Alif Sarmoya (Alif Capital), which is the first micro-financing organization in Tajikistan using the principles of Islamic Finance, has been upgraded into bank and it is now called Alif Bonk.
The Board of the National Bank of Tajikistan (NBT) has made a decision to grant the Open Joint-Stock Company (OJSC) Alif Sarmoya a license to carry out banking operations with national and foreign currency, according to the NBT press center.
NBT head Jamshed Nourmahmadzoda has reportedly ordered OJSC Alif Bonk head Abdullo Qurbonov to expand his bank’s activities through opening new points in the regions and expanding the range of banking services.
Established in August 2014 when the law regulating Islamic finance was finally enacted, Alif Sarmoya is located in Dushanbe.
In 2014, Alif Sarmoya launched consumer credit which was dubbed as “Befoiz” (interest-free) by offering short-term consumer loans (4–6 months) to its customers.
In 2015, over the first nine months of its operation, Alif Sarmoya increased its financing portfolio by over three times and, as a result, it has become the fifth largest micro-credit organization among the members of the Association of Microfinance Organization of Tajikistan (AMFOT).
From the very first day, Alif Sarmoya reportedly began its work by offering Murabaha-style financing which is considered the most commonly used mode of financing in Islamic banking industry. In other words, when the customer requests a financing to purchase an asset, then Alif Sarmoya buys the asset and sells it to the customer on deferred payment basis for a mark-up (12%–15%) which is agreed by both parties before the transaction. Alif Sarmoya transfers the ownership of the asset to the client and receives the payment over a period of time.
Alif Sarmoya reportedly attracts funds using Musharaka-style contract, which is also an Islamic finance instrument. This Islamic financial contract is usually used to attract deposits. In other words, the customer places funds with Alif Sarmoya, which, in turn, invests these funds in various projects through Murabaha, Befoiz, Ijara, etc. Whatever is realized, as a result of investment, is shared between the customer and Alif Sarmoya in accordance to pre-agreed income-sharing ratios.
