New ratings scheme launched for Islamic endowments

Manama : A new ratings scheme for Islamic endowments or awqaf was launched yesterday jointly by agencies in Bahrain and Malaysia as part of their efforts to modernise the sector and to unlock large pools of capital.  

The scheme was launched jointly by Bahrain-based Islamic International Rating Agency (IIRA) and Malaysia-based International Institute of Islamic Waqf (IIIW) after signing a Memorandum of Cooperation (MoC) in Manama yesterday.

“It will be a critical step forward in efforts to establish greater accountability in the management of awqaf assets and serve as a major driving force in integrating Waqf organisations into Islamic financial markets thereby mobilizing a massive and largely idle pool of Islamic capital,” said Faheem Ahmad, President- Strategic Planning and Global Relationships at IIRA.

The move is expected to unlock assets which are estimated to be anywhere between USD100 billion to USD1 trillion, a statement released said. 

The Memorandum of Cooperation (MoC) includes provision of rating services, capacity building and the enhancement of transparency and standardisation across the Waqf sector in both Muslim and non-Muslim countries. 

Cooperation between the organisations will include joint efforts in strengthening human capital across charitable Waqf organisations and foundations globally through seminars, conferences, training programmes and workshops.

“Our aim, to jointly establish an Awqaf rating, will help financial, regulatory and international organisations better understand the Waqf industry,” said Anas Al Dowayan, CEO of IIIW. 

He added: “From this cooperation, we expect that we can help to unlock the great untapped value that exists within distressed Awqaf assets by helping to put in place well-structured Shariah compliant financial products that help Waqf beneficiaries and the Islamic finance markets.” 

Commenting, Sabeen Saleem, CEO of IIRA, said, “As a rating agency dedicated to Islamic finance and with a clear focus on governance practices as a foundation of third party assessment, Waqf ratings are a natural next step for IIRA. Waqf assets represent tremendous reserves which can be unlocked for further development and inclusion in mainstream financial markets. IIRA plans to act as a catalyst to this development with its assessments in this sector.”