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Takaful for

Microfinance

1st International Conference on

Inclusive Islamic Financial Sector

Development

Overview of presentation

 Insurance and Poverty Alleviation

 Challenges providing microinsurance

 Opportunities and need for microtakaful

 Microtakaful in practice

Can insurance assist poverty

alleviation?

 The poor are the most vulnerable

 The impact of losses are more severe

 They have minimum means of recovery

 Success of microfinance schemes show

the poor can and want to save

 Savings and credit are used

unproductively

 The poor need a safety net to escape

poverty

“Insurance is now

recognized as an

important tool for

poverty alleviation”

Microinsurance products

 Loan protection

 Disability and Sickness

 Savings

 Health

 Funeral

 Property

 Agriculture

Providing microinsurance

The challenges

 Coverage

 Regulation

 Moral hazard and Fraud

 Adverse selection

 Education and trust

 Technical expertise

 Affordability

 Retention

 Sustainability

 Penetration

Key success factors for

introducing microinsurance

 Organized group

 Existing financial infrastructure

 Trust

 Need

 Understanding

 External support

Providing microinsurance

The possibilities

 The cooperative microinsurance model

 History of organising the poor

 Operate for the interest of members by

members

 Trust

 Ownership and loyalty

 Peer pressure

 Surplus reinvested or redistributed

Providing microinsurance

The possibilities

 The partner agent model

 No-risk fee for microinsurance provider

 Better coverage for policyholder

 Access to new market

 Pooling of risks between informal and formal

sector

Providing microinsurance

The possibilities

 The donor agent model

 Access to expertise

 Financial sustainability

 Guiding hand

Opportunities and need

for microtakaful

Principles of Takaful

 Solidarity and joint guarantee

 Self reliance and self sustaining for community

well being

 Assist those that need assistance

 Community pooling system

 Shari’ah approved investments and products

“Bear ye one another’s burden”

The Global Takaful sector

 1979 First Takaful Company established

 1996 – 30 Institutions transacting Takaful

 2002 – 50 Takaful operators and four Retakaful

providers

 2004 – 80 Takaful operators, 200 Takaful windows

and 12 Retakaful providers

Source: IBB Solicitors, UK – (2005)

The need for microtakaful

 Social services inadequate or unavailable

 Large sectors of poverty in many Muslim

countries

 Over half of world’s lowest developed countries

have a majority Muslim population

 Increasing inequality in Middle East and Gulf

countries

 Religious considerations are important in villages

and small communities

 Established Takaful sector neglecting low

income sector

“Takaful is the

second most

important social

institution to

counter poverty

and deprivation”

Omar Fischer

1999

Possibilities for microtakaful

 Establish community based microtakaful

schemes

 Involvement of NGOs, zakat funds, donor

agencies

 Support from Takaful sector

 Technical expertise

 Financial assistance

 Partner-agent model

Microtakaful in practice

 Agricultural Mutual Fund - Lebanon

 Amana Takaful – Sri Lanka

 Takaful Ikhlas

 Takmin - Indonesia

Summary

 Microtakaful can succeed

 Microtakaful can compliment microfinance

 Microtakaful is imperative to ensure productive

use of assets for the poor.

 It is key to ensuring the long-term self

sustainability of the individual and his family to

stay above the poverty line.

 Existing Takaful operators have a responsibility

to take a lead in this area in accordance with

the basic principles and philosophy of takaful

which is to “bear one another’s burden”.

The case of a microtakaful

policyholder

 Ibu Iwit, 50 years, farmworker, earning

one dollar a day.

