2. RIBA (Interest)
[ذَلِكَ بِأَنَّهُمْ قَالُواْ إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَواْ وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَواْ]
(That is because they say: "Trading is only like Riba,'' whereas Allah has permitted trading and forbidden Riba)
(Surah Al-Baqarah :275)

3. Islamic Mode of Financing V/S Conventional Mode
Islamic Financial Institutions
Conventional Financial Institutions
Deal with goods as well as documents
Deal with documents only
Supply/Receipt of Goods against money
Money/Documents are traded against Money/Document

4. Islamic Finance for the Poor
Micro
Entrepreneur
Islamic MF
Poorest of the Poor Qard – e – Hasna
Destitute - Zakat

5. COMMON MODES OF ISLAMIC FINANCING
PARTNERSHIP BASED
Musharka
Mudarba
TRADE BASED
Murabaha
Musawamah
Sala’m
Istisna
RENTAL BASED
Ijara
Diminishing Musharka

6. CENTRE FOR WOMEN COOPERATIVE DEVELOPMENT

7. ENTERPRISE DEVELOPMENT
VISION
POVERTY ALLEVIATION
THROUGH
ENTERPRISE DEVELOPMENT

8. MISSION
To support the Potential Poor in Pakistan break out of Poverty cycle by providing them with Necessary Borrower Islamic Finance, Business Development Services and Advocating their Rights.

9. BOARD OF DIRECTORS *Mrs. Farida Tariq, Mr. Ejaz Ahsan CHAIRMAN
Mr. Mushtaq Pirzada Vice Chairman
Mrs. Samina Islam General Secretary
Mr. Abbas Khan Finance Secretary
Mrs. Naseera Bokhari Joint Secretary
Dr. Shireen Zaffarullah Member
Dr. Waseem Bano Member
Mr. Jawaid Tariq Member
Mr. Raza Toor Member
Mrs. Khalil Ramdey Member
Dr. Tayyaba Nasreen Member
Eng. Arif Toor Member
Mr. Razi-u-Din Member
Mr. Abdul Rasheed Member (C)
Mr. M. Asghar Member(C)
Mrs. Afshan Jabeen Member (C)
Mrs. Shafqat Saleem Member (C)
AUDIT COMMITTEE
Dr. Waseem Bano
Mr. Raza Toor, ACA
Mr. Abbas Khan, FCA
EXECUTIVE COMMITTEE
Dr. Shireen Zaffarullah
Dr. Waseem Bano
Mrs. Samina Islam
Mr. Abbas Khan
Mrs. Farida Tariq
*Mrs. Farida Tariq,
CHIEF EXECUTIVE OFFICER

10. SUSTAINABLE ORGANISATION A BALANCED APPROACH TOWARDS
SUSTAINABLE BORROWER
SUSTAINABLE ORGANISATION
A BALANCED APPROACH TOWARDS
ISLAMIC MICRO FINANCE

11. THREE INGREDIENTS TO ENTERPRISE DEVELOPMENT
ISLAMIC MICROFINANCE
BUSINESS DEVELOPMENT SERVICES
RIGHT ADVOCACY
SUSTAINABLE BORROWER → SUSTAINABLE ORGANISATION

12. Organization Background
Started up in 1992 with Health & Education Projects
Working in Microfinance with an Islamic Approach Since 1999
Consultation with Scholars in Masjid e Ibrahim Lahore in 2002
Product/Asset based approach since day ONE
Consultation with Mufti Iftikhar Baig in 2006
Development of Islamic Model, 2008

13. Vision 2010 2009 Till Date Rs.1,000,000,000 30 Branch Offices Punjab
1999 & 2000
Rs. 658,000
1 Branch office
1 District
2001 & 2002
Rs. 1,753,500
1 Branch Office
1 District`
2003 & 2004
Rs.12,583,000
2 Branch Offices
2005 & 2006
Rs.122,844,000
8 Branch Offices
2007 & 2008
Rs.212,220,000
14 Branch Offices
3 Districts
2009 Till Date
Rs. 398,561,329
20 Branch Offices
5 Districts
Rs. 19,941,000
(Islamic 8 Branches)
Vision 2010
Rs.1,000,000,000
30 Branch Offices
Punjab
Opening of Islamic Branches
Development of Islamic Manuals
Review of Procedures by Shariah Consultant
Enterprise Development Facility
Districts Being Served:
Lahore
Sheikhupura
Gujranwala
Faisalabad
Nankana Sb

