Industry Article

In a historic move, the Maldives government has decided to allocate US$100,000 from the Maldives Zakat Fund to provide humanitarian aid to Gaza, Palestine. This decision, announced by Islamic Minister Dr Mohamed Shaheem Ali Saeed, marks the first time that funds from the Maldives Zakat Fund are being directed overseas. The assistance will be channeled to Gaza through the Qatari Red Crescent, with the Islamic Ministry having previously sent aid to Gaza twice through this organization. Dr Mohamed Shaheem stated that the US$100,000 will be sent to Gaza in two instalments, with the funds earmarked for purchasing food for the people of Gaza. He emphasized that this initiative is being carried out under the directive of the president.

EyeCare's parallel sukuk istisna facility has achieved significant success, raising 86% of its target amount, reaching MVR26.07 million (US$1.68 million). This sukuk facility, priced at MVR1,000 (US$64.4) per unit, aims to support the development of an eye center with a parking facility at Hulhumale'. The issuance, classified as a debt offering, attracted considerable interest from investors, signaling confidence in the project and its potential impact. With a targeted issue size of MVR30 million (US$1.93 million), the sukuk's strong performance underscores investor optimism in EyeCare's vision for enhancing eye care infrastructure. The issuance, characterized by a profit share ratio of 8% and a semi-annual return frequency, has garnered attention for its commitment to both financial sustainability and community development.

In June 2023, the United Nations Population Fund (UNFPA), Selangor Islamic University and Yayasan KUIS signed an MoU to begin their collaborative journey towards integrating Islamic finance to holistically address vital social issues such as domestic violence , access to education and developing an intergenerational elderly care model. This initiative, driven by Maqasid Shariah principles, reflects a commitment to ethical and universally accepted objectives. The selection of areas - financial empowerment for survivors, education for children and elderly care - was underpinned by Shariah justification. The project aligns seamlessly with Maqasid Shariah, upholding human dignity, protecting lineage and preserving life. This alignment provides a robust ethical foundation, ensuring that the initiatives resonate with the broader principles of Islamic finance. Crafting sustainable initiatives posed the next challenge. The Work Kafalah Program, focusing on economic empowerment for survivors, and the Orange Fund Initiative, catering to the educational needs of survivors' children, took shape. Additionally, the Community Credit Intergenerational Model (CCIM) was proposed for elderly care. Each initiative was meticulously designed to not only address immediate needs but to foster long-term sustainability.

The first corporate sukuk facility was issued in the Maldives by the Housing Development Finance Corporation based on a mudarabah structure which was listed on the Maldives Stock Exchange (MSE) on the 17th February 2014. Later on, the company using the same structure issued three more sukuk that were listed on the MSE on the 6th December 2017, 22nd December 2019 and 19th December 2021. The subsequent issuances of sukuk in the Maldives were issued through Viyana, an electronic platform which is the private securities segment of the MSE.According to Chapter 11 of the Listing Rules of the MSE which became effective on the 30th June 2022, the private securities segment will be operated on Viyana by the MSE.

EyeCare, a prominent provider of eye care services, has announced the opening of subscription for its MVR30 million (US$1.94 million) sukuk offering. The sukuk issuance adheres to the principles of Islamic Shariah and is structured as a parallel sukuk istisna facility. The funds raised will be allocated toward financing the development of an eye care service center in Hulhumale, including associated parking facilities. This is the first time in the Maldives that a sukuk facility has been issued based on parallel Istisna. According to First National, the lead arranger of the sukuk, investors can expect to receive profits at an annual rate of 8% over the sukuk's five-year tenor, distributed semi-annually.

In a significant development, the Maldives has gained recognition as a prominent player in the global halal economy, according to the State of the Global Islamic Economy Report 2023/2024 upon analyzing the affluence of Muslim consumers and trends in Islamic economies. The report highlights the economic strength of the Maldives, emphasizing its robust GDP per capita of US$11,818 in 2022 which solidifies the nation's position in the global economic landscape, specifically within the Islamic economy. The Maldives is in 10th position in the list of top Islamic finance countries, underscoring its active role and influence in shaping the global Islamic finance sector. Additionally, global collaborations such as with the International Islamic Trade Finance Corporation have positioned the Maldives in significant trade and investment initiatives across various nations.