AlHuda-Centre of Islamic Banking and Economics (CIBE) is a well known name in Islamic Banking and Finance sector which focuses on training, awareness, advisory and publications on Islamic Banking & Finance in order to promote the industry. AlHuda CIBE has organized a successful Conference "3rd Global Islamic Microfinance Forum" held on 6th & 7th October, 2013 in Dubai. AlHuda CIBE is very much pleased to share the topics and presentations being held in the Forum.

1. Innovation in Islamic M&SME’s
banking
Dr Atef El Shabrawy
CEO of family bank, kingdom of Bahrain
a.elshabrawy@familybankbh.com
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2. Challenges in Muslim Societies
1. Explosion of demand for Islamic finance (Micro & small):
1. Increasing number of unemployed & fresh graduated
2. Exclusion of poor, (youth and women) from financial services
3. Financial services gap of small & micro finance
2. Threats facing MFI’s
1. Weight of microfinance Central Banks rules & regulations on MFI’s
2. Lack of governance & capabilities of MFI’s
3. Weak capabilities & competitiveness of micro entrepreneurs
1. Low skills and absence of proper training
2. Low value-added businesses (farmers, handcrafts, homemade, …).
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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3. Example of M&SME’s finance in Bahrain
Current situation
> BD 20,000
Commercial
Banks
> BD >7000
SME Loans
Bahrain Development Bank
≤ BD 5,000
Opportunities
•Increasing welfare recipients
•High unemployed women %
•Large informal sector
•No specialized finance
•Need to have Islamic finance
Microfinance
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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4. Innovation in the creation of the model
1- Shareholders composition
The partnership between government, NGO’s &
private sector..
Paid-up capital: BB5m & allowed BD15m
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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5. Innovation in the creation of the in model
2- The financial institution type
Shk Issam Ishaq
A specialized Islamic microfinance bank
licensed by Central Bank of Bahrain
Dr Osama Bahr
Dr Mohamden Golam
Sharia Advisory Board
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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6. Innovation in the creation of the instution
3- The Target group
1. First time in business
1. Individuals receiving Government aid
2. Productive Families (home-based business)
3. Women/Unemployed youth & Handicapped
2. Small & Micro businesses (Startup’s)
3. NGO’s & Charity funds
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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Major challenges
Fear of start
Lack of incentives
Lack of support
Rigid services
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7. Innovation in the creation of the instution
4- The Guiding principles
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Islamic finance only
Collateral Free finance
No legal or formal entity required
Low cots finance
Target the Financially Disadvantaged
Bank will go to the Poor
Provide Non-financial services
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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Major challenges
Lack of Collateral
Lack of legal form
Lack of guarantee
Lack of experience
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8. Innovation in the creation of the instution
5- The operational innovation
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Partnership Tamkeen to subsidy the profit rate
Partner with Remittance co. to use branches
Partner with ministries to use their centers
Partnership with NGO’s to deliver
Partnership with collection company
Partnership with BCCI to use business center facilities
Partnership with a legal firm as CS
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
Major challenges
• Delivery cost
• Credit behavior
• Cost of collection
• Geographic coverage
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9. Innovation in the creation of the instution
6- The Non-financial services innovation
1.
2.
3.
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5.
6.
Pre-disbursement induction training
Obligatory entrepreneurship training
Monthly meetings, counseling
Extensive marketing & sales supports
Monthly awards for good customers
Incubators and ministerial services links
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
Major challenges
• Low skills
• absence of training
• Low value-added
businesses
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10. Innovation in the creation of the instution
7- The Social Innovation
• Establish of “Idea Factory” to introduce creative business
ideas
• Organization of “Social Business Weeks”
• Collaboration with Universities students to train clients
• Collaboration with CocaCola to establish “Kiosks” for
disabled
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
Major challenges
• Lack of ideas
• Social role
• Impact on the bank
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11. Partners
NGO’s
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12. Islamic Developed Products
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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13. Achievements since March 2010
About 1700 members
Grameen 1350 & MEF 350 active members
Financed business sectors
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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14. Achievements since March 2010
Number of created jobs
No of clients
1200
4000
3500
1000
3000
800
2500
600
2000
1500
400
1000
200
500
0
1
2010
2
2011
3
0
2012
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
2010
2011
2012
2013 (Upto
April)
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15. Activities & participation..
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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16. Sample of supported businesses
Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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17. Copyright Atef El Shabrawy 2013 : elshabrawy@yahoo.com
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18. ‫!‪Thank you for your attention‬‬
‫قال هللا تعالى‬
‫ُّ ُْ ُ ُُ ْ‬
‫َ َ َ‬
‫َو ُقل اع َم ُلوا َفس َي َرى الله َع َم َلكم َو َرسوله َوال ُم ْؤ ِم ُنون َوس ُت َر ُّدون ِإ َلى عَ‬
‫ِ ْ ْ َ‬
‫ا ِلم‬
‫ِ‬
‫ال َغ ْيب َوالش َهاد ِة َف ُي َن ّب ُئكم ب َما ُكنتم َت ْع َم ُل َ‬
‫ْ ِ َّ َ ِ ُ ِ ُ ْ‬
‫(التوبة : 501 )‬
‫ون‬
‫‪www.familybankbh.com‬‬
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