Investments in new takafuls
ICMIF is assisting developing takaful companies who are seeking capital by putting them in contact with established takafuls searching investments. There are currently project proposals in Bosnia and Russia being circulated to potential investors.
Bosnia
According to estimated current population of 3.7 million, it can be said that there are around 1.5 millions Muslims in Bosnia and Herzegovina, a good indicator for a potential market. Even though Muslims in Bosnia and Herzegovina are organised though Islamic community, they do not have any financing institutions which will invest, save and lend their money. In short, Muslims are in great need of having Islamic finance and insurance.
This proposal provides background information on the legal and economic environment in Bosnia and Herzegivina. Organisations or individuals wishing to support this project should either directly contact Enver Avdic or Sabbir Patel.
Russia
The Russian Federation has over 25 million Muslims and currently no Takaful operators. The project to establish the first takaful in Russia has been initiated by a team of specialists who have experience in the management and organisation of insurance companies since 1992. The first steps of realising the project were made in January 2004 and support has been obtained from the Muslim public organisations and Mulsim religious leaders. The project leader is Dr Renat I. Bekkin who is an Islamic insurance expert from the Moscow State Institute of International Relations. His paper identifies the issues in establishing a takaful company in Russia incorporating the results of surveys undertaken in St. Petersburg and Kazan (Republic of Tatarstan).
Potential new market for cooperative and mutual insurers
The following ruling by the European Council for Fatwa and Research directs Muslims to purchase their statutory insurance requirements from cooperatives and mutuals when no Islamic Insurance (takaful) schemes exist in the country.
“Commercial insurance is originally haram as agreed upon by most contemporary scholars. It is well known that in most non-Islamic countries there are cooperative and mutual insurance companies. There is no harm from the Shari'ah point of view to participate in these services. So, it is unlawful for a Muslim living in a country where there is such a cooperative insurance company to make an agreement with a commercial insurance company. But, if a cooperative insurance company is not found one may enter into a contract with a commercial insurance company only by way of necessity. If a person is forced by law to insurance or by way of need, it is obligatory for him to be content with the minimum proportion of insurance that covers his need or to the minimum of such transaction he’s being forced to carry out.”
There are still no Takaful operators in many ICMIF member countries some of which have large and fast growing Muslim populations.
| Country | Est. Muslim population (2004) | Country | Est. Muslim population (2004) |
|---|---|---|---|
| Argentina | 800,000 | Italy | 600,000 |
| Brazil | 1 million | Japan | 1.3 million |
| Canada | 500,000 | Kenya | 8.4 million |
| France | 4.8 million | Netherlands | 1 million |
| Germany | 3 million | UK | 2 million |
The ruling by the European Council provides a platform for cooperative and mutual insurers to begin collaborating with their local Muslim communities and be the first to satisfy the insurance needs of this niche market. Already one member of ICMIF, Folksam from Sweden, has commenced building a cooperation with the Swedish Muslim Council to promote its products to the Muslim community using this ruling.
The enclosed paper provides information on the takaful concept and outlines the considerations that need to be made if a member decided to provide these products to the Muslim population in their own country. For more information contact Sabbir Patel.
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