Maldives: More than 50,800 eligible for Zakat

More than 50,800 people across the country are eligible for Zakat (alms for the poor) this year, the Islamic ministry has revealed.

Zakat is an obligatory alms tax collected from the accumulated wealth of all able Muslims.

Deputy minister for Islamic affairs Dr Aishath Muneeza told the press on Monday that more than 13,000 people in Malé and 37,800 people in other islands are registered as poor.

Muneeza said the ministry plans to distribute MVR20 million (US$1.2 million) before Ramadan at a rate of MVR400 (US$26) per person, noting that the sum was the highest so far.

The ministry collected a record MVR52 million (US$3.3 million) as property Zakat last year. The registered number of poor in 2014 was more than 53,000.

Muneeza noted that Zakat payments can also be made through Dhiraagu and Ooreedoo.

Newly appointed Islamic minister Dr Ahmed Ziyad said at the press conference that renovation work on several mosques across the country will begin next week with a target of completion before Ramadan.

(Minivan News / 26 May 2015)

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Islamic finance makes waves in the Maldives

Bank of Maldives Plc began offering Shari’ah-compliant retail deposits on 22 January and promised that retail and commercial loans would follow within two years.

Speaking to Bloomberg, Deputy Minister for Islamic Affairs Aishath Muneeza said that the new offering will help drive an increase in Shari’ah complaint financial assets to five per cent of holdings this year from three per cent.

“The growth of Islamic finance will be at a very fast pace,” she said. “I hope that we will be able to create an Islamic finance centre, which will act as the leader for Islamic finance and the Halal industry in the South Asia region.”

The first Islamic bank in the country, Maldives Islamic Bank (MIB) opened in March 2011 with capital of MVR 150 million ($12 million), operating both a consumer and a corporate unit. At the time, CEO Harith Harun said that there was a strong demand for Islamic banking services in the country.

The Government has since established a Shari’ah advisory board and laid the regulatory groundwork for Sukuk investment. 

According to Bloomberg, the tourism-dependent island nation is looking to diversify its economy by luring Islamic debt sales and deposits from India, where there is a Muslim population of 166 million but no Sukuk or Shari’ah lenders because of opposition from Hindu politicians.

“What the Maldives has going for them is the fact that they’re not as regulated as Sri Lanka or Pakistan,” Baiza Bain, a Director at Islamic finance consultancy Amanie Advisors Pty Ltd., told Bloomberg. “They are more nimble in that sense compared to their bigger rivals in South Asia.

“Maldives has taken the positive step in terms of issuing the initial regulations but what they need to do is attract one of the major players. If you have one of the big banks set up operations there, that alone will be a very positive reinforcement for other banks to consider setting up a presence,” Baiza said.

The Maldives Monetary Authority began selling Shari’ah-complaint treasury bills in 2013 and in the same year, the Housing Development Finance Corporation Plc sold the first Shari’ah compliant bonds. The Government has also been keen to develop the Halal sector, particularly in fish exports.

(Albawaba Business / 12 May 2015)

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Islamic finance has gained confidence in Maldives

Islamic finance has gained confidence in the Maldives with increased awareness among the public of its role in eliminatingRiba (interest), according to Deputy Islamic Minister Dr Aishath Muneeza.

Writing in the Islamic Finance News website, Dr Muneeza stated that Islamic finance has been “spreading like wildfire” since the introduction of Islamic banking and capital market services in 2011.

“Demand for Islamic finance is evident and has proved that there is inherent demand for Islamic finance as the Maldives is a country with a 100% Muslim population. It is hoped that in the upcoming years the Maldives can be used as a global case study to prove the success of Islamic finance,” she wrote.

Under Islamic Shariah, any risk-free or guaranteed rate of return on a loan or investment is considered riba, which is prohibited in Islam.

In her article, Dr Muneeza explained that the first form of Islamic finance introduced in the country was Takaful in 2003, which involves mutual protection of assets and property and joint risk-sharing.

Conventional insurance is also prohibited in Islam because of forbidden elements such as Riba.

Following the wider introduction of Islamic finance in 2011, Dr Muneeza observed that it is now “considered as an integral part in the development of nation”.

The previous year meanwhile saw the introduction of “new innovative Islamic finance instruments” by both the government and private corporations, she noted.

In 2013, the government signed the first sovereign private Sukuk – an asset-backed bond which is structured in accordance with Shariah for trade in the market – deal in addition to the central bank issuing the first Islamic treasury bill.

Moreover, she added, four pieces of regulation governing Sukuk, Islamic securities, Shariah advisors, and the capital market Shariah advisory council were introduced last year.

The government-owned Housing Development Corporation also issued the first corporate Sukuk while the first Islamic hire-purchase product was unveiled by a private company, she noted.

In addition, the government formed the Maldives Hajj Corporation – of which Dr Muneeza is the chairwoman – as a pilgrimage fund and issued Halal certificates for fish products.

The Maldives Transport and Contracting Company (MTCC) hired a Sukuk advisor for real estate projects commencing this year, she added.

“Furthermore, regulatory consents have been given to the Islamic banking window of Bank of Maldives and the Takaful window of Allied Insurance Maldives to start their operations. Some products of these companies have been given consent by the Maldives Monetary Authority,” she wrote.

The government also planned to form “a national-level technical committee to monitor and supervise sovereign Islamic finance issues,” she revealed.

“Definitely, 2013 is a super duper hit year for the growth of Islamic finance industry,” Dr Muneeza suggested.

Developments expected in 2014 meanwhile included the inauguration of “Islamic windows” by the Bank of Maldives and Allied Insurance. The government anticipated that “a large number of customers will switch from conventional banking to Islamic banking when this takes place.”

Islamic fund management would also be introduced this year while the government had plans to “introduce an Islamic finance centre that will not only provide offshore Islamic financial services, but this centre will act as the Islamic finance hub for the whole South Asia region.

(Minivan News / 06 News 2014)

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