Islamic Finance
through Cooperatives
in Mauritius
Mr. Raffick Nabee Mohomed
Founder & Secretary
Al Barakah Multi-purpose Cooperative Society
Limited
2nd International & Exhibition on Islamic Banking & Finance
25th August, 2008 at Lahore, Pakistan
About The Speaker
Mr. Mamode Raffick NABEE MOHOMED
Founder and Secretary of Al Barakah Multi-purpose
Cooperative Society Limited, Mauritius.
Mr. Nabee Mohomed holds a Bachelor of Commerce, a Post
Graduate Certificate in Education and a Post Graduate
Diploma in Islamic Banking & Insurance (IIBI-London). He is
a student at IIIBF for the PG Dip. in Islamic Finance. He is an
Educator, also lectures on Islamic Banking & Finance and is
an Associate Fellow of the Institute of Islamic Banking and
Insurance which is based in London.
Mr. Nabee Mohomed has also done a thesis on An empirical
study of the Muslim Family in a rural set up.
He has presented the case study of Al Barakah Coop at
conferences and seminars in Trinidad &Tobago & India. He
has also attended several short courses and training.
SHORT COURSES & TRAINING
• Muslim Credit Union (Trinidad & Tobago)
- Training in Islamic Finance at M.C.U (3rd Feb. to 21 Feb. 1999)
• National Cooperative Training Centre, Mauritius.
- Management & Leadership for Leaders of Cooperative Credit
Unions, (24-25 Oct.2001).
• Cooperative College of Malaysia.
- Project Preparation and Appraisal (23-27 February 2004)
- Corporate Governance (23-26 May 2005)
• Association of Asian Confederation of Credit Unions
(ACCU)
- Modern Management of Cooperative Credit Unions (02-03 July 2008)
• International Islamic University, Islamabad (Pakistan)
- Attended the 22nd International Programme for Human Resource
Development from 14/11/2005 to 14/12/05 at Dawah Academy,
Islamabad.
Our
Organisation
AGENDA
• Geographical background & Muslims in Mauritius
• Islamic Banking & Finance & Muslims in
Mauritius
• Integrating Islamic Finance in Cooperatives
• Organisation of Al Barakah
• Legal Framework
• Products & Services
• Other activities
• Challenges
• Conclusion
• Opportunities with Al Barakah for Islamic Banking
& Finance in Mauritius
Geographical Background & Muslims in
Mauritius
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Mauritius-gateway to the Africa, South Asia & Asia
Multi-religious society:
Population-1.3 M
Hindu
:51%, Christians:28%,
Muslims :18%, Chinese :3%
Muslims presence in all walks of life: Islamic
schools, professionals, orphanage, business, etc.
Muslims have contributed enormously in the dvp.
of the economy
Business operated as family business
But as a community, little has been done to
establish the financial system of Islam.
Islamic Banking & Finance
& Muslims in Mauritius
Keen desire by Muslims to re-establish
their identity
 Establishing an Islamic bank in Mauritius
in 1990’s was a manifestation of this
desire.
 To become part of the Islamic banking
phenomena.
 Preliminary work carried out .
 Formation of a Credit Union in the
Cooperative sector (AL BARAKAH)!

Islamic Finance through Cooperatives

Integrating Islamic Finance in the cooperative
sector:
(1)
Islamic Finance–based on Islamic ethics: justice, fairness,
sharing, benevolence, cooperation.
What is a Co-operative ?
- A cooperative is an autonomous association of persons
united voluntarily to meet their common economic, social and
cultural needs and aspirations through a jointly owned and
democratically controlled enterprise. (ICA)
- Based on values: honesty, openness, equity, equality,
democracy, solidarity, self-help, etc.
- 7 principles of cooperatives: V.o.M, Democratic, M.Eco.
Participation, Autonomy & independence, Education, training
&information, Cooperation among cooperatives, Concern for
community.
Credit Unions are financial cooperatives which are in effect
community banks.
(2)
(3)
Islamic Finance through Cooperatives
Why cooperatives?

