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Newsletters
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| Summer 2009 |
Deal inked to launch new halal-approved MasterCard®
A deal between UM Financial and prepaid credit card provider Mint Technology Corp. (TSX VENTURE:MIT) means Canada’s first halal-approved MasterCard® is on its way to becoming reality. The card will be offered to Canada’s Muslim community as a secure, versatile, convenient and rewarding alternative to cash, debit cards and conventional credit cards.
Mint will provide the cards and UM Financial will market the product online and at community events.
Credit card debt can be lethal for the financial stability of ordinary individuals and families, noted UM Financial president and CEO Omar Kalair. As a cash card, the new product will allow users to avoid the debt trap, he said.
“Canadians will now be able to adopt the responsible, interest-free lifestyle UM Financial promotes, by living within their means and not ever having to worry about high credit card interest rates while enjoying the convenience and security offered by MasterCard®,” Kalair said.
He added: “By working with Mint and its 99 per cent approval rate, we feel our card is well-positioned to serve the day to day needs of Canadians specifically Muslim and immigrant communities.”
Mint CEO Chris Hogg said this deal offers an “enormous opportunity” for his company.
“The Muslim population in Canada is currently approximately one million and in the last three decades has been doubling every 10 years,” he said. “The majority of immigrants coming to Canada classified by religion are Muslims, and Islamic finance is a growing segment that can be tapped into.” >>Read full press release |
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ALSO in this issue:
#What is a Registered Education Savings Plans (RESP)?
By Asad Ullah Khan (AICB PFP), Senior VP Investor Relations The Federal Government provides an incentive for parents to save for a child's post-secondary education by paying a grant based on the amount contributed to an RESP for the child. The CESG money will be deposited directly into the child's RESP.
No matter what your family income is, HRSDC pays a basic CESG of 20% of annual contributions you make to all eligible RESPs for a qualifying beneficiary to a maximum CESG of $500 in respect of each beneficiary ($1,000 in CESG if there is unused grant room from a previous year), and a lifetime limit of $7,200.
HRSDC will also pay an additional CESG amount for each qualifying beneficiary. The additional amount is based on your net family income and can change over time as your net family income changes.
For 2008, the additional CESG rate on the first $500 contributed to an RESP for a beneficiary who is a child under 18 years of age is: - 40% (extra 20% on the first $500), if the child's family has qualifying net income for the year of $37,885 or less; and
- 30% (extra 10% on the first $500), if the child's family has qualifying net income for the year that is more than $37,885 but is less than $74,769.
However, since the CESG has been designed to encourage long term savings for post-secondary education, there are specific contribution requirements for beneficiaries who attain 16 or 17 years of age. RESPs for beneficiaries 16 and 17 years of age can only receive CESG if at least one of the following two conditions is met: - a minimum of $2,000 of contributions has been made to, and not withdrawn from, RESPs in respect of the beneficiary before the year in which the beneficiary attains 16 years of age; or
- minimum of $100 of annual contributions has been made to, and not withdrawn from, RESPs in respect of the beneficiary in at least any four years before the year in which the beneficiary attains 16 years of age.
This means that you must start to save in RESPs for your child before the end of the calendar year in which the beneficiary attains 15 years of age in order to be eligible for the CESG. The CESG and accumulated earnings will be part of the educational assistance payments paid out of the RESP to the beneficiary. If the beneficiary does not pursue post-secondary education, the CESG is returned to the government. Canada Learning Bond An additional incentive of up to $2,000 to help modest-income families start saving early for their child's education after high school (post-secondary education). The Canada Learning Bond (CLB) money will be deposited directly into the child's RESP.
For families entitled to the National Child Benefit (NCB) supplement for their child, the CLB will provide an initial $500 to children born on or afterJanuary 1, 2004. To help cover the cost of opening an RESP for the child, HRSDC will pay an extra $25 with the first $500 bond. Thereafter the CLB will also pay an additional $100 annually for up to 15 years for each year the family is entitled to the NCB supplement for the child.
If the beneficiary does not pursue post-secondary education, the CLB is returned to the government.
