On Saturday evening, 12 April, Fairbain Café in collaboration with Old Mutual Wealth hosted a gathering of key stakeholders, including several members of the local Ulama to spotlight the significance of Shari’ah-compliant banking, investment, and its growing relevance within South Africa’s financial sector.
Among the speakers at the event was Moulana Muhammad Carr, Co-Imam at the Auwal Masjid in Bo-Kaap, who highlighted the Islamic imperative of avoiding interest (Riba).
“To avoid Riba is very important from an Islamic perspective,” explained Carr.
“For something to be considered Shari’ah-compliant, there are certain pre-emptive qualities or undesirables that must be identified and right on top of that list is Riba. It is not just an undesirable; it is the ultimate undesirable in Shari’ah compliance.”
“We must be conscious of Allah in everything we do, even with our finances. And I can guarantee you that the Shari’ah-compliant alternative, in whatever you are dealing with, by the word of Allah SWT, is the better alternative,’ he added.
Portfolio Manager at Old Mutual Investment Group Fawaz Fakier offered insights into the process involved in ensuring Shari’ah compliance.
“There are two tests that are done to consider whether an entity is Shari’ah complaint or not: a qualitative test and a quantitative test.”
He explained that the qualitative test immediately excludes shares linked to alcohol, gambling, adult entertainment, tobacco, and weapons, among others. While the quantitative test uses ratios set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
Fakier outlined five core pillars of Islamic finance:
• Prohibition of Riba (interest)
• Tayyib (goodness) – investments must offer social and ethical value
• Avoidance of harmful industries and activities
• Risk-sharing – profits and losses must be fairly distributed
• Avoidance of speculation – prioritizing transparency and ownership
Old Mutual Wealth has partnered with Albaraka Bank to ensure that their investments are not only financially sound but also spiritually and ethically grounded.
Fakier noted Old Mutual’s partnership with Albaraka Bank, which has a board of experts and scholars responsible for ensuring full Shari’ah compliance.
“They guide us on what is Halal and Haram,” he said.
Together, Old Mutual Wealth and Albaraka Bank offer a range of Shari’ah-compliant funds spanning various asset classes:
• Old Mutual Albaraka Income Fund
• Old Mutual Albaraka Balanced Fund
• Old Mutual Albaraka Equity Fund
• Old Mutual Global Islamic Equity Feeder Fund
For those interested in exploring Shari’ah-compliant investment options or reviewing the list of equities these funds engage with, visit www.oldmutualinvest.com/shariah.
VOC News
Photos: VOCfm
