1. Meeting Customers’ Needs Mohammad Haris Deputy General Manager, Corporate Banking, Structured Finance & Product Development, Gulf African Bank

2. Mohammad Haris Presentation O utline  Introduction  Customer Needs  Shariah Compliant Solutions

3. During the past few years there have been significant developments in the world of Islamic banking and finance. The industry has evolved from a regional business into one of global scale. Major players have established different divisions and segmented their customer base between corporates, high net worth customers, entrepreneurs and a retail customer base. Introduction Mohammad Haris

4. Islamic banking and finance is no longer designed to serve the needs of the Muslim community only. The industry has started benchmarking its products to conventional suppliers in terms of convenience, benefits, pricing, transparency of terms and conditions, and service standards. Hence Islamic banking and finance products have gained popularity with non-Muslim communities due to their competitiveness and efficiency. Introduction Mohammad Haris

5. What do customers need? CORPORATES SMALL BUSINESSES RETAIL CUSTOMERS MICROFINANCE

6. Mohammad Haris What do customers need? CORPORATES SMALL BUSINESSES RETAIL NEEDS ADVANCES DEPOSITS SERVICES ADVANCES DEPOSITS SERVICES MICROFINANCE

7. Mohammad Haris ADVANCES DEPOSITS WORKING CAPITAL FIN. BMR FIN. ASSET FINANCE IMPORT FINANCE PROJECT FINANCING EXPORT FINANCE STRUCTURED FINANCE WORKING CAPITAL FIN. BMR FIN. ASSET FINANCE IMPORT FINANCE PROJECT FINANCING EXPORT FINANCE STRUCTURED FINANCE CURRENT A/C SAVINGS A/C TERM DEPOSITS INV. SCHEMES CURRENT A/C SAVINGS A/C TERM DEPOSITS INV. SCHEMES CORPORTAEs & SMEs SERVICES LETTER OF CREDIT LETTER OF G’TEE CHARGE CARDS INTERNET BANKING BANKERS’ CHQS FUND TRANSFERS REMITTANCES CHQ BOOK LETTER OF CREDIT LETTER OF G’TEE CHARGE CARDS INTERNET BANKING BANKERS’ CHQS FUND TRANSFERS REMITTANCES CHQ BOOK What do customers need?

8. Mohammad Haris ADVANCES DEPOSITS HOUSING FINANCE AUTO FINANCE WHITE GOODS FINANCE PERSONAL LOANS HOUSING FINANCE AUTO FINANCE WHITE GOODS FINANCE PERSONAL LOANS CURRENT A/C SAVINGS A/C TERM DEPOSITS INV. SCHEMES CURRENT A/C SAVINGS A/C TERM DEPOSITS INV. SCHEMES RETAIL SERVICES INTERNET BANKING ATM LOCKERS BANKERS’ CHQS FUND TRANSFERS CHQ BOOK INTERNET BANKING ATM LOCKERS BANKERS’ CHQS FUND TRANSFERS CHQ BOOK What do customers need?

9. Mohammad Haris ADVANCES DEPOSITS SMALL TICKET FIN. FOR: ASSET PURCHASE GOODS PURCHASE UTILITIES ETC. SMALL TICKET FIN. FOR: ASSET PURCHASE GOODS PURCHASE UTILITIES ETC. CURRENT A/C SAVINGS A/C TERM DEPOSITS CURRENT A/C SAVINGS A/C TERM DEPOSITS MICROFINANCE SERVICES MOBILE BANKING LOCKERS FUND TRANSFERS CHQ BOOK MOBILE BANKING LOCKERS FUND TRANSFERS CHQ BOOK What do customers need?

10. Mohammad Haris

11. What do customers need? Mohammad Haris

12. What do customers need? Mohammad Haris

13. Shariah Compliant Solutions Mohammad Haris

14. Meeting Customers N eeds Corporate / SME Customer Mohammad Haris

15. Meeting Corporate Customers’ needs? FINANCING NEEDIB SOLUTION WORKING CAPITAL MURABAHA: A sale transaction where the bank first buys goods and sell at cost plus profit basis NOTE: An exact substitute of OD not available with IB BMR FINANCING MURABAHA: IJARAHA: Similar to Lease transaction wherein Bank buys asset and then rents out to client. Ownership risk lies with IFI. DIMINISHING PARTNERSHIP: Bank and client jointly purchase asset. The client pays rent to use bank’s portion and also buys out bank’s ownership periodically. Ownership risk is shared. PROJECT FINANCING ISTISNA & IJARAH: The Bank makes pays the client to undertake and complete the project under Istisna contract. Once completed, the project is leased by the bank to the client under Ijarah contract. ASSET FINANCING MURABAHA IJARAH DIM. PARTNERSHIP

