a stone at her, know that we always unite against a common enemy.
During my seminary days and perhaps since time immemorial, religion was about preparing the soul for eternal life. It is a way of life, complete with doctrines, laws, dogmas, liturgies, beliefs, and ethos, all meant to cultivate spirituality. Most religions profess the existence of a deity and a final heavenly place where the souls of the departed rest in eternal peace. Religious orders were givers of hope and takers of monetary offerings.
Today, religious orders are working to change the perception that they are mere purveyors of hope and recipients of offerings. They are increasingly creating programs meant to empower their members in many ways, including economically.
Before we delve into what religion is doing for financial capability, it is important to understand some definitions. Monique Cohen and Candace Nelson in their paper Financial Literacy: A Step for Clients towards Financial Inclusion have given clear definitions of the constituent elements of financial capability as follows:
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