Alberto Brugnoni - Assaif Presentation within the conference "Halal Food - a border that does not divide", organized by LINK2007 in collaboration with the Italian Directorate-General of the Italian Ministry of Foreign Affairs and International Cooperation and Assaif. Milan, October 23rd 2015

1. Alberto Brugnoni
Managing Partner
ASSAIF

2. THE DIGITAL ECONOMY BREAKDOWN
THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 2
An overview by:
Alberto G Brugnoni
Managing Partner ASSAIF
October - 2015

4. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 4
Further growth can be seen by the fact that new markets are
very much in abundance around the world
the potential core Islamic Banking
to be 1.27% of global banking in
2014.

5. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 5
A $1.8 trillion existing Islamic finance market and $1.35
Islamic Banking (assets, 2014)

6. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 6
Malaysia, Bahrain, and United Arab Emirates maintain the
leadership in the Islamic Finance indicator
Several African countries are launching debut sovereign Sukuk &
Islamic banking windows. East Asian countries are adapting their
regulatory frameworks for Islamic Finance. Central Asian
such as Kazakhstan &Azerbaijan and European banks in Russia
&Germany are also tying up with Islamic finance

7. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 7
Top 10 Countries in Islamic Finance

8. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 8
Key Market Players in Islamic Finance Sector

9. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 9
The issue of OIC countries being more vulnerable due to national structure
imbalances and regional political risk. Unemployment remains particularly
high in Northern Africa and Western Asia. The issue of low oil prices and the
potential of US interest rates impacting the interest rates of OIC countries

10. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 10
ASSAIF - Funding Halal Economy through Islamic Finance
The Islamic finance industry offers a comprehensive products ecosystem that
serves to address the financial needs of various types of clientele.
The world halal industry is a globalised and cross-border business sector. As
such, halal firms are heavily involved in international trade, particularly those
operating out of non-OIC countries and who export to cater to the markets
which are home to large Muslim population. In this process, halal firms are in
critical need of three financing lines:
1. Trade financing to support international trading activities;
2. Risk management products to hedge international exposures;
3. Working capital to help with the raw materials and other processing
expenditures.

11. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 11
ASSAIF - Common Islamic Trade Finance Products (1)
Import Financing Export Financing
Documentary Credit Inward Letter of Credit
Wakalah Islamic Factoring
Murabahah Islamic Bankers Acceptance
Musharakah Islamic Export Credit Re-financing
(preshipment)
Murabahah Working Captial Islamic Export Credit Re-financing
(postshipment)
Islamic Bankers Acceptance Accepted Bills-i
Foreign Inward Bills for collection (FIBC-i) Foreign Onward Bills for Collection-i
Domestic Inward Bills for collection (DIBC-i) Domestic Onward Bills for collection-i
Debt Trading Working Capital Financing

12. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 12
ASSAIF - Common Islamic Trade Finance Products (2)
USD 4tln worth of trade financing products are utilised to support trade just
between the OIC countries (intra-OIC); however the value of global Shariah-
compliant trade financing solutions is a mere USD250bln
Cash-flow tools known as factoring and reverse factoring:
Factoring is a short-term cash-flow solution in which a business sells its
accounts receivable for a nominal fee
Reverse-factoring entails the extension of payment terms of buying corporates
to match them with their receivables

13. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 13
ASSAIF - Funding Capital and Refinancing Needs
Here, sukuk is playing a crucial role as a financing tool utilised by large and
medium-sized firms in the halal industry to finance their general corporate
purposes, specific project financing, investment programmes and debt
refinancing.
The sukuk market has been penetrated by halal industry players from different
operating backgrounds ranging from:
food manufacturing
processing,
finance and insurance

14. THE STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2015/16 14
ASSAIF – Institutional Players
The International Islamic Trade Finance Corporation (ITFC) is an
autonomous entity within the Islamic Development Bank Group:
• Shariah-compliant trade finance using the following modes of financing:
Murabaha, Installment Sale, Istisna'a
• Structured Trade Finance (STF) using off-balance-sheet collateral
The Islamic Corporation for the Insurance of Investment and Export Credit
(ICIEC) provides investment and export credit insurance:
• Trade Credit Insurance Program
• Foreign Investment Insurance Program
• Reinsurance Program