INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Introducing Islamic Finance in Unchartered Economy: The case of Canada by Baharom Abdul Hamid, Mohsin Ali, Wajahat Azmi, Zaheer Anwer International Centre for Education in Islamic Finance (INCEIF) 1

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) What?Why? How?Where? Islamic Finance in Unchartered Economy 2

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Islamic Finance Risk Sharing Abrahimic Finance Social / Ethical 3

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Why Islamic Finance is important for unchartered economies? Client Affinity Synthesis of Islamic law and contemporary finance Community banking: serving communities, not markets Microfinance and Crowd funding Inclusiveness Open to all Alternative paradigm linking financial services to the productive, real economy Moral alternate to present day finance Parallel Trends Ethical and Socially responsible Investments

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Where? Economic Diversification Global IF Expansion (OIC & Non- OIC) Demand for Islamic Financial Inclusion An alternative to conventional system for the crisis-hit economies Target the countries which could be gateway to the financially advanced countries e.g. Canada Source: KFHR

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Consequences of Conventional Finance Dot com Global Financial Crisis Asian Financial Crisis Russian Financial Crisis 6

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) How IF would create difference? One to one mapping of real and financial sectorEquitable distribution of risk and reward Prevention of speculation Ownership is prerequisite of sale Excessive risks are prohibited The Islamic virtue of moderation  keep ‘demand-pull‘ inflation at bay.Admonition Wastage and Extravagant spending

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Demographics Lack of Islamophobia Prerequisite Islamic characteristics Developed ethical market Canada 8

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Common Grounds Close Resemblance between SRI and IF Faster growth of SRI (30%) & IFI (20%) as compared to Peers Sustainability concerns 9

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Forecasting – Islamic Finance in Canada Sukuk projections Replacement cost of underdeveloped infrastructure - C$171.8 billion (2015) Additional funding of C$ 10 billion every year Requires funding over next five years Sukuk issuance – can attract C$34 billion (2016) to C$74 billion (2020) Target market-Islamic banks, OIC countries

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Forecasting – Islamic Finance in Canada Islamic Mortgage demand Average house price - C$503,301 (house price growth %) Muslims (1.3 million) and Christian (22.10 million). Average household 2.5 Population growth - 8% ( ) Target customers - Muslims (50%) and Christians (10%) Average down payment - 20% (assumption) Assuming 70% of total population would require home financing. Islamic mortgage is expected to be C$86 billion in 2016 and is expected to be C$110 billion in 2020

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) Forecasting – Islamic Finance in Canada Islamic mutual funds prospects Islamic fund assets under management in Canada is US$240 million (2014) Gaining acceptance due to similarities with Ethical funds Based on population growth and the popularity, it is expected to grow 20% Forecasted to reach US$717 million in 2020

INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) INCEIF Consultancy Sdn. Bhd. (Company No.: W) (Incorporated in Malaysia) It is a fact that Allah does not change the condition of a people unless they bring about change in their own selves. 13