Certified Expert in Islamic Microfinance

• An interactive e-learning course including video lectures, PDF scripts, examples, practical exercises, online tests and case studies.
• A discussion forum for course related issues as well as for exchange of opinions and experiences with, tutors, peers and the FSDF e-Campus team.
• Personalized support from your e-Campus team.
• The possibility to achieve a Frankfurt School certificate after passing the final exam or a confirmation of course completion after completing the course.
• An international network of institutions hosting our final exam all over the world.

Final exam fee: 50 EUR (to be paid directly to the final exam host).

Certificate fee: After passing the final exam you will receive a digital certificate. Should you wish to receive a hard copy of your certificate as well, an additional administrative fee of EUR 50 will be charged.

Discounts:

• 10% group discount (for 5 or more participants working for the same instutiton)
• 10% for FS Alumni

Payment Options

• Bank Transfer (bank fees to be covered by the participants)
• Credit Card
• PayPal

Payment in instalments is unfortunately not possible.

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. 

The course takes approx. 6 months assuming 3-4 hours of self-study per week. It consists of 7 units which build upon each other. You will take the units in sequence and will  need to pass an online multiple choice test before accessing the next unit.

Unit 4 and Unit 6 include an assignment which you will need to submit at a fixed deadline.

You are not sure if you manage to complete the course within 6 months? No worries! You can apply for a course extension (6 more months) against an administrative fee.

Islamic finance is a term that reflects the financial transaction that is not contradictory to the principles of Sharia. The underlying principles are different from conventional finance. It is against this backdrop that all Islamic financial transactions involve a form of trading, leasing and investment activities. These Islamic financial transactions are primarily based on instruments that are agreed upon by the majority of scholars.

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:

1. Examine the principles and history of Islamic economics and finance, evaluate the concepts of Sharia-based and Sharia-compliant finance and reflect about its critiques

2. Distinguish between conventional debt-financing and the key Islamic financing mechanisms

3. Recognise the fundamentals of Islamic Commercial/Contract Law

4. Identify the key Islamic Financial Products

5. Explain the strengths and weaknesses of the Islamic finance industry, its key actors, stakeholders, and the role of the Islamic microfinance sector

The Islamic transaction law provides “Equity-based Financing” as a mode of financing in Islamic finance and banking.

For the majority of the scholars, equity-based financing or Partnership-based financing is the preferred Islamic finance instrument. This is based on the fundamental principle of interest-free banking.

Unit 3 will demonstrate how profit & loss sharing, equity investments and venture capital instruments are used in the Islamic microfinance sector. Course participants will learn to:

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

Risk management is at the heart of any financial intermediation process and of enormous importance for the financier/ Islamic MFI within an Islamic financial framework where returns are not guaranteed. This unit will introduce the idea of risk management and mitigation and discuss in particular key operational, financial and Sharia risks. It will further discuss the concept of portfolio management and introduce a number of key metrics to assess the riskiness of various Islamic financing tools and how they are mitigated operationally. Course participants will learn to:

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

Building on the opening unit, the units 2 and 3 will introduce the main financing contracts used in the industry. In unit 2, the concepts and Islamic financial instruments of Qard (loan), trade based debt instruments such as Murabaha, Salam, Istisna’a, and lease based instruments such as Ijarah are covered. These instruments are defined and further elaborated with their concrete application as modern microfinance tools. Course participants will learn to:

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

Whilst many aspects of managing Islamic microfinance operations are likely to be comparable or very similar to conventional counterparts, this unit introduces the whole financing cycle from appraisal, disbursement to recovery within an Islamic financing framework. Course participants will learn to:

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

This unit will focus on the definitions, components, and the criteria for regulatory, governance and Sharia compliance frameworks as applicable to different legal structures that Islamic MFIs usually take. A general overview of regulatory dimensions for microfinance, although these vary from jurisdiction to jurisdiction, will be provided, with specific attention to I-MFIs operating outside regulatory frameworks that recognise Islamic financing.

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. Course participants will learn to:

1. Differentiate between different corporate governance requirements for the different types of Islamic MFIs

2. Identify the particular regulatory dimensions of relevance to Islamic MFIs (subject to in-country jurisdiction) and recognise their implications for corporate governance

3. Outline the role and importance of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB)

4. Identify Shariah non-compliance risks, the pillars of Shariah Governance and technicalities of Shariah audit in the Islamic microfinance arena.

5. Differentiate between various types of Shariah audits, reviews, and compliance tests with the aim of enabling participants to gain a better understanding of the nature and the operations of how Shariah non-compliance risks can be managed.