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Case Study Of:

Al Barakah Multi-purpose Co-operative society Limited

Mr. Mamode Raffick Nabee

Al Barakah MCSL
4th International Conference & Exhibition on Islamic Banking & Takaful
2 November 2010, Lahore, Pakistan
Mr. Mamode Raffick NABEE MOHOMED
Founder and Secretary of Al Barakah Multi-purpose
Cooperative Society Limited, Mauritius.

Mr. Nabee Mohomed holds a Bachelor of Commerce, a Post

Graduate Certificate in Education and a Post Graduate
Diploma in Islamic Banking & Insurance (IIBI-London). He is a
student at IIIBF for the PG Dip. in Islamic Finance. He is an
Educator, also lectures on Islamic Banking & Finance and is an
Associate Fellow of the Institute of Islamic Banking and
Insurance which is based in London.

Mr. Nabee Mohomed has also done a thesis on “An empirical

study of the Muslim Family in a rural set up”.

He has acted as panelist and speaker at International

Conferences and seminars on Islamic Finance and presented
the case study of Al Barakah MCSL in Trinidad &Tobago,
India, Pakistan, Malaysia and South Africa. He has also
attended several short courses and training.
 Muslim Credit Union (Trinidad & Tobago)
- Training in Islamic Finance at M.C.U (3rd Feb. to 21 Feb. 1999)
 National Cooperative Training Centre, Mauritius
- Management & Leadership for Leaders of Cooperative Credit
Unions, (24 & 25 Oct.2001)
 Cooperative College of Malaysia
- Project Preparation and Appraisal (23-27 February 2004)
- Corporate Governance (23-26 May 2005)
 Association of Asian Confederation of Credit Unions (ACCU)
- Modern Management of Cooperative Credit Unions (02-03 July
 International Islamic University, Islamabad (Pakistan)
- Attended the 22nd International Programme for Human Resource
Development from 14/11/2005 to 14/12/05 at Dawah Academy,
 Cooperative Muslimine Malaysia Berhad (Malaysia)
- Internship in Islamic Finance & Islamic Accounting for Islamic
Co-operative Societies (15 December 2008-02 January 2009)
 Islamic Finance & Islamic Financial Institutions
 Concept of Co-operatives
 Islamic Financial Co-operatives
 Financing intruments of IFC
 Reserves & Funds
 Case Study of Al Barakah Multi-purpose Co-op Society Ltd.-
 Geographical background & Muslims in Mauritius
 Islamic Banking & Finance & Muslims in Mauritius
 Integrating Islamic Finance in Cooperatives
 Organisation of Al Barakah
 Legal Framework
 Products & Services
 Other activities
 Challenges
 Conclusion
 Opportunities with Al Barakah for Islamic Banking &
Finance in Mauritius
 Islam is a practical way of life with its own system
 Inheritance in the economic sphere & scholars at
 Initiatives-No working model & since 1960’s IBF
started–Mit Ghamr 1963
 Emergence of IFI & growth
 Satisfaction/Criticism
 Types of Islamic Financial Institutions (IFI)
 Dominance & neglected areas & Evolution
 According to Professor Rodney Wilson “Formal Islamic banking first
emerged in the early 1960’s through credit unions of Muslim landowners in
Egypt and Pakistan who simply pooled their resources and could then in turn
draw out funds for agricultural improvements on a non-interest basis.” (The
evolution of Islamic banking and emerging trends in Islamic Finance)
 Interest Free Financial institutions (IFFI) of India are the forerunners in the
history of global Islamic financial movement. Tracing the history of growth of
interest free financial institutions in India, it is reported that such organized
credit society had shown its presence as early as 1890. According to the
directory of Islamic banks in India, such efforts in the organized sector in the
style of the Patni Cooperative Credit Society Ltd. was established in
A recent study conducted by Bagsiraj (2003) shows that there are
institutions that have grown to a size of 14 Islamic Cooperative Credit Society
(ICCS) in India. It may be noted that these institutions primarily fulfill the
casual social needs of the people at a very small scale.
(Dr Rahmatullah-IFFI of India in crisis/Bagsiraj-IFII,published by KAU, Jeddah
in 2003)
 “The history of Islamic Financial system in Thailand started with the
establishment of a cooperative society, Pattani Islamic Saving Cooperative
that operates based on shariah in 1987….. These Islamic cooperative societies
have successfully established themselves as viable financial institutions in
managing and mobilizing Muslims in this region.” ( Islamic banking in Thailand:
prospects and challenges (Sudin Haron & Kumajdi Yamirudeng)
 Concept of cooperative:
- From the beginning of human society, cooperation has
always been a vital factor in human development.
- As a social creature, it is the natural urge of man to
cooperate with each other.
- Cooperation conveys the idea of helping each other
and making joint efforts to achieve a common goal.
 The Cooperative movement emerged in the middle of
the 19th century by the Rochdale Pioneers. On the 24th
October 1844, in Rochdale, Lancashire England, a group
of people faced with economic exploitation and
deprivation set up a cooperative store, based on the
principles of self-help and mutual help. They defined a
set of principles which became the basis for the
cooperative ideology which has spread all over the world
be it a capitalist, socialist or Muslim society.
 A cooperative is an autonomous association of
persons united voluntarily to meet their common
economic, social and cultural needs and aspirations
through a jointly owned and democratically
controlled enterprise. (
 7 principles of cooperatives:
1. Voluntary and open membership (VoM)
2. Democratic member control (DmC)
3. Member economic control (MeC)
4. Autonomy and independence (A&I)
5. Education, training and information (EtI)
6. Co-operation among co-operatives (CaC)
7. Concern for community (CfC)
 Sectors of the economy-PMT
 Class of Co-op societies/Multi-purpose Co-operatives
- Consumer Co-op, Producers, Marketing, Housing,
Catering, Financial Co-operatives/Credit unions etc.
 What is a Credit union?
- A credit union is a financial cooperative that may
accept savings, deposits, provide credit and other
financial services to its members.
- Credit Unions are financial cooperatives which are in
effect community banks.
- Membership: people from all walks of life,
- Common bond
- Owned & controlled by shareholders/members
- Capital: mobilising from shares ,savings & deposits
from members
- Financing/not for profit maximisation
- Surplus-back to shareholders
 Generally Conventional co-operatives/credit unions
are interest-based
 Credit unions called by different names:
- In Africa-Savings And Credit Cooperative Societies
(SACCOS) which emphasise on savings before credit.
- In Afghanistan-(IIFC) Islamic Investment and
Finance Cooperatives which comply with sharia.
 IFC are institutions based on the principles of Islamic
 Efforts over the past 30 years to set up IFC
 Community-based and providing Islamic financial
services to the community
 Islamic Financial Co-operatives around the globe
(T&T, Canada, Malaysia, Thailand, Indonesia,
USA, Australia, India, Singapore,
Why IFC?
1. Conceptual framework
“Cooperate with all in what is good and pious and do not cooperate in what
is sinful and wicked….” (Q-5:2)
2. Legal framework is less regulated than the corporate sector (Cooperative
Societies Act ,CU Act) – Shariah-compliant
3. Values - Islamic Finance–based on Islamic ethics: justice, sharing,
- Cooperatives based on values: honesty, equity, equality, solidarity,
self-help, etc.
4. Easy formation & more elastic
5. Small capital requirement
6. Community –based & more people-oriented( IEViews..)
7. Spread ownership of business and reduce concentration of wealth
8. Different purposes - open to any type of economic activity
9. Incentives & Benefits –Tax
10. Democratic
 Murabahah
 Ijarah
 Mudarabah
 Musharakah
 Diminishing Musharaka
 Istisna
 Qard-ul-hasanah/IFL
 Statutory Reserve – according to Coop Act
 Dividend equalization Fund
 Social Takaful Fund
 Profit Equalisation Reserve
 Zakat Fund
Al Barakah
Multi-purpose Co-
operative Society