1.
2.
3.
4.
5.
6.
7.
8.
Legal framework (Cooperative Societies Act
2005)
Values
Easy formation
Small capital
Cooperative sector is more people-oriented
“Cooperate with all in what is good and pious
and do not cooperate in what is sinful and
wicked….” (Q-5:2)
Islamic Finance within the cooperative sector
around the globe.( T&T, Canada, Malaysia,
Thailand, Australia, India, Singapore,…)
Mauritius?
Islamic Finance through Cooperatives

Why Al Barakah?
1.
To provide an alternative to the interest-based
financial institutions for the community.
(Community-based)
To provide halal investment opportunities and
returns.
To contribute in a halal way to the overall
development of the economy.
2.
3.
4.
Formation of Al Barakah (Registered on 10th
June 1998)
LEGAL FRAMEWORK
Operates:
Within the Co-operative Societies Act
2005
Within the framework of its rules and
regulations
In accordance with Islamic Financial
Laws.
Organisation Structure
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Individuals become shareholders
Shareholders elect B.o.D,Internal
Controller at AGM
B.O.D nominates various Committees
Advisors – Dr. Monzer Kahf (USA)
Br. Imtiaz Ali (T&T)
To be a leading Cooperative Society in
the field of Islamic Finance for a fair
and just society.
To operate as a financial institution
based on Islamic cooperative
principles and providing a wide range
of services on an interest-free basis
Goals


To present a practical model of Islamic Finance
through the cooperative sector
To lay the foundation for an alternative financial
system to the Mauritian population at large.
Objectives
1.
2.
3.
4.
To create a source of credit for its members for
provident and productive purposes.
To provide savings facilities to members
To create the framework to enable members to
manage their financial resources for their
mutual benefit
To promote the welfare and economic interest
of its members.
PRODUCTS & SERVICES BASED ON
ISLAMIC FINANCIAL TECHNIQUES

Schemes based on Murabahah:
1. Household General Financing
2. Computer Financing
3. Traders/Entrepreneurs Financing
4. Home Financing
5. Air Ticket Financing
6. Motor Vehicle Financing
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Istisnaa Financing (Manufacture-Sale)
Partnership with shareholders (M&M)
Interest-Free Loan (Qard-al-Hasan)
Computer Financing
How it works?
• To purchase new computers sets, Laptop, etc...
Amount
Financing Limit
Processing Fee
Mark-Up
Repayment Period
Surety
Collateral
Share Rider
Waiver
Above Rs 10,000 - 50,000
Financed 4 times the shares
Contributed
Rs 250
25%
48 Months
1 or 2 Sureties
Shares / Assets / Computer
Rs 100
1 Month Instalment Yearly
Our Special Funds
Reserve Fund (Statutory)
Islamic Finance Research, Education
& Training Fund (IFRET FUND)
Solidarity Fund
Dividend Equalisation Fund
OTHER ACTIVITIES
Creating awareness about Islamic
Finance.
 Organizing lectures, seminars,
conferences and workshop.
 Organizing mini trade fair, sociocultural programme.

CHALLENGES
1.
2.
3.
4.
5.
6.
7.
Individual/organisational/government
level
Legal framework
Public acceptance
Economic potential
Human Resource
Mass Education
Competition
Islamic Banking &
Financial Services?
• Mauritius wants to connect to this sophisticated and
growing global phenomenon that spans banking, nonbanking financial services,micro-finance,insurance and
capital markets.
• We will also set the regulatory framework for leasing
companies to market products which are shari’ah
compliant. (60)
• And to level the playing field appropriate amendments will
be made to the legislation to make normal banking and
Islamic banking tax neutral.(62)
Budget speech 2008/2009 - Minister of Finance
Opportunities with Al Barakah for
Islamic Banking & Finance in Mauritius
Legal & Regulatory Framework
* The Banking Act 2004- Amendments
2007
* The FSDA 2001-(Non-banking
activities)
* The Cooperative Societies Act 2005
Membership for corporate bodies
Projects/Joint ventures etc.
CONCLUSION
1.
2.
3.
4.
10 years of operation
An eye-opener
Islamic finance at different levels
Well-being of all citizens
M. Raffick Nabee Mohomed
Secretary Al Barakah M.C.S
E-mail: albarakahcoop@hotmail.com
Tel: (230) 6275766, 7781738