 Took out a 6 month loan of 55 USD from

local Baitul mal Wat Tamwil

 Insurance premium was taken out with

Takmin at 0.16 USD

 Ibu Iwit passed away a couple months

later

 Her husband, Amad, age 60 years, no

income

A Global reach for

local strength

Thank you

www.takaful.coop

← Older revision		Revision as of 04:52, 10 November 2017
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−	[~~http~~://45.40.~~136.134~~/~~~hodhood~~/HodHoodDocuments/IslamicFinance/Takaful/Takaful%20Concepts%20and%20Models%20by%20Atiquzzafar%20Khan.pdf Read the Full Document]	+	[https://www.hodhood.com/en/HodHoodDocuments/IslamicFinance/Takaful/Takaful%20Concepts%20and%20Models%20by%20Atiquzzafar%20Khan.pdf Read the Full Document]

← Older revision	Revision as of 02:32, 21 September 2016
Line 1:	Line 1:

	+
	+
	+	== Top 20 FREQUENT WORDS ==
	+	takaful 79
	+	insurance 30
	+	waqf 27
	+	islamic 21
	+	fund 17
	+	participant 16
	+	contract 13
	+	profit 13
	+	surplus 11
	+	business 10
	+	investment 10
	+	model 9
	+	operational 9
	+	participants 9
	+	based 7
	+	shareholders 7
	+	expenses 6
	+	loss 6
	+	products 6
	+	account 5
	+	countries 5
	+	financial 5
	+	management 5
	+	muslim 5
	+	payment 5
	+	profits 5
	+	psa 5
	+	risk 5
	+
	+
	+
	+	== DOCUMENT KEY POINTS ==
	+	*all human activities are subject to risk which may lead to financial or physical losses to him
	+	*risk and insurance risk and uncertainty are fundamental facts of life
	+
	+	*a those who accept the concept of insurance but find prohibited elements in its present practice
	+	*shariah position of insurance opinion of shariah scholars is divided on insurance
	+
	+	*a council of grand ulama of saudi arabia a majlis tahqiqat e shari yah lucknow india a islamic fiqh academy of rabita alaa lam e islami a al majma al fiqhi alislami of oic a council of islamic ideology pakistan
	+	*rulings of collective fiqhi bodies about insurance a islamic research institute of al azhar uni
	+
	+	*islamic substitute i the islamic substitute of conventional insurance according to these fiqhi bodies may be some scheme based on mutual cooperation and joint responsibility
	+	*i that alternative is introduced under the title of takaful in recent past
	+
	+	*takaful pioneers i takaful started some years ago in the middle east with the launching of two companies in a the islamic arab insurance co
	+	*of sudan i but it took some time for the movement to take shape
	+
	+	*i this was instrumental in the successful launching of the takaful movement in malaysia and in other countries of south east asia
	+	*takaful pioneers i later in malaysia played a pioneering role in setting the first legal framework specific to takaful takaful act malaysia
	+
	+	*other islamic takaful legislations i other markets such as the sudan and iran have islamic regulatory environments and became naturally takaful markets
	+	*i in the gulf countries specific takaful legislations are coming through in bahrain and in saudi arabia
	+
	+	*takaful drivers i islamic banks and financial institutions play a strategic and important role in the distribution of takaful products especially life takaful products
	+	*i just as bancassurance played an important role in the distribution of personal lines insurance products bancatakaful is an important driver for takaful
	+
	+	*on average i world takaful contributions are conservatively estimated at around us billions of which a general takaful a family takaful
	+	*takaful premium i takaful is one of the fastest growing segments in insurance at around pa
	+
	+	*the members of the group agree to guarantee jointly that should any of them suffer a catastrophe or disaster he would receive certain sum of money to meet the loss or damage
	+	*in a practical sense takaful can be visualized as a method of joint guarantee among a group of members or participants against loss or damage that may inflict upon any of them
	+
	+	*working of the takaful business the malaysian case i takaful business is based on the concepts of mudarabah and tabarru
	+	*i in family takaful each takaful installment is divided and credited into two separate accounts namely the participants account pa and the participants special account psa
	+
	+	*expenses takaful contract investment profit based on mudarabah pa pa payment from pa participant ftf payment from psa psa psa
	+	*mudarabah model profit attributed family takaful to shareholders company company s admin manag
	+
	+	*payment of claims should the participant die or suffer permanent and total disability in the fifth year of participation takaful benefit will be paid in the following manner i i
