IFAAS wins world’s first Ethical Finance Innovation Challenge
IFAAS takes honours in the ‘Islamic Finance Industry Development Challenge’
for its innovative new product based on Mudaraba (profit sharing)
26th November 2013 – Leading international Islamic finance advisory firm, IFAAS, today announced that it had won one of the inaugural Ethical Finance Innovation Challenge & Awards, the international award, created by Thomson Reuters and Abu Dhabi Islamic Bank.
IFAAS’ innovative finance product, based on Mudaraba (profit sharing) won the ‘Islamic Finance Industry Development Challenge’ category. This category honours the best-practice business model that addresses the challenges faced in the development of the Islamic financial services industry whilst inspiring integrity and an ethical way of thinking.
The Ethical Finance Innovation Challenge and Awards were created to inspire and recognise a fresh way of thinking by promoting some of the most dynamic, innovative ideas and solutions around integrity and growth. Organisers received over 100 international applications which were subject to a rigorous, multi-stage selection process that included review of the materials by specialists and presentations to Shariah scholars. The winner was selected today in Dubai where delegates of the Global Islamic Economy Summit voted for the three finalist products in the Islamic Finance Industry Development category.
Shaher Abbas, IFAAS Director for Shariah Compliance & Product Development, presented the new IFAAS product at the high profile event. He successfully argued that it would have a very positive impact on the Islamic finance landscape, which, due to the strict Shariah rules applicable to financial products, is often perceived to be restrictive. He said: “We are pleased to provide a practical solution to Islamic banks that enables them to offer simple and competitive products for business clients. Our product is based on Mudaraba (profit-sharing), the most authentic Islamic finance principle. It has been underutilized until now because of specific inherent risks, but we have successfully mitigated those risks though new control measures, which are in strict accordance with AAOIFI Shariah Standards.
“The beauty of this approach is that these control measures can also be applied to Musharaka (profit & loss sharing) and Wakala (agency) agreements with minor amendments, widening the scope for spin-off products,” Mr. Abbas concluded.
IFAAS’ product was also awarded a cash prize of 100,000 USD and Shariah approval from the Shariah Supervisory Board of Abu Dhabi Islamic Bank. IFAAS Managing Director, Farrukh Raza says, “This prestigious award validates our reputation in the Islamic finance industry as innovative thinkers with outstanding knowledge, experience and professionalism. This new Mudaraba product is another reflection of our vision about Islamic finance, which has integrity and dedication at its heart.”
Dr. Sayd Farouk, Global Head Islamic Capital Markets, Thomson Reuters, says, “The impetus behind organising this award in partnership with Abu Dhabi Islamic Bank was to bring fresh and new ideas to the Islamic financial industry. We believe the industry needs to be more innovative in order to enable it to deal with its rapid pace of growth. The interest from the industry was overwhelming and we are pleased that the best product out of over one hundred submissions made its way to the top through a challenging and transparent process. We congratulate IFAAS for winning the first award and hope that this wave of innovation continues to serve it, and its customers, in the years that lie ahead.”
Product development is one of the key services that IFAAS offers to its international client base and to date has developed more than 100 Islamic financial products. Other services offered by IFAAS include Shariah compliance & audit, regulatory reviews, training, and feasibility studies. As a key player in the Islamic financial industry, IFAAS has also published a number of ground-breaking market reports for several countries. The company operates from offices in the UK, France and Bahrain.
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