Certified Expert in Islamic Microfinance - Lehrgang von Frankfurt School of Finance & Management gGmbH

Unit 1: Overview of Islamic Economics & Microfinance System

The opening unit for the course is critical in establishing the overall parameters of the CEIM qualification. It seeks to provide a high-level overview of the philosophy/ontology underpinning Islamic economics & finance and the key constituent elements such as legal principles, institutions and products. Course participants will learn to:

Unit 2: The Microfinance Contracts & Transaction Agreements (Part 1)

1. Assess the difference between Islamic loan, trade, lease based transactions and interest-bearing instruments

2. Examine the Sharia rules for Qard Hassan, Murabaha, Salam, Istisna’a and Ijarah based on the standards set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)

3. Evaluate and apply the key contractual elements for a valid transaction as microfinancing tools

4. Recognise the practicalities and limitations of application within the sector

Unit 3: The Microfinance Contracts & Transaction Agreements (Part 2)

1. Explain the concept of Musharaka in Islamic transactions and understand the different types of Partnership

2. Examine the Sharia rules for Musharaka & Mudaraba based on the standards set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)

3. Explain the use of Musharaka contracts in modern corporations

4. Explain how Musharaka & Mudaraba are used in modern Islamic banking

5. Evaluate and apply the key contractual elements for a valid transaction as microfinancing tools

6. Recognise the practicalities and limitations of application within the sector.

Unit 4: Managing Islamic Microfinancing

1. Analyse the difference between individual and group financing models and identify the operational and Sharia challenges

2. Explain the financing cycle from appraisal, disbursement to recovery

3. Apply key client appraisal techniques, carry out critical client financial analysis and calculate repayment/profit sharing ratios and schedules

4. Identify key characteristics of and employ best practice processes for financing decision-making

5. Identify the efficacy of financing management techniques within an Islamic economic framework, including different approaches to collateralisation, monitoring and the handling of delinquency

Unit 5: Risk Management in Islamic Microfinance Institutions

1. Distinguish between operational and financial risks and to explain the concept of risk governance

2. Examine different operational risks and identify appropriate mitigation strategies including internal controls

3. Examine different financial risks and identify appropriate mitigation strategies

4. Appraise portfolio risks and calculate metrics for risk measurement

5. Identify appropriate portfolio risk mitigation strategies including loan loss provisioning

Unit 6: Regulatory, Governance and Sharia Compliance Framework for Islamic Microfinance

The concept of Sharia compliance will be discussed and the implications for management and governance in line with the industry best practices and according to the Standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) will be outlined.

Unit 7: Financial and Social Performance Management

1. Examine institutional financial reports such as balance sheets & income statements and apply financial ratios to measure various financial performance indicators

2. Examine portfolio reports and evaluate the efficacy of certain indicators to measure financial performance

3. Identify key social performance indicators and appraise some of the key social performance standards

4. Describe the salient features of ethical, social responsibility and impact investment and its potential for the Islamic microfinance sector

5. Apply tools to manage financial and social performance

In this course you will learn the principles of Islamic finance and the major financing mechanisms and products within Islamic microfinance. The course will enable you to develop a thorough understanding of the risk landscape and risk mitigation strategies. Furthermore, regulatory, governance and Sharia compliance frameworks for Islamic microfinance will be discussed and analysed.

By the end of this course students will be able to:

1. Understand the principles of Islamic finance and recognise the distinctness of some of the major financing mechanisms and products used in the Islamic microfinance sector.
2. Apply/Demonstrate the ability to carry out client appraisals
3. Apply/Demonstrate the ability to analyse microfinancial performance information and employ the necessary tools
4. Recognise the areas and issues critical for risk management
5. Explain the key parameters for Regulatory, Governance and Sharia Compliance Frameworks for Islamic Microfinance

This course is targeted towards microfinance and development professionals who are working in areas such as microfinance, Islamic microfinance, and end-user finance, or towards participants who want to explore Islamic microfinance. This includes staff from the following organisations, at either the operational level or the management level:

• Faith-based NGOs and non faith-based NGOs
• Islamic microfinance institutions
• Microfinance institutions
• Retail banks interested in downscaling
• Social/impact investors
• Banking training institutes

Other interested parties are of course also welcome to register for the course, such as:

• Auditors
• Consultants
• Central bankers
• Staff members of apex institutions
• Students (preferably with a banking/finance background)

Operational experience from the conventional microfinance sector or the Islamic finance sector is not necessary but is considered as an asset.