For more information on the Canada Education Savings Program, call 416.424.4100 x112. |
#World Finance magazine award for UM The UK-based World Finance Magazine has named UM Financial president and CEO Omar Kalair North America’s “Best Business Leader” in Islamic Finance. The World Finance Awards, offered by the magazine, were created to identify industry leaders, individuals, teams and organizations that represent the benchmark of achievement and best practice in the financial and business world. The awards panel is led by World Finance editor Alexander Redcliffe and uses a wide range of criteria, as well as the critical eye of a collective 180 years of financial journalism, to establish guidelines for voters to consider. These include innovation, originality and quality of product, proof of market development and excellence in client representation. |
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#UM Financial and Jovian to explore halal investment product
UM Financial has partnered with Jovian Capital Corporation (TSX:JOV) to explore the launch of a co-branded halal investment product. The product would be an Exchange Traded Fund (ETF) based on the new S&P/TSX 60 Shariah Index.
The announcement on May 27, 2009 coincided with the launch of the Index, which excludes the stocks of businesses that operate in haram or Islamically inappropriate products, such as alcohol, entertainment, financial services, pork-related products as well as tobacco.
Omar Kalair, president and CEO of UM Financial, said he is “very excited” about partnering with Jovian on a product that can offer a much-needed, Canadian-based halal investment product.
Jovian believes the product will be popular in Canada and abroad, CEO Philip Armstrong said.
"We are very pleased to partner with UM Financial on this exciting new venture," he said. "We feel that a product designed for Muslim investors will have broad appeal in Canada and elsewhere.”
>>Read full press release |
| #Special thanks to Central 1 Credit Union Central 1 Credit Union has been presented with an award from UM Financial to thank the institution for supporting the initiative to offer halal home financing to Canada’s Muslim community. Between May 2005 and May 2009, the credit union system has invested nearly $100 million in UM Financial’s interest-free home financing program, resulting in over $10 million in profits for Central 1. There have been no delinquencies or defaults thus far. UM Financial looks forward to working with the credit union system to once again offer halal home financing to Canada’s rapidly growing Muslim community. |
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#In the News: Canadian Business Magazine (July 20, 2009)
Banking: Islam waits
As Ottawa mulls licences for Islamic-focused banks, is Canada falling behind?
By Jeff Sanford …And others in the Islamic finance sector suggest there is no rush to hand out a banking license. Among them is Omar Kalair, the president and CEO of UM Financial Inc., a company that offers Islamic mortgages and is proposing a new Islamic ETF. UM Financial doesn’t have a banking licence. It offers its services through an agreement with an existing financial services company, Central 1 Credit Union, which provides capital to UM…But as one of the first movers in this space in Canada, Kalair would like to see more development of the market first, before a stand-alone bank is approved. “The market is not yet ready for this,” he says. “The fact that the big Canadian banks are not yet offering these services suggests that.” Kalair assumes the applications with Finance are mainly offshore Mideast groups hoping to set up shop here….
>>Read full article |
| #In the News: World Finance Magazine (July-August 2009) Islamic Finance in Canada
UM Financial Group, Canada’s premier Islamic Financial institution …Kalair says: “The hallmark of Islamic banking is the prohibition of interest-taking. Yet, to brand interest-free banking as Islamic banking exclusively is a misnomer. The prohibition on interest is not only Islamic, it is monotheistic. Before Islam, this prohibition has existed in all monotheist religions including Judaism and Christianity. Any initiative which implements interest-free banking should appeal equally to Judaism and Christianity.”
Kalair sees the appeal of Islamic Finance as having a broader demographic than Joe Average may imagine, due to it being ethically, socially and religiously responsible. Yet this is to look at the investing world in terms of religion rather than nationality. Take the geographical spread, for example. Islamic Finance is spreading fast and garnering local attention in Canada as well as cross-continental attention, particularly in Europe and the Far East. The UK, France, Germany and Italy have been pro-active and accommodating in their approach, while South Korea and Singapore are just starting to follow Indonesia and Malaysia.
In the UK, in the Islamic Bank of Britain, non-Muslims have opened accounts, knowing that they are Shari’ah compliant and avoid interest-based debt.
>>Read full article (PDF)
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#UM helps sister fund daycare project
Recently, a Muslim sister was in need of funding a second daycare in Mississauga. Keeping the free in Riba-Free was the most important thing for this sister. With this funding line, she was able to set up another business. Br. Asad Ullah Khan of UM Investment said: “Through our Real Estate Investment fund, we were able to help out a client who was looking to provide a much needed service to the community of Mississauga."
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