MICROCAPITAL BRIEF: World Council of Credit Unions Publishes Islamic Operations Manual for Shariah-compliant Credit Unions

The World Council of Credit Unions (WOCCU), a US-based association of credit union trade groups in 54 countries, recently published the “Islamic Finance Manual: Operating Policies and Procedures,” a guide that is intended to assist bankers with establishing Shariah-compliant credit unions in developing countries. The Shariah, which is alternatively referred to as “Islamic law,” prohibits interest payments and fees, so Islamic banking is centered instead on the concept of joint venture and profit sharing. The manual was developed by the Customer Owned Banking Association (COBA), an Australia-based member organization of WOCCU, based on COBA’s experience establishing Islamic investment and finance cooperatives in Afghanistan since 2004.

The guide is intended to provide operating policies and procedures based on international standards for financial cooperatives and to comply with Islamic law. It addresses “membership, shares and savings mobilization, Shariah-compliant financing and collection, provisions and allowances for bad debts, asset and liability management, capitalization and capital adequacy, accounting, cash operations, internal controls, human resources, procurement and information technology and security.” Each chapter includes a review of procedural requirements as well as template contracts and forms.

The manual is available online from WOCCU’s website by clicking on the following link: http://www.woccu.org/documents/WORLD_COUNCIL_Islamic_Finance_Manual

By Makai McClintock, Research Associate

About the World Council of Credit Unions (WOCCU)
Established in 1971, The US-based World Council of Credit Unions (WOCCU) is a trade association and support agency for credit unions. WOCCU advocates before governments international organizations on behalf of 44 credit union member trade groups operating in 54 countries. Its technical assistance programs introduce tools and technologies intended to strengthen the financial performance of credit unions and increase their outreach. WOCCU consists of three entities: (1) WOCCU Incorporated, a nonprofit trade association; (2) WOCCU Services Group, which functions as a for-profit corporation; and (3) The Worldwide Foundation for Credit Unions, which serves as a charitable organization. WOCCU reported total assets of USD 14.4 million in its 2011 annual report.

Sources and Additional Resources

WOCCU News Release, “World Council Announces First Islamic Finance Manual for Credit Unions,” http://allafrica.com/stories/201307291891.html?page=2

WOCCU Manual, “Islamic Finance Manual: Operating Policies and Procedures,” http://www.woccu.org/documents/WORLD_COUNCIL_Islamic_Finance_Manual

MicroCapital.org story, October 23, 2012, “MICROCAPITAL BRIEF: World Council of Credit Unions, Boom Financial to Offer Mobile Banking to Credit Unions Worldwide,” https://www.microcapital.org/microcapital-brief-world-council-of-credit-unions-boom-financial-to-offer-mobile-banking-to-credit-unions-worldwide/

MicroCapital.org story, May 25, 2012, “MICROCAPITAL BRIEF: World Council of Credit Unions’ Young Credit Union People (WYCUP) Scholarship Applications Due June 1, 2012,” https://www.microcapital.org/microcapital-brief-world-council-of-credit-unions-young-credit-union-people-wycup-scholarship-applications-due-june-1-2012/

MicroCapital.org story, December 9, 2011, “MICROCAPITAL BRIEF: World Council of Credit Unions (WOCCU) to Expand Financial Services in Colombia with USD 2.5 Million Program,” https://www.microcapital.org/microcapital-brief-world-council-of-credit-unions-woccu-to-expand-financial-services-in-colombia-with-2-5m-program/

MicroCapital.org story, June 8, 2009, “MICROFINANCE EVENT: World Council of Credit Unions (WOCCU) Annual Conference, Barcelona, July 26-29, 2009,” https://www.microcapital.org/microfinance-event-world-council-of-credit-unions-woccu-annual-conference-barcelona-july-26-29-2009/

MicroCapital Universe Profile: World Council of Credit Unions (WOCCU)
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=World+Council+of+Credit+Unions+%28WOCCU%29

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