Bridging the wealth gap: What to do about global inequality

A January 2017 report issued by Oxfam found that the eight richest individuals in the world have a net wealth of $426 billion–equivalent to the total amount of wealth held by the poorest 50% of the global population (some 3.7 billion people). That same report found that the world’s 10 largest corporations together have revenue greater than the 180 poorest countries combined. Impact investing has a role to play in addressing this shocking inequality of wealth. Although many tools are necessary to reduce wealth disparities, participation banking and trade finance are especially promising and should be supported by the investor community. Participation banks: Serving the underserved Public perception of the finance industry holds that it only exists to benefit the rich, exacerbating the wealth gap and entrenching inequality. While this may be true in many cases, participation banking is different. Part of the community banking movement, participation banking requires financial institutions share responsibility for the poor in society. Each bank takes part in socially responsible activities by setting aside a certain amount of its total funding sources to serve the community in which it operates. One example of the better banking behavior common among participation banks is providing interest-free loans

January 25, 2017 No Comments

Turkey’s failed coup creates an unlikely winner: Islamic banking

As the Turkish people pick up the pieces following the attempted military takeover of their government on June 15, speculation about the country’s economic future is rampant. From a slump in capital and credit markets to a downgrade in the country’s sovereign credit rating, many pundits are bearish about the long-term prospects for the republic. At least one sector, however, is standing strong after the coup attempt: Islamic banking. As a dual financial system that practices both conventional and Islamic finance, Turkey was introduced to Islamic lenders (or “participation banks,” as they’re known there) at the end of 1980s, and the sector grew rapidly by the beginning of the 2000s. In 2005, the Islamist-oriented government officially recognized them and offered state guarantees on deposits, attracting interest from religious depositors and nearly doubling the industry’s market share by 2013. Growth over the last few years has also been compelling. The Participation Banks Association of Turkey reveals that total assets in five Turkish Islamic lenders grew to 120.3 billion Turkish lira ($33.6 billion) in 2015, an increase of more than 15% from the previous year. And there is more room for expansion, considering the size of Islamic lenders as compared to the

July 27, 2016 No Comments

Azzad Hosts Leader in Turkish Finance

(Falls Church, Virginia, 5/6/13) – Azzad Asset Management recently hosted Dr. Mehmet Yesilyaprak of Turkiye Finans Bank at its headquarters in suburban Washington, D.C. Yesilyaprak gave the Azzad staff an update on the banking sector in Turkey and met afterwards with Azzad management to discuss areas of future collaboration. The Azzad Wise Capital Fund (NASDAQ: WISEX), America’s first halal fixed-income mutual fund, invests in deposits and notes from Turkiye Finans Bank, among other Islamic banks that comply with specific socially responsible and halal financial guidelines. The Fund also invests in sukuk, or asset-backed Islamic bonds. As of March 31, 2013, deposits from Turkiye Finans Bank represented approximately 13% of the Fund’s holdings. Welcoming Dr. Yesilyaprak to Azzad, Portfolio Manager Jamal Elbarmil noted the positive impact that Turkish participation (Islamic) banks have on social institutions and small business owners. “Profit and loss sharing accounts are returned to the real sector through investment in land, mortgages and microfinance,” he said. “All parties share in the risk and reward of such endeavors.” In a recent shareholder letter, Elbarmil highlighted the contribution of Turkey’s Islamic banking sector to the Azzad Wise Capital Fund’s first quarter results, stating that exposure to bank deposits from the

May 6, 2013 No Comments