16. Mohammad Haris Meeting Corporate Customers’ needs? FINANCING REQUIRMENTIB SOLUTION IMPORT FINNACING MURABAHA: The bank first imports goods into the country and then sell at cost plus profit basis IJARAH: The bank imports machinery into the country and then leases it out to client under Ijarah contract. EXPORT FINANCING ISTISNA: The bank orders the client to manufacture export order against payment. Once ready, the client ships the goods as agent. Export proceeds settle the bank’s exposure PURCAHSE & AGENCY: The bank buys the goods ready for export by making payment. The client then ships the goods as bank’s agent. Export proceeds are issued to settle bank’s exposure STRUCTURED FINANCING CM MURABAHA: Bank buys goods. An independent manager stores/manages it. Bank sells to client periodically on cost plus basis. LPO Financing FINANCING SYNDICATIONS ISLAMIC BONDS

17. Mohammad Haris Meeting Corporate Customers’ needs? DEPOSIT/ INVESTMENT IB SOLUTION CURRENT ACCOUNT Interest free account based on QARD (Loan) SAVINGS ACCOUNT MUSHARAKA: Partner ship wherein Bank and depositors contributes fund. Bank manages funds in shariah compliant manner and the income is shared with the depositors as per agreed ratio. MUDARABA: Partner ship wherein depositors provide funds. Bank manages funds in Shariah compliant manner and the income is shared between the parties as per agreed ratio. TERM DEPOSITS MUSHARAKA MUDARABA INVESTMENT SCHEMES SUKUK (Islamic Bonds) EQUITY MARKETS (Stocks complying with shariah screening criteria)

18. DepositorsGulf African Bank Weightage System Pool of Funds Businesses/Corporates/Retail Profits Financing Profits Deposits Equity Deposits – Partnership Structure Mohammad Haris

19. Meeting Corporate Customers’ needs? DEPOSIT/ INVESTMENT IB SOLUTION LETTER OF CREDIT & LETTER OF G’TEES Available. However, slab structure for service charges as against opening commission as a percentage. DEBIT CARDS & CREDIT CARDS Available Available - but with limitations INTERNET BANKING Available FUND TRANSFERS, REMITTANCES Available CHQ BOOK, BANKER’S CHQS ETC. Available

20. Meeting Customers N eeds Retail Customer Mohammad Haris

21. Meeting Retail Customers’ needs? FINANCING REQUIRMENTIB SOLUTION HOMEFINANCING DIMINISHING PARTNERSHIP: Bank and client jointly purchase asset. The client pays rent to use bank’s portion and also buys out bank’s ownership periodically. AUTO FINANCING MURABAHA IJARAH WHITE GOODS FINANCING MURABAHA IJARAH PERSONAL LOANS Complicated structure in case of non-asset based financing need such as Education loan, Medical loan etc.

22. First complete Islamic Home Finance facility Kenya! 100% Halal, Afford able & Hassle Free Mohammad Haris Meeting Retail Customers’ needs? For upto 20 years Affordable rates Bank as a partner No advance Rental

23. First Islamic Car Financing product in Kenya! Completely Free from Interest / Riba Is not a Hire-Purchase agreement For all Locally manufactured new & used cars No upfront Insurance Payment No advance Rental on Day 1 Mohammad Haris Meeting Retail Customers’ needs?

24. Mohammad Haris Meeting Retail Customers’ needs? DEPOSIT/ INVESTMENTIB SOLUTION CURRENT ACCOUNT Interest free account based on Qard (Loan) SAVINGS ACCOUNT MUSHARAKA: MUDARABA: TERM DEPOSITS MUSHARAKA MUDARABA INVESTMENT SCHEMES (For HNWIs) SUKUK (Islamic Bonds) STOCKS (complying with shariah screening criteria)

25. Mohammad Haris Meeting Retail Customers’ needs? DEPOSIT/ INVESTMENT IB SOLUTION DEBIT CARDS & CREDIT CARDS Available Available - but with limitations INTERNET BANKING MOBILE BANKING Available FUND TRANSFERS, ATM Available CHQ BOOK, BANKER’S CHQS, LOCKERS Available

26. Meeting Customers N eeds Microfinance Customer Mohammad Haris

27. Meeting Microfinance Customers’ needs? FINANCING REQUIRMENTIFI SOLUTION RAW MATERIAL FINANCING MURABAHA SALAM: Purchase of commodity for deferred delivery in exchange of immediate payment ASSET FINANCING MURABAHA IJARAH LOANS FOR PAYMENT OF SERVICES ETC. Complicated structure in case of non-asset based financing need such as payment of utility bills, salary etc.

28. Mohammad Haris Meeting MicroFinance Customers’ needs? DEPOSIT/ INVESTMENT IFI SOLUTION CURRENT ACCOUNT Interest free account based on Qard (Loan) SAVINGS ACCOUNT Musharaka: Mudaraba: TERM DEPOSITS Musharaka Mudaraba

29. Mohammad Haris DEPOSIT/ INVESTMENT IB SOLUTION MOBILE BANKING Available FUND TRANSFERS Available CHQ BOOK, LOCKERS Available Meeting MicroFinance Customers’ needs?

30. Mohammad Haris Conclusion Corporate/ SME Financing Needs √ Investments Needs √ RetailMicroFin. Financing Needs √ Investments Needs √ Financing Needs √! Deposits/ Services Needs √

31. Thank you! Mohammad Haris