Could you provide a brief journey of how you arrived where you are today?
Prior to joining Islamic International Rating Agency (IIRA), I was with JCR-VIS, a joint venture credit rating agency with Japan Credit Agency in Pakistan for six years. Before that I was the chief executive of Modaraba, an investment company in Pakistan. I hold a Bachelor of Commerce and I am a full member of the UK-based Institute of Chartered Management Accountants (CIMA).
What does your role involve?
As the chief executive officer, I play some important roles, apart from overseeing the day-to-day running of the company.
The first important role that I have is to develop IIRA’s very own rating system and methodology. The development of this is based on the nature of Islamic financial institutions (IFIs), how the IFIs respond to changes and how they manage their mitigating factors, for instance.
The second important role is to train people, to provide the necessary facilities and to expose the staff to the different areas of operations in Islamic finance so that they better understand the rating exercise.
My third important role is to add credibility to IIRA by participating in international seminars to present the different methodologies adopted by IIRA, present the importance of rating exercises of business organizations and to explain how rating exercises can add value to businesses.
What is your greatest achievement to date?
I see my greatest achievement to date as moving IIRA to where it is now. When IIRA started in 2002, it was dormant, with no activity. When I was entrusted to head the agency, I started aggressively to lay the groundwork and we have now started rating four companies, and we are confident of securing at least 10 companies by the end of this year. In fact, we are now able to offer rating services similar to what has been offered by other international rating agencies like Standard and Poor’s or Moody’s.
Which of your products/services deliver the best results?
Broadly speaking, IIRA provides the following services:
- Credit ratings.
- Corporate governance ratings.
- Shariah ratings.
- Sovereign ratings.
Different services are required for different objectives, and thus all the products and services deliver the best results for different requirements.
What are the strengths of your business?
The strength of IIRA comes from the sponsors, namely the Islamic Development Bank (IDB) and other institutions such as rating agencies Capital Intelligence and JCR-VIS, as well as established banks like Bahrain Islamic Bank, Arcapita Bank and Al Baraka Banking Group. The decision to establish an Islamic rating agency was made as the sponsors believed that rating agencies should also play an important role in developing the Islamic finance industry.
What are the factors contributing to the success of your company?
I look at the human factor as a contributing factor to the success of IIRA. IIRA gets people with strong academic backgrounds like MBA holders or professionally qualified personnel, and exposes them to new rating methodologies, new regulations and different standards worldwide.
I personally belief that in any good organization, the human factor is the most important element, provided that they are given vast opportunity and exposure to different environments. Once they have familiarized themselves with the macro issues of finance, then they will have no problems handling issues on the micro level.
What are the obstacles faced in running your business today?
I see obstacles as challenges and the biggest challenge that I face in running a credit rating agency is to convince the market of the importance of rating. I have to instil the rating culture into organizations, especially those in the GCC region, where rating is considered to be merely an additional frill to a company by some.
Where do you see the Islamic finance industry, maybe in the next five years?
By then, the industry will have a self-improvised improvement mechanism, which will include rating. The industry has started to appreciate rating exercises, which helps to firm up their internal practises. While the economy is good, institutions should enhance their internal procedures and when difficult times come, they will have all in place.
Name one thing you would like to see change in the world of Islamic finance?
An institution that sets a standard that can be used by every organization to make all players comparable, thus allowing the free flow of funds from the surplus areas to the parts of the world where it is much-needed.
The Islamic International Rating Agency (IIRA) assists the Islamic financial services industry to gain recognition locally and internationally as strong and capable Shariah compliant financing institutions, adhering to greater standards of disclosure and transparency. It provides maximum insight and clarity into the credit rating, corporate governance and Shariah compliance, in an effort to support the capital market and improve its functioning.