	+	*from participant s account rm rm x profit if any say rm i ii
	+
	+	*in case the partcipant survived should the participant survive until the maturity of his ftp payment of takaful benefit will be made to him as follows i
	+	*from his participant s account rm rm x profit from investment rm ii
	+
	+	*i in technical meaning waqf means to allocate or donate some property or cash for a specific purpose to get pleasure of allah and not to let it go through consumption or sale
	+	*i the waqf property comes into ownership of allah swt and waqif will have no property rights on it
	+
	+	*i waqf may be general purpose or specific purpose like waqf a ala al aulad or waqf a ala al aqarib
	+	*i waqif has right to set the rules for waqf and manage the waqf
	+
	+	*i the objectives of the waqf fund would be to provide relief to participants against defined losses as per the rules of the waqf fund
	+	*i the donation can be of any reasonable amount shariah board may specify such an amount
	+
	+	*the operator is the wakeel of the waqf fund and the participants pay one sided donation to the waqf fund not conditional which also eliminates the issue of gharar
	+	*the waqf fund rules may define the sharing of surplus and other rules under which it would operate but there is no obligation to distribute surplus
	+
	+	*i a two digit growth in the range of to can be reasonably sustained for at least the next years in the existing markets far and middle east
	+	*billions of which around are based in asia and africa
	+
	+	*conclusions i despite the challenges facing this new industry exciting times are ahead once the latent potential is unleashed
	+	*i the success of takaful largely depends on that of islamic financial institutions on a global basis
	+
	+
	+	''Please note, This is an auto generated summary based on sentances position in the document and other factors''
	+	== DOCUMENT WORD ANALYSIS ==
	+	=== Main Category ===
	+	: AlHuda Material\takaful
	+
	+
	+	=== KeyWords ===
	+	taka islam insur malaysia productdeferred shariah countries muslim financial retakaful model growth custom partner developed service mutual bankable provided scheme
	+
	+
	+
	+	== RELATED DOCUMENTS ==
	+	:[[A Review of Takaful by Prof. Khawaja Ahmed Saeed]]
	+	:[[Agency Management,Training and Incentive Programme]]
	+	:[[Audit Issue of Islamic Banking]]
	+	:[[Banca Takaful by Faisal Shahzad Abbassi]]
	+	:[[Best Practices from e- Insurance to e-Takaful by Sami Guello]]
	+	:[[Calculated Risks, Measurable Results]]
	+	:[[Challenges & Issues Faced by Takaful Industry by Mr. Imtiaz ]]
	+	:[[Co-Operative Insurance and Takaful]]
	+	:[[Current Achievements of Takaful by Dr. S. J Malaikah]]
	+	:[[International Cooperative & Mutual Insurance Federation]]
	+	:[[Islamic Banking And Finance Malaysia’s Experience And Achiev]]
	+	:[[Islamic Finance & Investment Symposium by Sohail Jaffar]]
	+	:[[Islamic Insurance in 21st Century by Ahmad Feizal]]
	+	:[[Islamic Insurance Opertunities and Challenges]]
	+	:[[Issues and Challenges in Retakaful by Azman Ismail]]
	+	:[[Leveraging BancaTakaful as a Key Growth Channel by Mr. Rohai]]
	+	:[[Life Family Takaful by Mr. P Ahmed]]
	+	:[[Micro Insurance Co-Operative and Takaful]]
	+	:[[Micro Takaful by Shabir Patal]]
	+	:[[Microinsurance and Takaful]]
	+	:[[Microinsurance, cooperatives and Takaful]]
	+	:[[MicroTakaful – the way forward by Capt. M. Jamil Akhtar]]
	+	:[[Opertunities in Islamic Insurance]]
	+	:[[Present Scenario and Future Potentials of Takaful by Kazi Md]]
	+	:[[ReTakaful by Rohail Ali Khan]]
	+	:[[Syariah Compliant General Takaful Products by Sami Guellouz]]
	+	:[[Takaful and Mutuality by Mohd. Masua Billah]]
	+	:[[Takaful by Abdul Rahim]]
	+	:[[Takaful for Microfinance]]
	+	:[[Takaful Opperunities and Challenges By Azeem Pirani]]
	+	:[[Takaful Products Family Takaful Linked Investment Plans by S]]
	+	:[[Takaful World Prospective Middle East & North Africa]]
	+	:[[Takaful]]
	+	:[[Takful - Zubair Mughal]]
	+	:[[Takful Report]]
	+	:[[The Islamic Vision Presentation]]
	+	:[[The Success of Retakaful by Farid Benbouzid]]
	+
	+
	+
	+	== DOCUMENT REFERENCES ==
	+
	+
	+	=== Number of Pages ===
	+	46
	+
	+
	+	=== Published Date ===
	+	2016-09-17 01:20:24
	+
	+
	+	== Full Document ==
	+
	+
	+	[http://45.40.136.134/~hodhood/HodHoodDocuments/IslamicFinance/Takaful/Takaful%20Concepts%20and%20Models%20by%20Atiquzzafar%20Khan.pdf Read the Full Document]
	+
	+
	+	[[Category:Islamic Finance]]
	+
	+	[[Category: Takaful]]

