MICROCAPITAL BRIEF: Islamic Finance Advisory & Assurance Services, Mercy Corps to Study Feasibility of Shariah Financial Products in Ethiopia

US-based NGO Mercy Corps recently hired Islamic Finance Advisory & Assurance Services (IFAAS), a UK-based consultancy, to support financial inclusion efforts in Ethiopia by conducting a “comprehensive assessment of the Ethiopian financial industry, including banking, insurance and microfinance.” The goal is to use the results to address economic and policy barriers to the development of Shariah-compliant financial services. Islamic law, also known as the Shariah, prohibits traditional interest charges, which are often replaced with a profit-sharing arrangement. IFAAS reports that Muslims in Ethiopia are less likely than others in the country to use financial services.

Established in 2007, IFAAS offers governmental, institutional, and personal consultative services regarding Islamic finance. In addition to the UK, the company has offices in Bahrain, France, Morocco and Pakistan. Since its founding, IFAAS has conducted projects in approximately 40 countries, developed 150 Islamic financial products and audited the Shariah compliance of assets valued USD 3 billion.

Established in 1979, Mercy Corps provides disaster-relief, health and other services intended to enable social and economic development in approximately 40 countries. It served 22 million people in 2017. For the 12 months ending in June 2018, the NGO reported revenue of USD 471 million. During 2018, Mercy Corps received EUR 38 million (USD 43 million) from the UK’s Department for International Development (DFID).

By Umit Naz Deryaoglu, Research Associate

Sources and Additional Resources

IFAAS press release
http://ifaas.com/ifaas-and-mercy-corps-join-hands-to-promote-financial-inclusion-in-ethiopia.html

IFAAS homepage
http://ifaas.com

Mercy Corps homepage
https://www.mercycorps.org

Mercy Corps 2018 financial report
https://www.mercycorps.org/sites/default/files/2018_Audited_Financial_Statement.pdf

Ethiopia’s country profile
https://databank.worldbank.org/data/views/reports/reportwidget.aspx?Report_Name=CountryProfile&Id=b450fd57&tbar=y&dd=y&inf=n&zm=n&country=ETH

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