Non-banking financial institutions (NBFIs) play a crucial role in fulfilling the financing demand that cannot be met by banking institutions. For their indispensable contribution to the global Islamic finance industry, IFN is honored to be recognizing the top Islamic NBFIs through the inaugural IFN Non-Banking Financial Institutions Poll 2020 as voted by the readers of IFN.
Best Islamic Financial Cooperative
The winner of the Best Islamic Financial Cooperative may not have a global stature but that certainly does not undermine its influence and significance within the community it serves, particularly in a country without any Islamic banks. Mauritius may have a fairly supportive Islamic finance legal infrastructure; however, the East African tourism haven’s Islamic banking sector has struggled to take off in the tiny nation of over one million, and took a particularly crushing blow this year when its sole fully-fledged Islamic bank had its license revoked.
The chasm left in the banking sector has emphasized the important pillar that is Al Barakah Multi-Purpose Co-operative Society in ensuring Muslims in Mauritius are still able to access Riba-free financial products in line with their faith. With small humble beginnings in 1998 when several Mauritian Muslims pooled together their resources to form the country’s first Islamic credit cooperative, Al Barakah Multi-Purpose Co-operative Society has grown over the last two decades expanding its operations to nine branches throughout the island and serving over 2,000 members, about 10% of the local Muslim population.
It has developed a slew of Islamic financial products, including home financing, motor vehicle financing, real estate financing, trade financing, general financing as well as a Hajj savings account. As a community-driven institution, Al Barakah Multi-Purpose Co-operative Society also provides Qard Hasan financing for medical and educational purposes. It is also worth noting that the cooperative introduced an internal Social Takaful Fund to cover debts of debtors. The institution has also been active in promoting and educating the public about Islamic finance and sharing its successful co-op model with international peers. Commanding 22% of the votes, Al Barakah Multi-Purpose Cooperative Society took home the title of Best Islamic Financial Cooperative, followed by California’s Ameen Housing Co-operative with 10% of the votes and Bank Kerjasama Rakyat Malaysia with 9%.
Best Islamic Leasing Provider
Winning by the largest margin across all categories with 60% of the votes, Sri Lanka’s largest non-banking financial group LOLC’s Al-Falaah brand was crowned Best Islamic Leasing Provider.
The diversified conglomerate with an impressive international footprint including across South Asia, Southeast Asia and Africa built over 34 years, ventured into Shariah compliant financing under Al-Falaah in 2007. LOLC Al-Falaah offers a wide range of products from savings and investments and business financing to leasing. As one of its first products launched, LOLC Al-Falaah’s Ijarah portfolio is one of its best-performing asset classes, supporting the Islamic finance unit position as one of the top-performing divisions of LOLC Finance in terms of non-performing financing performance, profitability and return on equity. Competitive rentals and diversity in types of leasable assets as well as solid branding equity anchored LOLC Finance’s position in the space of Islamic leasing.
Thailand’s Amanah Leasing Public Company and Ijara Community Development Corporation in North America came in second and third respectively.
Best Islamic Microfinance Institution
Along with Islamic social philanthropic instruments such as Zakat, Waqf and Sadaqah, Shariah compliant microfinance is at the heart of financial inclusion and the democratization of financial access.
Staying true to its mandate of poverty eradication and promoting financial freedom among the financially vulnerable, Amanah Ikhtiar Malaysia (AIM) secured 38% of the votes to become the first to be honored as Best Islamic Microfinance Institution in a tightly contested race. AIM, established in 1987 as a private trust, grew to become Malaysia’s largest microcredit institution. For over 30 years, the Islamic microfinance organization has disbursed hundreds of millions of dollars-worth of financing to Malaysia’s poorest as well as MSMEs.
This year alone, AIM has allocated RM2.7 billion (US$656.28 million) to assist entrepreneurs in the low-income group to expand their business. With almost 380,000 borrowers, AIM expects to lift over 56,000 of them out of poverty in 2020.
Grameen Bank and Palestine for Credit and Development came in second and third respectively with 23% and 13% of the votes.
Best Islamic Private Equity/Venture Capital Firm
Private equity (PE) and venture capital (VC) financing are forces to be reckoned with. Widely acknowledged as a major driver of economic growth, PE and VC activities are also critical in the Islamic finance narrative.
The Best Islamic Private Equity/Venture Capital Firm goes to Gulf Islamic Investments (GII), a familiar name in the space with a strong track record. To date, the UAE-based firm manages US$1.4 billion in assets, securing US$5.5 billion in debt and in excess of US$1.3 billion in equity. GII inherits the track record of Union National Financial Consultancy (renamed GII) and Allied Investment Partners which managed and advised the private assets of some members of the Abu Dhabi royal family; the firm decided to focus solely on Shariah investments in 2014.
