Meezan Bank to finance generators from next summer
November 13, 2011
KARACHI: Meezan Bank, the largest Islamic bank in Pakistan, is launching a generator financing product in summer next year, in view of its growing demand amid increasing electricity outages, Muhammad Raza, Head of Consumer Banking, Meezan Bank, said in an interview with The News on Saturday. “The energy shortfall is growing day by day,” he said. “The financing can help a lot in ensuring that people meet their needs, with the facility to pay in easy installments,” he said.
The bank has already successfully launched laptop financing, he said. “While launching laptop financing, we kept in mind that although it was a small item, people wished to pay for it installments.”
Raza has been associated with Meezan Bank for the last nine years and has over 20 years’ banking experience.
Talking about the growth of consumer banking, he said that overall consumer financing is on the decline for two main reasons. “One is that banks are not much inclined towards consumer financing and the other is poor recovery of loans given in previous years.
He said that Meezan Bank is aggressively pushing consumer products and disbursing mortgage financing.
Meezan Bank is at the top of three Islamic banks which are aggressively pushing Car Ijarah (Islamic car financing). It has partnered with major manufacturers, including Indus, Toyota and Suzuki, he said.
“Recently, the bank launched awareness campaign about Car Ijarah,” he added.
About Non-Performing Finance (NPF), Raza said that if a bank managed its credit tactfully, there were slight chances of repayment issues. “It is a major strength of Meezan Bank that its NPF is very much under control,” he added.
Asked about the mode of generator financing, he said it would be ‘musafama’ under which an Islamic bank buys products from manufacturers and sells them to customers on deferred payments. About the product price, Raza said that if a bank sold something at too high a price, no one would buy it. He said that customers have knowledge about prevailing rates of a product in the market. “If a bank sells at market rate with value addition, the customers will be happy.” ‘
Replying to a query about difference between conventional and Islamic financing, Raza said that the only idea of loan in Islam is that of Qarz-e-Hasna. “Islamic banks loan has to be something other than just debt.”
He said that the Islamic banking system does not offer cash financing. “There has to be an asset,” Raza added.
The bank has already successfully launched laptop financing, he said. “While launching laptop financing, we kept in mind that although it was a small item, people wished to pay for it installments.”
Raza has been associated with Meezan Bank for the last nine years and has over 20 years’ banking experience.
Talking about the growth of consumer banking, he said that overall consumer financing is on the decline for two main reasons. “One is that banks are not much inclined towards consumer financing and the other is poor recovery of loans given in previous years.
He said that Meezan Bank is aggressively pushing consumer products and disbursing mortgage financing.
Meezan Bank is at the top of three Islamic banks which are aggressively pushing Car Ijarah (Islamic car financing). It has partnered with major manufacturers, including Indus, Toyota and Suzuki, he said.
“Recently, the bank launched awareness campaign about Car Ijarah,” he added.
About Non-Performing Finance (NPF), Raza said that if a bank managed its credit tactfully, there were slight chances of repayment issues. “It is a major strength of Meezan Bank that its NPF is very much under control,” he added.
Asked about the mode of generator financing, he said it would be ‘musafama’ under which an Islamic bank buys products from manufacturers and sells them to customers on deferred payments. About the product price, Raza said that if a bank sold something at too high a price, no one would buy it. He said that customers have knowledge about prevailing rates of a product in the market. “If a bank sells at market rate with value addition, the customers will be happy.” ‘
Replying to a query about difference between conventional and Islamic financing, Raza said that the only idea of loan in Islam is that of Qarz-e-Hasna. “Islamic banks loan has to be something other than just debt.”
He said that the Islamic banking system does not offer cash financing. “There has to be an asset,” Raza added.
