Marketing of Islamic financial products السلام عليكم ورحمة الله وبركاته

Marketing of Islamic financial products April 24, 2012 Alhuda-CIBE Trainings Avari Towers, Karachi Muhammad Azam Khan National Sales Manager FWU AG - Pakistan Branch

Marketing of Islamic financial products Available products: Islamic Banks / Windows Islamic Mutual Funds Takaful 5 full fledged Islamic commercial banks 12 conventional banks with Islamic banking windows 840 Plus Islamic banking branches Around $7 billion in deposits under management, representing approximately 8% market share. Islamic banking industry grew by 30% over the past six years. 15 out of 24 Asset management companies offering Islamic Funds. 4 Takaful players in the market

Marketing of Islamic financial products What are we up to? Selling Islamic products OR Selling products the Islamic Way! Have you ever heard of Islamic Beef? OR Islamic Chicken? Then why say Islamic ‘product’? Why not just ‘the product’, for example: Takaful

Islamic Finance Ebaadaat vs. Muamlaat Name is not what makes something halaal or haraam; it is: Process Documentation Roles & Responsibilities Tools of Islamic Finance Musharakah / Mudarabah Murabaha Ijarah Wakalah

Marketing of Islamic financial products Marketing: Promotional Activities (ATL & BTL) Use of Media (We’ve heard discussion about white labeled campaigns from the industry – Much needed) Direct Sales Force (Personal Selling) Sales through alternate channels like banks (Personal Selling)

Marketing of Islamic financial products Therefore, most of the growth can be accredited to: PERSONAL SELLING: The Preacher – Believer Relationship and who are these preachers? The Front Line marketing/sales people and how do we make them ‘Right Sell’? Through Extensive Training & Development…

How to Market? First and foremost …. believe in the differentiation And remember “SUBMISSION to ALLAH S.W.T.” The THREE levels of ‘Yaqeen’ (Belief) Do research - read related material to clarify your concepts Talk to ‘Learned People’, preferably Shariah Scholars Get formal education of Shariah Concepts Attend Seminars / workshops and then Preach… But as they say, you must practice what you preach Still half-hearted? Then, if you can’t face the heat, leave the kitchen.

Marketing of Islamic financial products What is Takaful? Takaful is derived from an Arabic word ‘Kafala’ meaning “Mutual Guarantee“ A system of Islamic Insurance based on the principle of Ta’awun (mutual assistance) and Tabarru’ (Gifts, give aways, donations); where the risk is shared collectively by the group Voluntarily. This is a pact amongst a group of members or participants who jointly guarantee themselves against loss or damage to anyone as defined in the pact.

Islamic Bibliography for Sales Defining Takaful: It is derived from an Arabic word ‘Kafala’ meaning “Mutual Guarantee“ – through Sharing Ta’awun (mutual assistance) ( Urdu: same as Arabic) Tabarru’ (Gifts, give aways, donations) (Urdu: Tabarruk) Waqf (fund): An asset (Maal aur Waqt) given in the ownership of Allah but for the benefit of Abdullah (Mankind) Alhamdulillah, Masha-Allah, Insha-Allah Use of these words is helpful Shariah: The Islamic Law. Shariah Compliance: Remaining in Ambit of Law Gharar: Uncertinty, Maysir/Qimar: Gambling Contribution not Premium – Why?

Open Forum – Discussion / Handling Objections Q&A Your Questions, please! What kind of objections / concerns you face?

Jazak-Allah khair!

Features of Takaful 1. Co-operative Risk-sharing for Protection 4. Compliant Investment strategies 2. Avoidance of Riba (interest) and Maysir (Gambling) 3. Gharar is dealt-with, using Tabarru’

Insurance V/s Takaful Insurance Process Insu red Conventional Insurance Risk Seller Risk Buyer

Insurance V/s Takaful Wakalah Takaful Operator Investment Partici pant Waqf Pool Risk sharing Between Participants Wakalah Surplus Wakalah Fee, Claims, Re-Takaful Takaful Process

Insurance V/s Takaful Conventional Insurance Takaful ? ? Risk transfer mechanism Risk sharing mechanism

Insurance V/s Takaful Conventional Insurance Takaful Risk transfer mechanism Risk sharing mechanism

Jazak Allah khair…