7TH INTERNATIONALTAKAFULSUMMIT

18TH 19TH FEB2013CAIRO,EGYPT

MICROTAKAFUL AS STIMULUS FOR ISLAMIC MICROFINANCE SUDAN VIEW

OMER ELFAROWG AHMED (DIP CII)

CONTENTS
ISLAMIC MICROFINANCE SYSTEM IN SUDAN ISLAMIC MICROFINANCE FUNDS IN SUDAN. MICROTAKAFUL AS STIMULUS FOR ISLAMIC MICROFINANCE. HOWPACKAGEOFCOVERSCONTROLMICROTAKAFUL RISKS. MICROTAKAFULSUCCESSFULPRACTICES. LOSS PREVENTION MEASURES AS RISK CONTROL TOOL FOR MICROTAKAFUL MICROTAKAFUL OPERATORS OPPORTUNITIES AND CHALLENGES. BENEFITS OF MICROTAKAFUL. 2

ISLAMICMICROFINANCESYSTEMIN SUDAN
A:
REGULATOR : CENTRAL BANK OF SUDAN
[CBOS] MICROFINANCE UNIT
LEGISLATIONS CAPACITY BUILDING PROMOTER OF MICROFINANCE SECTOR IN SUDAN. CBOSDIRECTEDCOMMERCIALBANKSTOALLOCATE12% OFTHEIRTOTALLENDINGPORTFOLIOSTOMICROFINANCE SDG3.6BILLION[ABOUT$650,000,000

ISLAMICMICROFINANCESYSTEMINSUDAN

B: MICROFINANCE SUPPLY:
1/ BANKING SYSTEM 33COMMERCIALBANKSAREFUNCTIONING, 20BANKSPROVIDING ISLAMICMICROFINANCESERVICES AMAN FUND SDG 200,000,000 75% BANKS 25% ZAKAT AUTHORITY LOAN SIZE UP TO SDG 20,000.00
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ISLAMICMICROFINANCESYSTEMINSUDAN 2/ SOCIAL FUNDS

A. NATIONAL PENSIONERS FUND B. GRADUATE EMPLOYMENT PROJECT C. OTHERS PROVIDESUPPORTTOPOORANDLOW INCOMEGROUPS,INCLUDINGWOMEN,THE ELDERLY,STUDENTS,GRADUATES,AND PENSIONERS

ISLAMICMICROFINANCESYSTEMINSUDAN

D: KEY STAKEHOLDERS / SUPPLIERS

FEDERAL GOVERNMENT STATE GOVERNMENTS LOCAL GOVERNMENTS BELOW STATE LEVEL BANKING SYSTEM INSURANCE SECTOR PROJECTS , FUNDS, PROGRAMS, SCHEMES NGOs PRIVATE SECTOR TRAINING INSTITUTIONS AND UNIVERSITIES
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MICROFINANCE SYSTEM
MICROFINANCE HIGHER COUNCIL MICROFINANCE UNIT CENTRAL BANK OF SUDAN

MICROFINANCE SUPPLIERS

SMALL ENTERPRISES DEVELOPMENT CENTER

MICROFINANCE GURANTEEAGENCY

MICROTAKAFULASSTIMULUSFOR MICROFINANCE
IN2008SUDANESEINSURANCEMARKETLAUNCHED MICROTAKAFULPRODUSTINRESPONSETOTHECBOS DIRECTIONTOTHECOMMERCIALBANKSTOPROVIDE MICROFINANCE. TOFILLTHEGAPINMICROFINANCECYCLE. TOENCOURAGEBANKINGSYSTEMTOFINANCESMALL ENTERPRISESTOHELPPOVERTYALLEVIATION. TOPROTECTMICROFINANCEFUNDSAGAINSTDEFAULT RISK. TOHELPIMPLEMENTATIONOFCBOSMICROFINANCE STRATEGY.
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HOWPACKAGEOFCOVERS CONTROLSMICROTAKAFULRISKS

SHIEKAN AS A MULTILINES TAKAFUL OPERATOR PROVIDES A PACKAGE OF COVERS

MATERIAL DAMAGE [M/D] INSURANCE

CREDIT INSURANCE

FAMILYTAKAFUL [ISLAMICSUBSTITUTE FORLIFEASSURANCE]

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*MATERIALDAMAGECLASSES LIVESTOCK. FIRE&BURGLARY. MB. EE. MOTOR. AGRICULTURAL.

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INSUREDPERCENTAGE:
CREDITINSURANCE90% MATERIALDAMAGEINSURACE100% FAMILYTAKAFUL[LIFE]100%

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MICROTAKAFULSUCCESSFULPRACTICES
MICROTAKAFULPILOTPROJECT20082011 CONNECTINGFARMERSTOMARKETSPROJECTS 2011

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MICROTAKAFULPILOTPROJECT20082011

PARTICIPANTS:
SAVINGSANDSOCIALDEVELOPMENTBANK.
FAMILYBANK. REALESTATECOMMERCIALBANK. FARMERCOMMERCIALBANK. SUDANESEAGRICULTURALBANK. ISLAMICCOOPERATIVEDEVELOPMENTBANK. ANIMALRESOURCESBANK. INDUSTRIALDEVELOPMENTBANK. ALSHAMALISLAMICBANK. OMDURMANNATIONALBANK.
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SECTORSINSURED:2008TO2011
50 45 40 35 30 25 20 15 10 5 0

