IFIL believes in 'home-grown ethos of innovation'

Islamic Finance and Investment Limited (IFIL) has taken various steps to help accelerate the pace of country's trade and businesses.

"As a financial institution, we are working to create employment and industrialization. We believe in inclusive growth and we put focus on CSME and agriculture to build more entrepreneurs and employment scopes," AZM Saleh, managing director & CEO of IFIL, told the FE in an interview recently.

He said IFIL puts thrust on IT, agriculture, micro cottage and small industries, health and pharmaceuticals so that economy of the country can rebound from the economic fallout due to the pandemic. Encashment of investment in this sector will create employment opportunity as well as foreign earnings. Besides, IFIL is taking some special schemes to serve the teeming millions.

"As IFIL is a Shariah-based company, its schemes are very diverse. In addition to the conventional schemes in the market, there are some schemes which are very popular among the customers, Such as Mudaraba Asan (Easy) Deposit Scheme, Muhsinat (Special for Women) Deposit Scheme, Mudaraba Ashshifa (Deposit with Medical Services) Scheme, Mudaraba Atfal (or School Banking for Child) Scheme etc."

There are differences and distinctions in the investment schemes of Shariah-based organizations. IFIL's investment approach is more distinctive. That is why the investment system here is much more secure and customer friendly than the interest-based market system. Investment clients are never burdened with profit by taking investments from here. There is no need to run after compound interest. In this continuity, in addition to Bai Murabaha, Bai Muazzal, Higher Purchase Shirkatul Milk, Ijara, IFIL has investment schemes called Istismar (investment in small and cottage industries) and Linnisa (unsecured investment facility for women entrepreneurs). Through these investment schemes, the customers feel very comfortable to accept the investment.

"We have plans to introduce some more deposit schemes for the benefit of the customers. We are also planning to introduce long-term and short-term special assistance deposits and investment schemes, especially in the disaster situation like coronavirus.In addition, IFIL is in the process of taking various initiatives to extend its deposit and investment facilities to remote areas of the country."

Commenting on the contributions of the company, he said the IFIL is emphasizing special focus on CMSME sector to develop and nourish our own "Home Grown Philosophy of Innovation."

In recognition, IFIL has been awarded as "The Most Innovative Shariah Compliant Financial Institution" by International Finance Magazine, UK in the year 2018 and also received 'Asian Banking & Finance Award-2019, Singapore' as "The Finance Company of the Year-Bangladesh 2019".

Regarding the disbursement of government-announced stimulus package, he said the government and Bangladesh Bank have reacted promptly and taken many rescue packages like paying wages of employees in export-oriented industries, lending working capital loans to large scale industries and service sector, lending for CMSMEs, supporting the agriculture sector through stimulus package and rate cuts, helping low-income professionals, facilitating trade financing etc. through stimulus packages of total Tk. 1,11,141 crore.Among the package the government of Bangladesh has released around BDT 20,000.00 Crore for CMSMEs and BDT Tk 30,000.00 crore for large scale industries and service sector development of the country. To facilitate the disbursement under the stimulus package, Bangladesh Bank has kept 50% provision as refinance against the fund.

"IFIL is an Islamic Shariah-based company whose all activities are being operated under the principles of Islam. As such, we cannot participate in any transaction where interest involves. As refinance of the stimulus package is offering at fixed rate, so we did not avail any facility under the package," the IFIL MD cited.

"But we are actively patronizing CMSMEs clients under the scheme of Islamic refinance of Bangladesh Bank. Our success rate of getting refinance is almost 100%, so our CMSMEs clients enjoy lower profit rate against the investment. Considering the present pandemic situation, we are focusing on specially CMSME investment with faster decision and easy terms & conditions under the Islamic refinance scheme."

Commenting on the latest update on BLFCA's appeal to the BB regarding formation of a special fund package for the NBFIs, he said Bangladesh Leasing and Finance Companies Association (BLFCA) appealed to the Bangladesh Bank regarding formation of a special fund package for the NBFIs. The leaders of the BLFCA informed the BB that the NBFI sector is suffering because of the structural issues in the financial system and some wrong perceptions that need to be addressed sooner. They stressed the need for access to low-cost funds so that they can keep providing a lifeline to businesses during the phase of recovery from the pandemic shocks.

The BLFCA has placed a set of recommendations to the Bangladesh Bank to improve the financial health of NBFIs. The recommendations included inclusion of NBFIs in all the incentive packages made by Bangladesh Bank, arrangement for a Special Drawing Limit of Tk. 10,000 crore, reduction of CRR and SLR by 1.0 per cent, extension of restructuring period and liberalization of restructuring policies etc. Among them, Bangladesh Bank has issued notifications reducing the CRR by 1.0 percent and allowing extensions of restructuring upto 50% of the remaining period instead of 25%.

Regarding Tk. 10,000 crore Special Drawing Limit to salvage the ailing financial sector, the BB advised us with a positive attitude to raise the issue with the respective ministry for consideration.

"We have already submitted our appeal to the concerned authority," the IFIL top executive said.

Mr. Saleh in his prolonged banking career worked in Prime Bank Ltd., Dutch-Bangla Bank Ltd, ONE Bank Ltd and NCC Bank Ltd.

He is the Vice President of Bangladesh Economic Association (BEA) and Vice Chairman of Bangladesh Leasing and Finance Companies Association (BLFCA).