Center of Islamic Banking and Economics

Press Release

Islamic Agricultural Finance can be utilized as tool of Financial Inclusion: Zubair

Mughal
Islamic Agricultural Finance is an Ideal Product for the Development of Rural Economy

15th April, 16 (Lahore) The agriculture sector lacks financial resources, due to which small-scale farmers
are facing a lot of problems, consequently affecting the agriculture and livestock sector. But in Muslim
countries including Pakistan, the primary reason behind the lack of financial inclusion in the agricultural
sector is unavailability of such financial products that are in correlation with the religious and social
belief of the Muslims and if we want to promote agriculture and livestock then we have to introduce
such financial products which are in accordance with their religious beliefs, therefore, the use of Islamic
Agriculture Finance is necessary for the development of rural economy especially in Muslim majority
countries. These thoughts were expressed by Mr. Muhammad Zubair Mughal, the Chief Executive Officer
of Al Huda Center of Islamic Banking and Economics in a seminar in Expo Center Lahore, Pakistan which
is organized by US-Pakistan Partnership for Agricultural market Development (AMD) USAID.
He said, we can retrieve ideal Islamic agricultural finance products from Islamic Banking and Finance
industry, by utilization of those products we can bring revolution in the agriculture sectors, these
products will not only boost the rural economy but also can enhance the agricultural business; expand
the livestock industry, generate employment, education & health facilities for the farmers etc. The
people who are financially excluded and don't use conventional financing system because of interest and
other religious reasons, will also start using agricultural finances, therefore, we can say that Islamic
Agricultural finance can be utilized as tool of financial inclusion for the development of rural economies.
Further, he said that in some countries it is seen that people of rural areas are more sensitive to interest
related issues, and so the agriculture sector suffers the most. But in countries where Islamic Financial
products are available for agriculture industry, there the use of financial instruments is higher as
compared to other nations. If we study the Islamic Financial products in detail, we can observe that the
financial needs of the farmers can be fully catered by utilization of them, one of the best examples is the
use of "Salam" product in Islamic banking.
He further added that Accounting & Auditing Organization of Islamic financial institutions (AAOIFI) also
issued three(3) Sukuk structure Sukuk Al Muzaras , Sukuk Al Musaqaa, Sukuk Al Mugarasas which can
be utilized for Sharecropping, Irrigation and Orchid Financing respectively for the corporate farming.
Meanwhile many other Islamic Financing instrument are available which can be utilized for agricultural
purposes, such as, Murabaha can be utilize for Purchase of seed, fertilizer, harvesting and planting
equipments, agri. Inputs, tractor, pesticides, farming goods, Solar Tube-wells etc, while Salam is ideal

AlHuda CIBE FZ LLE

Head Office: P.O Box. 120867, Dubai - U.A.E, Ph: 00971 55 938 99 00
Pakistan Office: 160-B Ahmed Block, New Garden Town, Lahore + 92 (0)42 - 35913096 8
Email: info@alhudacibe.com Web: www.alhudacibe.com

Center of Islamic Banking and Economics

product for Agricultural Financing, through which a farmer can fulfill all the financial needs of the crop
circle e.g. liquidity, seed, pesticide, fertilizer, harvesting, irrigation, market linkages, Istisna may by utilize
for small manufacturing Business, dairy or Agri. production, Construction of warehouse and cold storage,
Rural entrepreneur Development, while Ijara is good for Leasing of Tractors, Agri. Equipment,
Threshers, Tub wells, small production unit lease, Sugarcane planter, Rice planter, harvesting vehicles etc,
Meanwhile, Farmer can utilize Musharaka, Mudaraba & Diminishing Musharaka for Rural housing, forest
development, agri. Inputs, farming, sprinkler/drip/solar pumps, tube wells, Microenterprise & SMES
setups, Agricultural Joint venture projects, Dairy and livestock development etc.
He mentioned that to ensure the safe guard and Risks of Agricultural and Livestock sector, Takaful
(Islamic Insurance) to ensure the risks of crops, livestock, orchids and different durable assets e.g.
tractors, Agri-inputs, harvesting and other instruments etc.

About AlHuda CIBE:

AlHuda Center of Islamic Banking and Islamic Economics (CIBE) is a well recognized name in Islamic
banking and finance industry for research, advisory and capacity building over the last ten years. The
prime goal has always been to remain stick to the commitments and provide state-of-the-art Advisory
Consultancy and Education through various well recognized modes viz. Islamic Financial Product
Development, Shariah Advisory, Trainings Workshops, and Islamic Microfinance and Takaful
Consultancies etc. Side by side through our distinguished, generally acceptable and known Publications
in Islamic Banking and Finance.
We are dedicated to serve the community as a unique institution providing Services not only in
UAE/Pakistan but all over the world. We have so far served in more than 25 Countries for the
development of Islamic Banking and Finance industry so far.
For further Details about AlHuda CIBE, please visit: www.alhudacibe.com

For Media Contact:

Ms. Shaguftta Perveen
Manager Communications,
shaguftta.perveen@alhudacibe.com

AlHuda CIBE FZ LLE

Head Office: P.O Box. 120867, Dubai - U.A.E, Ph: 00971 55 938 99 00
Pakistan Office: 160-B Ahmed Block, New Garden Town, Lahore + 92 (0)42 - 35913096 8
Email: info@alhudacibe.com Web: www.alhudacibe.com