Islamic Corporate Finance

About the Course

Islamic finance, in general, is a set of moral principles supported by a comprehensive legal system governing and guiding economic and financial activities. It emphasises the balance between for-profit or market activities on one side and non-profit philanthropic activities on the other. Each and every economy would have two broad domains of economic activities. These are for-profit or market-based activities and non-profit, philanthropic activities.

Regardless of what system is adopted, these two domains are always there. Now the problem is how to reach balance and achieve the balance between these two domains. Islamic finance provides the necessary principles and guidelines to help balance these two domains of activities.

This Islamic Corporate Finance training course will give the delegates an overview of the Islamic financial system and Islamic banking products to finance corporate. They will acquire the core principles and basic corporate finance models such as time value of money and risk and return from an Islamic point of view. In addition, the delegates will understand the different types of financial contracts in Islam and the sources of Islamic Law “Sharia” and be able to interpret the meanings of various Islamic concepts, including Al-Ribâ, Al-Gharar, Al-Qimār, Al-Maisir and Ghubn. In particular, the delegates will learn about Murabaha, Ijarah, Salam, Iistisjna, and Istisjrar modes of finance and their applications, management, risks, and mitigation measures. Likewise, they will also learn about the nature of Islamic banking systems and the categories of Islamic Financial Institutions.

Core Objectives

Delegates will achieve the following objectives:

• Identify the characteristics of an efficient Islamic financial system
• Describe the roles of Islamic financial institutions
• Classify the different types of financial markets
• Understand corporate finance basics in an Islamic framework
• Develop a solid understanding of Islamic corporate finance products

Training Approach

This training course is driven by a blended learning approach and draws on various adult learning techniques such as action learning, experiential exercises, group discussions, video case studies, role play and self-reflection activities. The resulting variety helps delegates stay engaged throughout the course, feel challenged and draw quick wins for their development. It also ensures delegates are exposed to ample opportunities to apply what they learn to the real-world challenges they face back in the workplace.

The Attendees

Finance Professionals or Bankers who want to expand their knowledge about Islamic finance and understand the various Islamic modes of finance.

This training course will be valuable to professionals, including (but not limited to) the following:

• Bankers
• Islamic Finance Critics
• Finance professionals
• Central Bankers
• Corporate Credit Analysts
• Corporate Banking Professionals
• Corporate Risk Professionals
• Cost Accountants
• Financial Analysts
• Treasury Professionals

Daily Discussion

DAY ONE: OVERVIEW OF THE ISLAMIC BANKING AND FINANCIAL SYSTEM

• The Islamic Financial System
• Financial Markets
• Sources of Islamic Law & Types of Contracts in IF
• Types of Contracts in Islam
• The Concepts of Al-Ribâ, Al-Gharar, Al-Qimār, Al-Maisir and Ghubn
• The Basic Norms of the Islamic Financial System
• Approaches for Returns in Islamic Banking
• The Working of Commercial Banks: Investment Banks & NBFIs

DAY TWO: CORPORATE FINANCE IN AN ISLAMIC FRAMEWORK            

• The Firm and the Financial Manager
• Time Value of Money
• Risk and Return
• Market Efficiency
• Investment Decisions
• Sources of Finance: Financial Institutions & Financial Markets
• Cost of Capital and Financing Decisions

DAY THREE: ISLAMIC BANKING CORPORATE SOLUTIONS - MUDARABA

• Concept and Conditions of a Bai’ Mu’ajjal (Credit Sale)
• Murabaha Sale
• Murabaha Structures
• Murabaha to Purchase Order
• Purchase Requisition 
• Issues in Murabaha Contracts
• Commodity Murabaha & Risks and Mitigation Measures for Murabaha

DAY FOUR: ISLAMIC BANKING CORPORATE SOLUTIONS - IJARAH

• Introduction and Ijarah
• Ijarah Structures: Operating & Financial
• Issues in Management of Ijarah Contracts
• Modern Mode of Leasing
• Conventional vs Islamic Leasing
• Ijarah Muntahia-bi-Tamleek
• Issues in Modern Ijarah Contracts
• Deferred Delivery: The Istisnaa and Istijrar Contracts

DAY FIVE: ISLAMIC BANKING CORPORATE SOLUTIONS - MUSHARAKAH

• Shirkah and Its Two Categories
• Types and Conditions of a Mudarabah Contract
• The Concept of Musharakah
• Profit and Loss Under Musharakah
• Comparison of Musharakah and Mudarabah
• The Concept of Wakalah
• The Concept of a Tawarruq Contract
• The Concept of a Juaala