14. Financial Highlights 2009 2008 2007 Total Assets 342,036,181
241,635,322
187,131,312
Gross Loan Portfolio
145,908,619
116,087,060
106,087,220
Disbursements
105,916,028
113,951,000
98,269,000
Total No. of Clients Served
16,750
13,749
10,025
Operational Self Sufficiency
88.75%
87.6%
89.78%
Total Expense/
Assets
12.90
22.86
22.20

15. Islamic Modes Chosen by CWCD
Trade Based Mode
Murabaha
Sala’m
Istisna
Rental Based Mode
Ijara (Not Currently in Practise)
Diminishing Musharaka

16. Instant Sale on Deferred Payment
TRADE BASED
MURABAHA
Murabaha has been derived from the concept of “Bai - Mu’ajjal” which is “Instant Sale”
Instant Sale on Deferred Payment

17. Murabaha Vs Interest Bearing Loans
Murabaha Transaction is always asset backed.
Asset backing is not prerequisite for Interest bearing loans.
It is fixed price contract. Price can not be increased in case of default.
Interest is charged on daily basis from the Customer.
It is purely sale and purchase transaction.
It is lending of money and charging of interest.
Relationship between Bank and Customer is Seller and Buyer.
Relationship between Bank and Customer is Creditor and Debtor.

18. Pays on Deferred (Installments) Basis
MURABAHA
Buys Product
Sells Product at Purchase Price Plus Profit Margin
Pays Purchase Price
Pays on Deferred (Installments) Basis
CUSTOMER
VENDOR

19. TRADE BASED
Sala’m
Sala’m was permitted to facilitate the poor farmers and Traders who needed money to cultivate their crops or buy items in overseas/foreign lands in order to sell them afterwards.

20. Sal`m Advance Payment against Deferred sale
PAYS PURCHASE PRICE OF GOODS BEFORE MANUFACTURING/FARMING
MANUFACTURER/FARMER
DELIVER GOODS AFTER MANUFACTURING/FARMING
SELL GOODS AT PROFIT
THIRD PARTY / OPEN MARKET

21. TRADE BASED
Istisna
It is an order to the producer or manufacturer to produce/manufacture a specific commodity for the purchaser.
Istisna is also a particular kind of sale which is executed before the Asset come in to existence.

22. ISTISNA
PAYS PARTIAL PURCHASE PRICE OF GOODS alongside Production (Progressively)
MANUFACTURER
DELIVER GOODS AFTER COMPLETION
SELL GOODS AT PROFIT
THIRD PARTY / OPEN MARKET

23. Diminishing Musharaka
Rental Based
Diminishing Musharaka
Financier and his client participate either in the joint ownership of a property or an equipment, or in a joint commercial enterprise. The share of the financier is further divided into a number of units and it is understood that the client will purchase the units of the share of the financier one by one periodically, thus increasing his own share till all the units of the financier are purchased by him so as to make him the sole owner of the property, or the commercial enterprise, as the case may be.
The client pays rent for the portion of asset used by the client, owned by the financer incase of joint ownership of property or equipment

24. Diminishing Musharaka
Client Purchases CWCD Ownership & pays Rental on Remaining CWCD Ownership
VENDOR
Joint Purchase of Asset
Asset Purchased is Insured through Takaful
CUSTOMER

25. School Construction/Rennovation Up to Rs. 300,000 (Murabaha/Istisna)
Upper Cap – Rs. 300,000 per case
Rate is negotiated with the client
Done under Islamic Mode of Microfinance
Murabaha
Istisna(Pipeline)
Project has been completed within 2 months, and demand is coming from other enterprises for similar facility

26. Financial Highlights For Islamic Microfinance
Apr 2009 – Oct 2009
Total No. of Clients till Date
391
Average Facility Size
51,000
Total Amount of Facility Procured
19,941,000
Total Number of Branches 8

27. Challenges Faced in Islamic Microfinance Sector
Sources of FUND
The funds available are not in Islamic Mode and hence the Organization can never become completely Islamic
Increase in Cost of Transaction
Understandability of Islamic Finance
Availability of trained Human Resource

28. CWCD ISLAMIC MICROFINANCE TRAINING WING
Training Opportunities on Procedures of Islamic Microfinance, by the experienced Trainers of CWCD
Low cost training for the actual working in Shariah Complaint Microfinance
Interactive Sessions with Shariah Advisor

29. Future Plans Expansion of Islamic Microfinance within Punjab
Pre testing and Implementation of Musharaka & Mudaraba
Research & Development of new Islamic Microfinance Products

30. Thank You for Your Attention