46.5

36.7

11.7 4.1 1 COMMERCIAL LIVESTOCK TRANSPORT INDUSTRIAL AGRICULTURAL

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MICROTAKAFUL PILOT PROJECT BUSINESS 2008 2011

YEAR BUSINESSINSURED SDG PREMIUMSDG BENEFICIARIES

2008 2009 2010 2011 TOTAL

8,829,960.42 35,935,032.10 43,466,498.85 27,314,591.20 115,546,082.57

382,371.21 2,112,768.70 2,228,223.05 1,615,477.00 6,338,839.96

752 8555 6099 1759 17,172

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PILOTPROJECTBUSINESSINSURED2008 2011
43,466,498.85
45000000

35,935,032.1
40000000 35000000 30000000 25000000 20000000 15000000 10000000 5000000 0

27,314,591.2

8,829,960.42

2008

2009

2010

2011

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26

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CONNECTINGFARMERSTOMARKETSPROJECT KEYCONCEPT/THEMEOFTHEPROJECT:
SCALEFARMERSTOGETOUTOF THECYCLEOFUNDERPRODUTIONANDPOVERTY. BECOMESELF SUFFICIENTANDPRODUCEA SURPLUS.
TOENABLESMALL

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MAINOBJCTIVES:
TOCONNECTSMALL SCALEFARMERS[LESSTHAN 5TO10FEDDANS]TOFOURMARKETS. MARKETFORMICR CREDIT. MARKETFORMICRO TAKAFUL. MARKTFOREXTENTIONSERVICES. MARKETFORSALE.

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CONNECTINGFARMERSTOMARKETS:
PARTENERS: MICROFINANCEUNIT,CENTERALBANKOFSUDAN (MFU). UNWORLDFOODPROGRAMME(WFP). UNDP.

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CONNECTINGFARMERSTOMARKETS

1
MICRO FINANCE

2
MICRO TAKAFUL

3
AGRICULTURE EXTENTION SERVICES

4
AGRICULTURE CROPS MARKETS

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CONNECTINGFARMERSTOMARKETS:
PARITICIPATS BANKOFKHARTOUM. FAMILYBANK. SAVINGSANDSOCIALDEVELOPMENTBANK.

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CONNECTINGFARMERSTOMARKETS:
FINANCE SDG PREMIUM SDG BENEFICIARIES (FARMERS)

17,000,000.00

935,000.00

66,000

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MICROTAKAFULPILOTPROJECT&CONNECTINGFARMERS TOMARKETSBUSINESS2008 2011

YEAR BUSINESSINSURED SDG PREMIUMSDG BENEFICIARIES

2008 2009 2010 2011 TOTAL

8,829,960.42 35,935,032.10 43,466,498.85 44,314,591.20 132,546,082

382,371.21 2,112,768.70 2,228,223.05 2,550,477.00 7,273,839

752 8555 6099 67,760 83,172

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BUSINESSINSURED2008 2011
PILOTPROJECT&CONNECTINGFARMERSTOMARKETS
43,466,498.85
45000000 40000000 35000000 30000000 25000000 20000000 15000000 10000000 5000000 0 1 2 3 4

44,314,591.20

35,935,032.10

8,829,960.42

2008

2009

2010

2011

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GOVERNMENTSUPPORT:
GOVERNMENTPAY50%OFAGRICULTURAL INSURANCEPREMIUMTOINSURANCE COMPANIES.

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WHOBEARTHEPREMIUM:
MATERIAL DAMAGE COVER BENEFICIARIES OR PARTICIPANT FAMILY TAKAFUL (LIFE) COVER BENEFICIARIES OR PARTICIPANT DOMESTIC CREDIT COVER PARTICIPANT (BANK) ONLY.

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LOSSPREVENTIONMEASURESASRISK CONTROLTOOLFORMICROTAKAFUL:

LOSS PREVENTION DEPARTMENT:

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 THEMEASURESTAKENTOREDUCETHE PROBABILITYOFOCCURRENCEOFALOSS INCLUDE: 1/ RISK ASSESSMENT 2/VETERINARY SERVICES 3/TECHNICAL SUPPORTS 4/POST LOSS SURVEY 5/RISK IMPROVEMENT ADVICE 6/CORRECTIVE ACTIONS.
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 MICROTAKAFULOPERATORS: SHIEKANINSURANCE&REINSURANCECO. ISLAMIC INSURANCE CO. AL TAWONIA INSURANCE CO. AL BARAKA INSURANCE CO. MICROTKAFULPOOL.

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MICROTAKAFULOPPORTUNITIES:
HUGEMICROFINANCEFUND. MICROFINANCE INFRASTRUCTURE. REGULATOR MICROFINANCE SYSTEM. LEGISLATIONS. GOVERNMENTS SUPPORT.

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MICROTAKAFULCHALLENGES:
MICROFINANCEAWARENESS. EFFICIENT RISK MANAGEMENT TOOLS. LACK OF CREDIT INFORMATION. MORAL HAZARD. REINSURANCE CAPACITY. INSURANCE PRODUTS EXPANTION

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BENEFITSOFMICROTAKAFUL
LOANGURANTEEFORFINANCEPROVIDERS POLICYHOLDERSENTITLEDTOSURPLUS REDUCEINSURANCECOST POLICYHOLDERSBENEFITSFROMLOSS PREVENTIONSERVICES REDUCEECONOMICWASTE SOCIALRESPONSIBILITY HELPPOVERTYALLEVIATION AMETHODOFCOOPERATIONBETWEEN PARTICIPANTS
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Thankyou

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