As its name implies, GII hunts for yield in various investment opportunities in the GCC across multiple sectors including industrial, manufacturing, transportation and logistics, technology, healthcare, education, energy, tourism and financial services. Despite the depressed investment climate due to the COVID-19 pandemic, GII continues to search for the alpha in opportune asset classes including in India’s US$200 billion healthcare sector with the acquisition of a significant minority stake in a portfolio of healthcare companies including a virus test manufacturing company this year.
Doha Venture Capital and Taqwa Tech were runner-up and second runner-up respectively.
Best Islamic Real Estate Financier
In a clear race to the top, Michigan-based UIF Corporation flexed its Islamic finance capabilities, winning 57% of the votes to be awarded the Best Islamic Real Estate Financier.
The US Islamic financial institution beat the odds amid an economic recession, heightening political tension and market uncertainty. Finding a silver lining during the COVID-19 storm, UIF Corporation generated record profits — about US$1 million a week — in July and originated US$90 million in home financing every month. The firm is working on expanding its network and presence through new partnership home financing across the 26 states it is operating in.
Australia’s Amanah Islamic Finance came in second while another US contender, Guidance Residential, was third.
Best Takaful Company
In the fiercest competition of the IFN Non-Banking Financial Institutions Poll 2020, Etiqa (General and Family Takaful) was neck and neck with its closest rivals but managed to pip its competitors to the post by a hair’s breadth to grab the Best Takaful Company title.
Part of Malaysia’s largest banking group, Maybank, and a joint venture with international insurance company Ageas, Etiqa leverages its deep local expertise and global experience to offer General and Family Takaful services to the Malaysian people and consistently maintain its lead ranking in the Takaful sphere. With over 10,000 agents, 46 branches, 17 offices and over 490 bancassurance networks nationwide, Etiqa is the country’s largest Takaful and insurance provider.
While the COVID-19 pandemic is expected to dent its financial performance for the 2020 financial year, as the whole industry takes a hit, Etiqa is in a solid position to weather the storm bolstered by its robust fundamentals and equally important, its investments into its digital architecture which has prepped the group well to navigate a pandemic environment. Etiqa continues to win customers with its hassle-free purchase and claim experiences, groundbreaking products (it was the first in the country to introduce mental health Takaful coverage early this year) and service to the community with millions channeled toward various relief efforts including for cancer prevention/awareness and COVID-19 this year alone.
Takaful Malaysia and Pak-Qatar Family Takaful were in a deadlock for second place.
Best Re-Takaful Company
Best Re-Takaful Company is awarded to Malaysian Reinsurance (Malaysian Re). The largest national reinsurer by asset in Southeast Asia entered the re-Takaful market in 2016, extending the Halal supply chain to both local and international Takaful operators.
By utilizing a leveraged model, the firm’s re-Takaful division harnesses Malaysian Re’s underwriting best practices including sound rating disciplines, appropriate pricing models and accessibility to readily available actuarial assessments. Rated ‘A’ by Fitch Ratings, Malaysian Re maintains a “very strong” capital buffer and consistently profitable financial performance which would support the reinsurer in coping with the adverse impact of the coronavirus pandemic.
Having started with General re-Takaful solutions, the company continues to steadily expand its Islamic business with new products and collaborations: at the end of last year, it forayed into the Family re-Takaful segment via a strategic partnership with Pacific Life Re to begin servicing Family Takaful operators.
Africa Re and Emirates Re tied for second place.
Congratulations!
IFN would like to congratulate all winners of the inaugural IFN Non-Banking Financial Institutions Poll! Your diligence, adaptability and perseverance in an exceptionally difficult year fraught with unprecedented challenges distinguish you from the rest. Congratulations again on a very well-deserved win.
Category |
Winner |
First runner-up |
Second runner-up |
Best Islamic Financial Cooperative |
Al Barakah Multi-Purpose Co-operative Society |
Ameen Housing Co-operative |
Bank Kerjasama Rakyat Malaysia |
Best Islamic Leasing Provider |
LOLC Al-Falaah |
Amanah Leasing Public Company |
Ijara Community Development Corporation (IjaraCDC) |
Best Islamic Microfinance Institution |
Amanah Ikhtiar Malaysia |
Grameen Bank |
Palestine for Credit and Development – FATEN |
Best Islamic Private Equity/Venture Capital Firm |
Gulf Islamic Investments |
Doha Venture Capital |
Taqwa Tech |
Best Islamic Real Estate Financier |
UIF Corporation |
Amanah Islamic Finance |
Guidance Residential |
Best Takaful Company |
Etiqa (General and Family Takaful) |
NA |
|
Best Re-Takaful Company |
Malaysian Reinsurance |
Africa Re; Emirates Re |
NA |