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CORPORATE LEGAL COUNSEL CONFERENCE - 2012

Cooperative Micro-finance (CMF) The Role of Corporate Legal Counsel Towards Its ( CMF ) Socio-economic Goals. CORPORATE LEGAL COUNSEL CONFERENCE - 2012 “Meeting the new challenges of your role as a corporate legal counsel”.

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CORPORATE LEGAL COUNSEL CONFERENCE - 2012

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  1. Cooperative Micro-finance (CMF)The Role of Corporate Legal Counsel Towards Its (CMF)Socio-economic Goals CORPORATE LEGAL COUNSEL CONFERENCE - 2012 “Meeting the new challenges of your role as a corporate legal counsel” Safir 2, Ballroom (BR) Level HOTEL ISTANA Kuala Lumpur Prof. Dr. Mohd. Ma’sumBillahwww.drmasumbillah.blogspot.com ASLI

  2. Key Issues • CMF? Its Central Idea • CMF, IMF, MC & IMC: Compared • Why CMF? The Socio-economic & Cultural Impact • CMF: Its Global eco-Alarm • CMF: Its Ultimate Goal • The Model Structure of CMF • Governing Principles of CMF • Practicality of CMF • Cooperative Micro-bond (CMB)? • CMF & the Risk Management • The Role of Corporate Legal Counsel Towards Its (CMF) Socio-economic Goals • CMF? Its Challenges • The Way Forward

  3. CMF? Its Central Idea debt-free micro-financing with cooperative culture based on true spirit of eco-democracy by focusing on underprivileged, low-income group & middle class in view of creating an enterprising & an entrepreneur based nation with utmost professionalism & eco-prosperity CMF is thus, an asset based economy with risk sharing techniques, which opposes the existing model of debt-based economy with risk transferring mechanism Hence, CMF dismisses the idea of Micro-credit, which gives a chance to gain at the expense of others

  4. CMF, IMF, MC & IMC: Compared CMF (cooperative micro-finance) a debt-free micro-financing on project with risk sharing cooperative management in view of mutual benefits IMF (Islamic micro-finance) an asset based interest-free micro- financing with risk sharing either unilateral, bilateral or cooperative management basis in view of agreed benefit or sharing the result accordingly MC (micro-credit) a debt based interest bearing micro-financing with risk transferring technique in view of gaining some thing at the expense of others IMC (Islamic micro-credit)an interest-free micro-loan (qardh) on Benevolent or on service charge with risk transferring technique Thus… CMF, IMF & IMC are justified under Shari’ah principles while opposing the model of MC on account of unjust eco-treatment

  5. Why CMF? The Socio-economic & Cultural Impact Creating an Enterprising & an Entrepreneur based Nation with Professionally Self-reliant • Cultural-benefits • Cooperative Culture • Spirit of Brotherhood & Solidarity. • Utmost Care & Concern towards Mutual & Common Benefits • Socio-benefits • Matured • Skilled • Responsible • Visionaries • Self-esteemed • Laborious • Eco-peace & Harmony • Eco-benefits • Entrepreneur • Self-reliant • Eco-democracy • Eco-prosperity Cell cycle proteins

  6. CMF: Its Global eco-Alarm Text • ld Phenomena • 44% of the total poverty of • the World are living in the • Muslim Countries. • 50% of the total 57 OIC • countries are classed under • the UN-LDCs. • Indicatively about 60% of • the World Muslim are Poor • basically because of they • decline to appreciate any • financing facility due the discouraging issues of Riba, Gharar,Mysir and or Shari’ah contrary elements.. • World Phenomena • 44% of the total poverty of • the World are living in the • Muslim Countries • 50% of the total 57 OIC • countries are classed under • the UN-LDCs • Indicatively about 60% of • the World Muslim are Poor • basically because of they • decline to appreciate any • financing facility due the discouraging issues of Riba, Gharar,Mysir and or Shari’ah contrary elements • CMF Resolves to • Target the Underprivileged, Poor, Destitute, Low-income group & Middle Class community • Facilitate a Debt-free Asset based financing with a Cooperative Management Culture • Help them to be Entrepreneurs with Enterprising Capacity through Mutual Cooperation • With an Ultimate Goal of Eco-prosperity enjoying Peace & Harmony based on • holistic spirit of eco-Democracy for all humanity

  7. The Model Structure of CMF Micro-market (Participants) Cooperative Management (Parties) Financing (Bank) Helpless, Low-income & Middle Class Group Participant Bank Rep. & Auditor Local Supervisor Debt-free Asset Based Financing with Risk Sharing Technique

  8. Governing Principles of CMF General Operational Ethical Utmost Good Faith Cooperation Trust Principles of Contract Rules of Compliance Principles of Financial Contract (Pre & Post) Partnership Risk Management Distribution Arbitration

  9. Practicality of CMF Pre-contractual Post-contractual End-results Bank provides agreed financing Appointment of Local Supervisor Participant operates the project Monitored & Audited by the Bank’s rep Supervised by the Local rep. Sharing the net Income (between the Bank, Participant & Supervisor) Save the Cost & liabilities (Capital, Costs & liabilities including the tax) In case of loss, the deficit is on the Shoulder of the Bank while the Participant shall be discharged with no income Application for the Facility Qualification? Approval Formalization

  10. Cooperative Micro-bond (CMB) CMB? Central idea CMB? Structure PROJECT * ADebt-free Nation Development Model in the Socio-economic Reality * CMB Facilitates: Public, Private or Semi-government Projects. Government / SC (Policies & Enforcement) Central Bank (Issuer) Audit & Compliance (Investigation) Project Board (Decision Making) Bank (Fund Manager) Project Experts (Advisors) Management (Management & Operation) Intelligence Unit (Risk Management & Business Plan) Project Management (Development) Operation Unit (Project Operation) Maintenance Unit (Project Maintenance)

  11. CMF & The Risk Management Insurance Cover Takaful Cover All risk policy OR Project risk policy All risk Takaful OR Project risk Takaful

  12. The Role of Corporate Legal Counsel Towards Its (CMF) Socio-economic Goals STEP 1 STEP 2 STEP 3 STEP 4 Unskilled s Legal Colloquiums Sharing with Law makers & Regulators Media Sharing Legal Awareness Legal Research LPDP Presentation of Thoughts Law, Policies, Standard & Guidelines Advisory & Counseling Services Documentations Judicial Model Procedural Testing Handling Cases with Possible Mitigating Solutions Development of Precedents Upgrading the nature of Justice through Equitable Principles with Humanitarian Concern

  13. CMF? Its Challenges & Directions Unskilled Competitors Unawareness Poor Mechanisms Public, industrial or regulators’ unawareness on the reality of CMF. Thus, the CHCD shall be continued as the way out Poor-skill of any party specially the participant or the supervisor is the challenge. Thus, the proof of required skill shall be the pre-requisite for any deal Poor planning & due mechanisms may ruin the future of the project. Thus, a standard planning, smart strategies & wise operation shall be observed. MC Debt-financing Thus, a rational designation & smart operation of CMF may be the way to victory.

  14. The Way Forward STEP 4 STEP 5 STEP 1 STEP 2 STEP 3 STEP 5 An entity may lead the idea of CMF in Collaboration with a Bank Concurrently R & D shall be continued A technical group may design the system, manual, policies & the product (CMF) Management & operation accordingly The Bank shall lead to offer the product (CMF) as per the structure Achievement through rationalism& mutual cooperation

  15. Thank You Wassalam

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