A two day workshop was held by AlHuda CIBE at NIBAF, State Bank of Pakistan in Islamabad on Islamic Agriculture Finance where Islamic Financial products were introduced for the agriculture sector to facilitate the Islamic Banks and Financial Institutes to promote the agriculture sector in the country.
Speaking on the occasion, CEO, AlHuda CIBE, Mr. Muhammad Zubair Mughal said that it has become necessary to introduce Islamic Banking and its merits in the Rural areas due to the rapidly growing network of Islamic Banks in order to facilitate so that the agriculture requirements of the farmers can be fulfilled in accordance with the Shariah.
Explaining in detail the Islamic Financial products introduced in the workshop, he said that these products have been designed while keeping in view the short, medium and long term requirements of the farmers and institutes.
He added that products like Bai Murabahah are designed to help in the procurement of Seeds, Fertilisers and Pesticides, and Ijarah for operating Lease of Tractors, Agriculture machinery, Harvesters etc. whereas Musharaka is meant for Purchase of Seeds, Fertilisers, and Pesticides along with assisting Irrigation facilities, Crop storage Godowns and Marketing. Likewise, Diminishing Musharaka is for the purchase of Agriculutre machinery/equipment, installation of Tube wells/wells and construction of Dairy/Poultry Farms etc. and provide farmer with professional agriculture facilities in view of the Shariah.
He stressed that Bai Salam is an excellent financial product for the agriculture sector and can assist the farmers in their Liquidity requirements (Short term financing and Consumption expenditure). Through Mutawazi Salam, It can also be used to fulfill other requirements. In fact it is an ideal product for Islamic Banks, Sugar Mills and Floor Mills.
The important feature of the workshop was that Sukuk Islamic Bond Models were introduced for corporate financing in the agriculture sector. Sukuks like Muzara’a Sukuk which is for partnership in the crop, Masaqa Sukuk for the Irrigation and Mugharsa Sukuk which is a form of agriculture partnership and Istisna Salam Sukuk.
Various Products of Takaful such as Live Stock Takaful and Crop Takaful were also discussed in the workshop in order to find out how Takaful Islamic Insurance can assist in the growth and development of the agriculture sector. The workshop was attended by a large number of representatives from Agriculture department, Islamic Banks, Conventional banks and agriculture related government and private institutes and the efforts of AlHuda CIBE for the growth of Islamic Agriculture Financial services were highly appreciated