• GroFin
  • Nomou Blog
  • Resources
  • Careers
  • Customer Charter
  • Contact Us
  • English
  • العربية
Nomou-MENA websiteNomou-MENA websiteNomou-MENA websiteNomou-MENA website
  • About Nomou-MENA
    • The Nomou Programme
    • Supporting Entrepreneurs
    • MENA Region
    • Why MENA?
    • Nomou Structure
    • Country Funds
    • The Nomou Team
  • Entrepreneurs
    • Nomou Funding & Business Support
    • How Nomou Works
    • Where Nomou Operates
    • Business Support from GroFin
  • Investors
    • Investors & Business Support Funders
    • Country Funds
    • Supporting Syrian Refugees
    • Impact at a glance
    • Development and Impact
    • Local Partners
  • Islamic Finance
    • About Islamic Finance
    • Islamic Finance at GroFin
    • FAQs
  • Apply for Finance

LEARN MORE

Support through Islamic Finance

GroFin is committed to supporting the local economy by offering Islamic finance thereby supporting growth and economic development.

Conforming to regional values

About Islamic Finance

Islamic finance is a financial service that follows the principles of Shariah, or Islamic law. Islamic finance is based on the concept that money itself has no intrinsic value.

As a matter of faith, Islamic law does not allow lending money to, or receiving money from, someone, and expecting to benefit with interest (known as Riba). Therefore, to make money from money is forbidden; wealth can only be generated through legitimate trade and investment in assets.

The overarching principle of Islamic finance, which distinguishes Islamic finance from conventional financing, is that payment and receipt of interest is strictly prohibited under Islam. Islamic finance therefore is governed by a set of rules that prescribe how to conduct business and do trade within an economy based on justice for all participants. In addition to the prohibition on charging interest, Islamic financial transactions must be free from ambiguity or speculation in any form.

Islamic finance in the Middle East and North Africa (MENA) countries has now become an important element on their societies’ development agendas. It is a fast growing sector as it caters the financial needs of people without conflicting with their religious and social values.

Islamic Finance

Ensuring inclusive growth

Islamic finance at GroFin

Small and medium enterprises (SMEs) are widely regarded as the engines of economic growth of all countries. However, a study by the International Finance Corporation (IFC) has shown that around 35% of SMEs in MENA are excluded from the formal banking sector because they seek Sharia-compliant products that are not readily available in the market.

As an SME development financier that helps entrepreneurs and business owners start or grow their businesses, GroFin is committed to supporting the local economy and taking the entrepreneur experience to the next level by offering Islamic finance products to cater to this emerging sector, thereby supporting growth and economic development.

The GroFin Jordan office has already financed three clients through the new Islamic product and expects to cascade the Islamic product throughout the GroFin network.

Murabahah Product

Murabahah is not a cash loan; it is a contract of sale of a specific commodity whereby the mark-up over the commodity is disclosed to the client.

This Shariah compliant product allows GroFin to extend financial services to a client by purchasing the commodity for and on behalf of a client at a fixed mark-up, which can be repaid under agreed terms and over an agreed period.

Murabahah is the most widely financing option in the world among all Islamic financing options. Murabahah cannot be used to fund working capital but only for the purchase of goods. However, the goods could be Sukuk and/or Shariah compliant bonds or securities in the stock market whereby the client can liquidate it on the spot and use the funds for his working capital needs.

Answers to GroFin's Islamic Finance

FAQs

How is Islamic financing different from conventional financing?

The most important difference between Islamic and conventional financing is the prohibition of interest in Islamic financial transactions. Islamic financing activity is based on the trading principle of buying/selling assets.

What are the basic rules of Islamic finance?

Forbiddance of Interest (Riba) –
Interest must not be charged or paid on any financial transaction as it is deemed unlawful

Restriction on Uncertainty (Gharar) –
Excessive uncertainty in contractual terms and conditions is forbidden

Prohibition of Forbidden Activities –
Gambling, liquor, pork, hoarding, speculation, etc. are deemed unlawful

Profit & Loss Sharing Mechanism –
Both parties in a financial transaction must share the risks and rewards of the transaction

Is Islamic Finance meant for Muslim entrepreneurs only?

No, Islamic finance can be availed by any entrepreneur, regardless of religious beliefs.

How does GroFin ensure that its activities are Shariah compliant?

GroFin has a Sharia Compliance Officer who is a Chartered Professional in Islamic Finance, and also employs a separate independent Shariah scholar. Both serve to ensure that GroFin’s products and its activities comply with Islamic rules at all times.

Does GroFin hold Sharia approval (Fatwa) for its Islamic financing product?

Yes, GroFin has obtained the requisite Shariah approval from the General Iftaa’ Department of Jordan to deal in the Islamic product.

Value-addition through Waste Paper “Moving from trading to value-addition in used and waste paper was a challenging task, and one that I could not possibly have undertaken alone. GroFin’s finance and support helped me at every step of the way, be it in setting up the plant, formalising the new structure or finalising agreements with paper producers,” - Mostafa Ibrahim Kotb, Founder, El Nour El Nour - Egypt Father & Son team manufacture Thermostone Blocks “GroFin provided capital investment for Noor El Qamar when our start-up could not access finance or support from traditional financial institutions. We are now well placed to replace expensive imports with high quality local products that are customised to the domestic market,” - Abdul-Ameer Al Hoshan, Noor El Qamar Noor El Qamar - Iraq Vital services in the supply chain “GroFin’s finance and support have been vital to our continued role in the oil and gas supply chain. Their assistance with market linkages, recruitment of Omani staff and managing our financials have taken this business to the next level,” - Maktoom Saad Al Mahri, MTC Maktoom Trading & Contracting (MTC) Company - OMAN Touching the lives of Syrian refugee children in Jordan With GroFin’s finance and support, we have been able to touch the lives of many more children, especially from the refugee population. This makes a world of difference to such children, who otherwise face bleak educational prospects” Mrs Mady, Al-Menber School Al-Menber School - Jordan Manufacturing Relationships – Distributing Quality “Our partnership with GroFin has given us access to finance as well as business support, which has taken Stick Pack to new heights.” Mahmoud Mostafa Stick Pack – Egypt

  • About Nomou-MENA
    • The Nomou Programme
    • Supporting Entrepreneurs
    • MENA Region
    • Why MENA?
    • Nomou Structure
    • Country Funds
    • The Nomou Team
  • Entrepreneurs
    • Nomou Funding & Business Support
    • How Nomou Works
    • Where Nomou Operates
    • Business Support from GroFin
  • Investors
    • Investors & Business Support Funders
    • Country Funds
    • Supporting Syrian Refugees
    • Impact at a glance
    • Development and Impact
    • Local Partners
  • Islamic Finance
    • About Islamic Finance
    • Islamic Finance at GroFin
    • FAQs
  • Apply for Finance
Copyright © 2018 GroFin Managers | Terms of Use | Privacy Policy
  • About Nomou-MENA
    • The Nomou Programme
    • Supporting Entrepreneurs
    • MENA Region
    • Why MENA?
    • Nomou Structure
    • Country Funds
    • The Nomou Team
  • Entrepreneurs
    • Nomou Funding & Business Support
    • How Nomou Works
    • Where Nomou Operates
    • Business Support from GroFin
  • Investors
    • Investors & Business Support Funders
    • Country Funds
    • Supporting Syrian Refugees
    • Impact at a glance
    • Development and Impact
    • Local Partners
  • Islamic Finance
    • About Islamic Finance
    • Islamic Finance at GroFin
    • FAQs
  • Apply for Finance
Nomou-MENA website