Commissioner SECP Zafar Abdullah inaugurated a new Islamic Finance Centre for the promotion of Islamic investments at the Abbottabad Sarmayakari Markaz on Thursday. As envisioned by the SECP Chairman, this is an initiative of the NBFI and Modaraba Association to expand the reach of regulated Islamic investments.
The SECP is committed to promoting modarabas as pure Islamic financial institutions. In consultation with stakeholders, the SECP has already reviewed the entire regulatory framework for modarabas and has approved the concept paper for structural reforms to implement the concept of modaraba in its true Islamic spirit, said Mr Zafar Abdullah.
He highlighted the fact that to provide a substitute for exploitative financing in the informal sector, the SECP chairman had advised the modaraba sector to set up a consumer-financing centre in Rawalpindi to provide consumer finance to the public, in a regulated form and at affordable rates. The modaraba sector responded overwhelmingly, and four modarabas established the first Islamic Finance Centre in Rawalpindi to provide Islamic finance to low-income customers for the purchase of motorcycles. Until February 28, 2017, the centre had disbursed Rs14.97 million to 249 clients.
Speaking on the occasion, Chairman NBFIs and Modaraba Association Mr Ayaz Dawood informed the audience that initially, the centre would focus on providing investor education and awareness about the NBFIs and the modaraba sector, expanding the outreach of the association’s members to the public in Abbottabad and its adjoining areas. Later, the centre will provide the public with affordable Sharia-compliant financing. He appreciated the vision of Zafar Hijazi, the SECP chairman, who wants to extend the outreach of modarabas and broaden the range of Islamic financial products.
Mr Basheer A Chowdry and Mr Muhammad Shoaib Ibrahim also spoke on the occasion. Senior officials of SECP, CEOs of Modaraba companies and officials of various financial institutions attended the inauguration ceremony.
It may be noted that modaraba is the pioneering form of Islamic finance in Pakistan. At present, it has as many as 80,000 investors, three times more than the number of shareholders in Islamic banks. The modaraba scam has nothing to do with the regulated modaraba sector and in their own best interest, investors interested in Islamic investing must stay from unregulated investment activities.
The Sarmayakari Markaz in Abbottabad is managed by the Central Depository Company and it already has branch offices of some of the leading investment management companies and brokerage houses.