← Older revision		Revision as of 00:41, 21 September 2016
Line 1:		Line 1:
−	~~Takaful for~~
−	~~Microfinance~~
−	~~1st International Conference on~~
−	~~Inclusive Islamic Financial Sector~~
−	~~Development~~

−	~~Overview of presentation~~
−	~~ Insurance and Poverty Alleviation~~
−	~~ Challenges providing microinsurance~~
−	~~ Opportunities and need for microtakaful~~
−	~~ Microtakaful in practice~~
−
−	~~Can insurance assist poverty~~
−	~~alleviation?~~
−	~~ The poor are the most vulnerable~~
−	~~ The impact of losses are more severe~~
−	~~ They have minimum means of recovery~~
−	~~ Success of microfinance schemes show~~
−	~~the poor can and want to save~~
−	~~ Savings and credit are used~~
−	~~unproductively~~
−	~~ The poor need a safety net to escape~~
−	~~poverty~~
−
−	~~“Insurance is now~~
−	~~recognized as an~~
−	~~important tool for~~
−	~~poverty alleviation”~~
−
−	~~Microinsurance products~~
−	~~ Loan protection~~
−	~~ Disability and Sickness~~
−	~~ Savings~~
−	~~ Health~~
−	~~ Funeral~~
−	~~ Property~~
−	~~ Agriculture~~
−
−	~~Providing microinsurance~~
−	~~The challenges~~
−	~~ Coverage~~
−	~~ Regulation~~
−	~~ Moral hazard and Fraud~~
−	~~ Adverse selection~~
−	~~ Education and trust~~
−	~~ Technical expertise~~
−	~~ Affordability~~
−	~~ Retention~~
−	~~ Sustainability~~
−	~~ Penetration~~
−
−	~~Key success factors for~~
−	~~introducing microinsurance~~
−	~~ Organized group~~
−	~~ Existing financial infrastructure~~
−	~~ Trust~~
−	~~ Need~~
−	~~ Understanding~~
−	~~ External support~~
−
−	~~Providing microinsurance~~
−	~~The possibilities~~
−	~~ The cooperative microinsurance model~~
−	~~ History of organising the poor~~
−	~~ Operate for the interest of members by~~
−	~~members~~
−	~~ Trust~~
−	~~ Ownership and loyalty~~
−	~~ Peer pressure~~
−	~~ Surplus reinvested or redistributed~~
−
−	~~Providing microinsurance~~
−	~~The possibilities~~
−	~~ The partner agent model~~
−	~~ No-risk fee for microinsurance provider~~
−	~~ Better coverage for policyholder~~
−	~~ Access to new market~~
−	~~ Pooling of risks between informal and formal~~
−	~~sector~~
−
−	~~Providing microinsurance~~
−	~~The possibilities~~
−	~~ The donor agent model~~
−	~~ Access to expertise~~
−	~~ Financial sustainability~~
−	~~ Guiding hand~~
−
−	~~Opportunities and need~~
−	~~for microtakaful~~
−
−	~~Principles of Takaful~~
−	~~ Solidarity and joint guarantee~~
−	~~ Self reliance and self sustaining for community~~
−	~~well being~~
−	~~ Assist those that need assistance~~
