Two Takes on Islamic Finance

Amjid Ali is one of many entrepreneurs coming to the Presidential Summit on Entrepreneurship April 26-27, from countries with sizeable Muslim populations. Ali, senior manager at HSBC Amanah Global in Bristol, U.K., began his career in retail and small-business banking and now focuses on Islamic finance offerings for the HSBC Amanah central team based in Dubai.

Dr. Yahia Abdul-Rahman, based in California, is a Shari’aa supervisor and founder of LARIBA System, an Islamic financing method. He also wrote a book called The Art of Islamic Banking and Financing.

Amjid Ali

Amjid Ali

Amjid Ali:
The emergence of Islamic banking has been one of the most important trends in the financial world, serving the more than 1.5 billion Muslims, or 1 in 5 of the global population.

HSBC Amanah’s establishment in 1998 was a response to the burgeoning and genuine need for financial services that comply more closely with Muslims’ religious convictions and conform to the tenets of the Shariah (Islamic law). Muslims are now increasingly able to participate in the financial world without an economic penalty.

The critical test for any Islamic financial institution is the assurance that its products and transactions comply with Shariah. We established at an early stage an independent board of Shariah advisors from the most respected academic establishments with real commercial experience.

By providing the highest quality Islamic financial solutions, maintaining high ethical standards in our business relationships and investing in the future of our communities, we are committed to improving the lives of our Muslim customers worldwide.

For me personally, this development goes beyond product features. I recognize success depends on our ability to deliver in a way that demonstrates respect and understanding of the cultural differences, and of the importance of Islam, in the daily life of a Muslim.

The defining features of Islamic finance include the prohibition of interest, parameters for ethical investment and equitable relationship between contracting parties and the financing of goods and services to benefit the real economy. For instance, in a home financing, the bank would buy the property jointly with the customer. The property is held in trust by a third party. As the customer makes monthly payments during the term of the finance, his share in the property will increase as the bank’s share decreases. The bank makes a return by charging rent on the portion the customer does not own.

See also an Amjid Ali’s profile.

Yahia Abdul-Rahman

Yahia Abdul-Rahman

Yahia Abdul-Rahman:
The American Muslim community started a grassroots effort relying only on their money to present Islamic banking in an inclusive way to people of all faiths in America. We developed the following strategic goals:

1. Change the name from the old “Interest-Free” to “Riba-Free.” This goal was accomplished. It took us almost 10 years.

2. Change the name from “Islamic Banking,” which may be exclusive to other faiths and give the wrong impression that this brand of banking is for Muslims only. We are promoting Community RF Banking. R stands for Ribit (Old Testament) and Riba (Qur’aan), while F stands for Free. We estimate that it will take us another 8 years to achieve that goal. We want to educate the public about the roots of interest/ usury prohibition in the Jewish Bible (Torah), the Christian Bible and the Qur’aan.

But we have already started that education process, with a pilot financing method called Lariba, in order to gain a track record for successful Islamic – RF – financing. (John Wiley published a book about the method called The Art of Islamic Banking and Financing.)

Today, we can offer all Americans the fruits of our 27 years of dedicated hard work of American Muslims who invested all they own to bring to bear the RF Banking System, a faith-based, socially responsible and ethical brand of banking.

From Kenya to California, Empowering Women

Rehema D. Jaldesa is one of many entrepreneurs coming to the Presidential Summit on Entrepreneurship April 26-27, from countries with sizeable Muslim populations. She owns three companies in the construction, telecommunications and distribution sectors in Kenya, and she chairs a nonprofit for the empowerment of rural women.

Linda Rottenberg is chief executive of Endeavor, a nonprofit that identifies and supports high-impact entrepreneurs in emerging markets.

Anita Dharapuram is interim director of C.E.O. Women, a nonprofit that creates economic opportunities for low-income immigrant and refugee women in California.

Rehema D. Jaldesa

Rehema D. Jaldesa

Rehema D. Jaldesa:
Every day brings a new challenge, an interesting opportunity or an exciting enterprise for me. One of the most important projects my companies have worked on was drilling boreholes for water exploration in the arid lands of Northern Kenya. Running my companies is rewarding as they have a strong culture of corporate responsibility. Inspiring women with an entrepreneurial spirit is a major element of that culture.

In fact, my life revolves around placing women in control of economic matters, thereby giving them more power on issues that matter to the entire society. This vision comes from the examples of people like Melinda Gates and Dr. Yunus Muhammad, who have improved lives of people around the world.

I have mentored women from marginalized communities for years. I encourage them to discover business opportunities that will drive them toward self reliance and economic empowerment. I often subcontract work to women or companies associated with women, encourage women to participate in the tendering process by lending them my company’s equipment, and act as a loan guarantor for women running small businesses. I particularly care about the empowerment of rural and nomadic women as they face the most difficult obstacles.