 Mauritius-gateway to Africa, South Asia & Asia
 Multi-religious society:
Population-1.3 M
Hindu :51%, Christians:28%,
Muslims :18%, Chinese :3%
 Muslims presence in all walks of life: Islamic
schools, professionals, orphanage, business,
 Muslims have contributed enormously in the
dvp. of the economy
 Business operated as family business
 But as a community, little has been done to
establish the financial system of Islam.
 Keen desire by Muslims to re-establish
their identity.
 Establishing an Islamic bank in Mauritius

in 1990’s was a manifestation of this

 To become part of the Islamic banking

 Preliminary work carried out.
 Formation of a Credit Union in the

Cooperative sector (AL BARAKAH)!

Islamic Finance through
Why Al Barakah?
1. To provide an alternative to the
interest-based financial institutions for
the community. (Community-based)
2. To provide halal investment
opportunities and returns.
3. To contribute in a halal way to the
overall development of the economy.
4. Formation of Al Barakah
(Registered on 10th June 1998)
Within the Co-operative Societies Act
Within the framework of its rules and
In accordance with Islamic Financial
 Advisors– Dr. Monzer Kahf (USA)
Dr. Ashyraf Dusuki(Malaysia)
Br. Imtiaz Ali (T&T)
To be a leading Cooperative Society in the field of
Islamic Finance for a fair and just society.
To operate as a financial institution based on
Islamic cooperative principles and providing
a wide range of services on an interest-free
 To present a practical model of Islamic
Finance through the co-operative sector.
 To lay the foundation for an alternative
financial system to the Mauritian
population at large.
1. To create a source of credit for its
members for provident and
productive purposes.
2. To provide savings facilities to
3. To create the framework to enable
members to manage their financial
resources for their mutual benefit.
4. To promote the welfare and
economic interest of its members.
 Tailor-made schemes based on
1. Household General Financing
2. Computer Financing
3. Traders Financing
4. Home Financing
5. Air Ticket Financing
6. Motor Vehicle/Cycle Financing
7. Land & Property Financing
 Istisnaa Financing (Manufacture-Sale)
 Partnership with shareholders (M&M)
 Interest-Free Loan (Qard-al-Hasan)
 Hajj Savings Account
Statutory Reserve
Profit Equalisation Reserve
Dividend Equalisation Fund
Social Takaful Fund

Creating awareness about Islamic Finance.

Organizing lectures, seminars,
conferences and workshop.
Organizing mini trade fair, socio-cultural
1. Individual/organisational/government
2. Legal framework
3. Public acceptance
4. Economic potential
5. Human Resource
6. Mass Education
7. Competition
 Mauritius wants to connect to this sophisticated
and growing global phenomenon that spans
banking, non-banking financial services, micro-
finance, insurance and capital markets.
 We will also set the regulatory framework for
leasing companies to market products which are
shari’ah compliant. (60)
 And to level the playing field appropriate
amendments will be made to the legislation to
make normal banking and Islamic banking tax

Budget speech 2008/2009 - Minister of Finance

 Legal & Regulatory Framework
* The Banking Act 2004-Amendments 2007
* The FSDA 2001-(Non-banking activities)
* The Cooperative Societies Act 2005
 Membership for corporate bodies
 Projects/Joint ventures etc.
1. 10 years of operation
2. An eye-opener
3. Islamic finance at different levels
4. Well-being of all citizens
Mamode Raffick Nabee Mohomed
Founder/Secretary Al Barakah M.C.S.L
Tel: (230) 6275766, 7781738