Introduction to Al Mudarabah Partnership in Islamic Finance
Al Mudarabah is a type of partnership in Islamic finance where one partner provides the capital (Rab-ul-Maal) while the other manages the business (Mudarib). The profits are shared based on a predetermined ratio. There are two types of Al Mudarabah - Restricted and Unrestricted, giving varying levels of control to the Rab-ul-Maal. The roles of Ameen, Wakeel, Shareek, Zamin, and Ajeer in this partnership model ensure accountability and fair distribution of profits and losses.
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Presentation Transcript
Importance of Savings in Europe and discrepancies from one country to another 32nd IUHF World Congress 2024 - 18 September 2024 Gr goire NAACKE Director of the OEE
SUMMARY 1. Various types of savings and countries of focus 2. Ranking by households saving rate and role of the welfare state 3. Saving behaviours and housing market 4. Saving and indebtedness 5. Conclusion 32nd IUHF World Congress 2024 2/8
VARIOUS TYPES OF SAVINGS AND COUNTRIES OF FOCUS Three types of motivations for households saving: to finance projects, we refer to project savings; to cope with unexpected expenses, we refer to precautionary savings; or to build up additional income for retirement, we refer to retirement savings. 1. 2. 3. Focus on European countries with various institutional structures of pension schemes: The Netherlands, with well-developed private pension funds; 1. Sweden, with reliance on both public system and private pension funds; and 2. Belgium, Germany, France, Italy and Spain, where the public system is contributory and significant, with minimal intervention from private pensions funds. 3. 32nd IUHF World Congress 2024 3/8
RANKING OF COUNTRIES BY DECREASING HOUSEHOLD SAVING RATE AND WELFARE STATE INDICATORS 40% 36% 35% 32% 32% 31% 30% 30% 28% 28% 25% 22% 21% 20% 17% 17% 16% 15% 15% 15% 12% 12% 12% 10% 9% 10% 8% 6% 5% 0% NL DE SE FR BE ES IT Household saving rate Social protection expenditure in % of GDP (2) Public pension spending in % of GDP (1) Source: Eurostat, OECD - Compilation and calculation by OEE - (1) 2020 for FR & UK, 2019 for NL, DE, SE, BE, ES & IT 4/8
HOUSEHOLD SAVING RATE AND HOUSING MARKET 80% 76% 74% 73% 71% 70% 70% 64% 64% 64% 63% 57% 57% 60% 51% 50% 47% 43% 40% 30% 22% 21% 17% 20% 17% 15% 12% 8% 10% 0% DE FR SE NL BE IT ES Household saving rate Home ownership rate Share of non-financial assets in household net financial wealth Source: Eurostat - Compilation and calculation by OEE 32nd IUHF World Congress 2024 5/8
GROWTH RATE OF HOUSE PRICE INDEX FOR PURCHASES OF EXISTING DWELLINGS 93% 100% Last 14 years Last 10 years Last 5 years 80% 60% 40% 27% 16% 20% 12% 10% 8% 8% 7% 6% 5% 5% 3% 1% 1% 0% -1% -1% -1% -1% -2% -2% -4% -7% -11% -11% -20% -40% EU BE DE ES FR IT NL SE Source: Eurostat - Compilation and calculation by OEE - Reference year 2024 32nd IUHF World Congress 2024 6/8
HOUSEHOLDS' OUTSTANDING AMOUNT OF LOANS PER CAPITA (2024 Q1 - K /INHABITANT) 60 1.4 Housing loans Consumer loans 50 40 7.4 30 1.6 56.4 3.3 2.9 20 36.0 27.6 2.4 3.0 22.6 22.5 10 11.8 10.3 0 NL SE BE FR DE ES IT Source: ECB, Eurostat, Statistics Sweden - Estimation, compilation and calculation by OEE 32nd IUHF World Congress 2024 7/8
CONCLUSION Three groups of countries: Southern Europe countries, with an important role played by the welfare state, a high replacement rate offered by the public pension system, and where households save less money, are less indebted and concentrate most of their wealth on real estate. 1. Northen Europe countries, with private pension funds, low replacement rate offered by the public pension system and where households save more money, have more loans and concentrate a lower share of their wealth on non-financial assets. 2. In the middle, Germany, France and Belgium, where households mainly rely on public pension system for their retirement, but also tend to save money, in part to finance projects, but also probably in part for the purpose of supplementing retirement income. 3. 32nd IUHF World Congress 2024 8/8