I begin my day by searching newspapers for work-project advertisements (tenders for work to be done) by government agencies and private entities. Next, I call my field workers and engineers to learn what they are doing, and then discuss operational matters with other staff. The rest of the day is for meeting prospective clients and following leads to attract new ones. In between, I must find time to work on new business ideas. I plan to expand my business, taking advantage of the trade links created by the East African Community and the Common Market for Eastern and Southern Africa to export goods and services to the Horn of Africa and Central Africa.

Linda Rottenberg

Linda Rottenberg

Linda Rottenberg:
Rehema is an excellent example of an entrepreneur with high-impact potential—someone with big ideas and a scalable business, who creates opportunities for others and serves as a role model for success.

When it comes to supporting women entrepreneurs in emerging markets, too often we think of microfinance. Indeed, microloans have played an important role helping lift people out of poverty. But Rehema is thinking bigger. She recognizes that to achieve true economic empowerment and social mobility, women entrepreneurs need to build scalable businesses and this in turns requires structured mentoring and access to role models.

For over a decade, my own organization Endeavor has been connecting entrepreneurs in emerging markets (with Kenya on the near horizon!) to successful local business leaders, who serve as mentors. Too often in emerging markets, wealth and opportunities are controlled by few top families and powerful interests, resulting in networks closed off to new entrepreneurs. Innovators like Rehema (an excellent example of an entrepreneur who is also a mentor) are dismantling this tradition, building bridges between the business community and the next generation of entrepreneurs. When entrepreneurs achieve high impact, everyone wins. In addition to creating jobs and wealth locally, an investor community takes root and young people are inspired to think big.

The point is clear: to reduce inequality and ensure shared economic growth, women entrepreneurs must be empowered to take their small businesses and scale them into successful, high-growth companies. They must become High-Impact Entrepreneurs.

Anita Dharapuram

Anita Dharapuram

Anita Dharapuram:
We increasingly see the roles of women changing across the globe, in some places for the better, in others for the worse. It is in the best interest of us all to foment a positive change.

I am inspired to see women such as Ms. Jaldesa making an extra effort to empower women through entrepreneurship. By embracing social entrepreneurship as second nature, Ms. Jaldesa can provide access to economic opportunities to many women business owners who otherwise might have had none.

At C.E.O. Women (Creating Economic Opportunities for Women), we, too, create economic opportunities for underprivileged women, in our case, low-income immigrants and refugees to the U.S. We teach them English and communication and entrepreneurial skills, so they can establish successful livelihoods. They also can count on mentoring, coaching and access to capital when they are ready to start small businesses. C.E.O. Women believes that all women who come to the United States have unique skills and intellectual assets, which, with the right support, can be used to improve their lives.

I believe that every woman in Kenya also is unique in this sense. Similar to women I work with in the United States, many Kenyan women may simply need tools to navigate the local educational and legal systems to be successful.

Most of our graduates register increases in their incomes and participate more actively in their communities. Some become the pillars of their families and communities similar to those whom Ms. Jaldesa mentors and supports. That’s why it is so important to invest in the advancement of women around the world. Without doing so, we often deny entire communities a chance of development.

Too Much Democracy?

When a Philadelphia crowd gathered outside the 1787 Constitutional Convention asked Benjamin Franklin what kind of government the delegates had arrived at, his answer was “a republic, if you can keep it.” Significantly, Franklin did not use the word democracy.

The founders wanted a balanced regime. Of the legislative, executive and judicial branches, the voting public would directly choose only the House of Representatives, that is to say one-half of one-third of the national government. Subsequent years have witnessed constitutional amendments extending popular voting to the Senate and, mediated through the Electoral College, to the Presidency.

As our federal system permits, each of the fifty states has settled upon its own constitutional arrangements, and each thus addresses the question faced by the founders, and by subsequent generations of Americans: How Much Democracy?

The California State FlagMore perhaps than any other state, California’s answer has been “Bring it on!” Californians can call for new laws by “initiative” and pass them by referendum. Unlike other states that employ these procedures, California’s legislature cannot override the results. It instead remains busy trying to muster the two-thirds majority required to adopt a state budget. By one count, the poor, tortured California constitution has been amended or revised over 500 times, and is several times longer than its federal counterpart.

And today California is broke. One problem: even as Californians vote themselves tax reductions, they also pass new laws requiring larger expenditures—from appropriations for stem-cell research to costly “three-strike” laws mandating long and expensive prison terms for non-violent offenses. Some now argue for a new state constitutional convention, one that might, among other reforms, temper the state’s experiment with direct democracy.

Hence my question: does California have too much democracy?