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Marketing of Islamic financial products
الله ورحمة عليكم السالموبركاته
Marketing of Islamic financial products
April 24, 2012Alhuda-CIBE TrainingsAvari 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
Insured
Insured
Insured
Insured
ConventionalInsurance
RiskRiskRiskRisk
RiskSeller Risk Buyer
Insurance V/s Takaful
WakalahWakalah
WakalahWakalahTakaful Operator
Investment Participant
Participant
Participant
Participant
Waqf PoolRisk sharing
Between Participants
WakalahWakalah
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…