−	~~ Community pooling system~~
−	~~ Shari’ah approved investments and products~~
−	~~“Bear ye one another’s burden”~~
−
−	~~The Global Takaful sector~~
−	~~ 1979 First Takaful Company established~~
−	~~ 1996 – 30 Institutions transacting Takaful~~
−	~~ 2002 – 50 Takaful operators and four Retakaful~~
−	~~providers~~
−	~~ 2004 – 80 Takaful operators, 200 Takaful windows~~
−	~~and 12 Retakaful providers~~
−	~~Source: IBB Solicitors, UK – (2005)~~
−
−	~~The need for microtakaful~~
−	~~ Social services inadequate or unavailable~~
−	~~ Large sectors of poverty in many Muslim~~
−	~~countries~~
−	~~ Over half of world’s lowest developed countries~~
−	~~have a majority Muslim population~~
−	~~ Increasing inequality in Middle East and Gulf~~
−	~~countries~~
−	~~ Religious considerations are important in villages~~
−	~~and small communities~~
−	~~ Established Takaful sector neglecting low~~
−	~~income sector~~
−
−	~~“Takaful is the~~
−	~~second most~~
−	~~important social~~
−	~~institution to~~
−	~~counter poverty~~
−	~~and deprivation”~~
−	~~Omar Fischer~~
−	~~1999~~
−
−	~~Possibilities for microtakaful~~
−	~~ Establish community based microtakaful~~
−	~~schemes~~
−	~~ Involvement of NGOs, zakat funds, donor~~
−	~~agencies~~
−	~~ Support from Takaful sector~~
−	~~ Technical expertise~~
−	~~ Financial assistance~~
−	~~ Partner-agent model~~
−
−	~~Microtakaful in practice~~
−	~~ Agricultural Mutual Fund - Lebanon~~
−	~~ Amana Takaful – Sri Lanka~~
−	~~ Takaful Ikhlas~~
−	~~ Takmin - Indonesia~~
−
−	~~Summary~~
−	~~ Microtakaful can succeed~~
−	~~ Microtakaful can compliment microfinance~~
−	~~ Microtakaful is imperative to ensure productive~~
−	~~use of assets for the poor.~~
−	~~ It is key to ensuring the long-term self~~
−	~~sustainability of the individual and his family to~~
−	~~stay above the poverty line.~~
−	~~ Existing Takaful operators have a responsibility~~
−	~~to take a lead in this area in accordance with~~
−	~~the basic principles and philosophy of takaful~~
−	~~which is to “bear one another’s burden”.~~
−
−	~~The case of a microtakaful~~
−	~~policyholder~~
−	~~ Ibu Iwit, 50 years, farmworker, earning~~
−	~~one dollar a day.~~
−	~~ Took out a 6 month loan of 55 USD from~~
−	~~local Baitul mal Wat Tamwil~~
−	~~ Insurance premium was taken out with~~
−	~~Takmin at 0.16 USD~~
−	~~ Ibu Iwit passed away a couple months~~
−	~~later~~
−	~~ Her husband, Amad, age 60 years, no~~
−	~~income~~
−
−	~~A Global reach for~~
−	~~local strength~~
−	~~Thank you~~
−	~~www.takaful.coop~~