Could you provide a brief journey of how you arrived where you are today?
In early 1995, we consulted with a small segment of the Muslim population in Sydney, NSW regarding the need to cater the basic needs of those interested in Islamic finance. Following numerous meetings and negotiations, the Registry of Co-operatives in NSW approved our proposal to form a cooperative. The idea was primarily to purchase houses, cars or other household goods through the cooperative that would operate in line with the Registry of Co-operatives Act 1992 without compromising fundamental Islamic principles. The formation meeting was conducted successfully with an initial membership fee capital of A$2,000 (US$1,789) from a membership of 20 contributing A$100 (US$89.44) each. In May 1998, Islamic Co-operative Finance Australia Ltd was registered. This is the first of its kind in NSW, Australia.
What does your role involve?
As chairman of the board of directors, my responsibility has been to look after the overall affairs of the cooperative, including general well-being of its membership, regularly dealing with and updating of the various regulatory issues as imposed by the government bodies as well as liaising with our own brilliant counterparts including five board members, management team and three Shariah board members and community leaders.
What is your greatest achievement to date?
To obtain approval from the government regulatory authority in dealing with business activities and financial affairs of our members based on Islamic Shariah, recognized our service as a credible alternative to the traditional financial dealings. In less than a decade, we were able to register and promote our activities in the Australian Capital Territory and promote community awareness.
Which of your products/services deliver the best results?
The objective of our cooperative was to facilitate our members’ purchasing/owning of homes, cars and small businesses using an applicable mode of Islamic finance such as Musharakah, Murabahah and Istisnah. Moreover, members enjoy the benefits of fulfilling obligations of religious duties such as Hajj Fund, Zakat Fund and Qard-e-Hasan Fund. The Children Education Fund opportunity was made available for higher education purposes after the graduation of student members, which further encourages potential members to join the cooperative.
What are the strengths of your business?
The strength of our business has been to accept and appreciate any feedback and criticism from any quarters to better serve our members. We are transparent in our dealings and patiently endeavor to continuously learn, amend and adapt to any new challenges.
What are the factors contributing to the success of your company?
Important factors that raised our profile in the community included our commitment to seeking the pleasure of Allah and hence a strong commitment to compliance of Islamic finance. A great deal of perseverance from our board, the Shariah board and the joining members in facing challenges in the complex financial market have also been key elements of our existence and growth rate. In a decade, we have grown to 436 members with a share capital of more than 2.2 million units primarily due to our striving towards Shariah guidelines. We are mindful of our daily activities, checking and amending working formulas if required, in light of Islamic law pertaining to business and finance and in line with the current regulatory issues.
What are the obstacles faced in running your business today?
Perhaps one of the most important obstacles is that we have a lack of funding and/or internal/external investors based on Shariah. This prevents us from assisting our members with the finance required based on equity profit and loss-sharing concepts. We have a shortage of expertise in Islamic finance and financial resources in dealing with the huge demand and supply of Shariah compliant products. It’s not about how we would be able to fit in with the mainstream traditional financial products and services but to develop and deliver our own financial package.
Where do you see the Islamic finance industry, maybe in the next five years?
The Islamic finance industry is ever growing with a current trillion-dollar. I am highly optimistic about its enormous growth potential as Allah, the Most Knowledgeable, has permitted trade and forbidden usury. Hence, Islamic finance is the best solution to the modern-day global economic crisis. I am also quite hopeful that Islamic finance will be well placed, especially in several Muslim countries, within the next five years including in dealing with the growing demand in the Takaful industry.
Name one thing you would like to see change in the world of Islamic finance?
I would like to see the leaders in the Muslim world developing and implementing their own sound economic system as a package, professionally equipped with expertise and resources based on Islamic principles and guidelines to serve fellow Muslim as well as non-Muslim communities interested in Islamic financial products.
ICFA Limited is a registered Australian Co-operative which provides methods of investment and finance opportunities for its members in line with Islamic principles. www.icfal.com.au