First-ever US halal trade finance outlet launches

Washington, DC asset management firm marks America first in the field of Islamic finance

A Virginia firm has launched the first-ever, US-based halal trade-finance outlet. Unveiled on 23 February by Azzad Asset Management, the fund will provide a resource of ethical investment for social projects in the developing world.

Dubbed the Azzad Wise Capital Fund, the new venture will invest primarily in community-development banks and sukuk to spur a host of initiatives designed to alleviate poverty.

Its work will be overseen by the International Islamic Trade Finance Corporation (ITFC) – a branch of the Islamic Development Bank Group dedicated to improving access to trade finance deals free of interest rates and fraud. The ITFC’s funding models are instead based on profit and loss sharing.

Recent World Bank figures show that, in the three decades between 1981 and 2011, the percentage of people in the developing world living on less than $2 per day fell from 70% to 36%. However, the estimated value of unmet demand for trade finance is between $110bn and $120bn in Africa and more than $1 trillion in Asia.

Azzad Asset Management vice president and portfolio manager Jamal Elbarmil said: “A lack of reasonable trade financing results in huge missed opportunities to leverage the power of trade for growth and development. Providing affordable trade finance can unlock the trading potential of millions of individuals and small businesses in underserved parts of Asia and Africa.

“In line with our mission to use investment capital to promote a sustainable economy, we are pleased to participate in this process.”

Based just outside Washington, DC, Elbarmil’s firm is a member of the Forum for Sustainable and Responsible Investment and the Accounting and Auditing Organization for Islamic Financial Institutions.

In related news, the ITFC has also signed a $75m trade finance deal with the government of Senegal to back its current groundnut campaign – a cultivation and harvesting phase that will be critical for driving the nation's groundnut oil and animal feed economies.

A previous ITFC deal provided Senegal with a $30m facility for its 2013/2014 groundnut season. The new finance will support the Senegal government’s efforts to grow an estimated one million groundnuts and process them oil and feed for export to foreign markets.

His Excellency Amadou Ba – Senegal minister of Economy, Finance and Planning – said: “Under the Senegal Emerging Plan, the country is positioning itself as a trade hub in West Africa, and ITFC’s support is important to help realise this plan.”

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