MADISON, Wis. The World Council of Credit Unions has published what it believes to be the first-ever known guide to establishing Shariah-compliant credit unions.
The “Islamic Finance Manual: Operating Policies and Procedures for Credit Unions” was developed by the Customer Owned Banking Association, World Council’s member organization in Australia, and is based on WOCCU’s experience in establishing Islamic investment and finance cooperatives in Afghanistan from 2004-2012.
According to WOCCU, the guide details operating policies and procedures based on international standards for financial cooperatives and adapted to comply with Islamic Law. The 305-page document addresses membership, shares and savings mobilization, Shariah-compliant financing and collection, provisions and allowances for bad debts, ALM, capitalization and capital adequacy, and more. Each chapter includes a comprehensive review of procedural requirements and who should be involved, including template forms and contracts.
