|Awqaf is an Arabic word meaning assets that are donated, bequeathed, or purchased for the purpose of being held in perpetual trust for general or specific charitable causes that are socially beneficial. Perpetuity of awqaf has led, over the years, to a considerable accumulation of societal wealth, such that awqaf has become an important economic sector dedicated to the improvement of the socio-economic welfare in member and non-member countries with significant Muslim population. The beneficiaries supported by Awqaf are not limited to a finite list but mainly include poverty alleviation programmes, disaster relief, free health services, imparting religious and contemporary education, heritage, culture, and environment.|
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|Information for Investors|
The Awqaf Properties Investment Fund (APIF) was established in Dhul Qada 1421H (February 2001) under Article 23 of the Articles of Agreement establishing the Islamic Development Bank (the IDB or the Bank).
APIF is established as a U.S. Dollar denominated trust fund managed by the Islamic Development Bank in accordance with the Islamic concept of Mudarabah and the Regulations of APIF. The IDB undertakes the role of Mudarib acting as Manager and Trustee of APIF.
Subscription to APIFs capital is open to Awqaf ministries, directorates, and institutions in addition to Islamic banks and financial institutions.
The objective of APIF is to develop and invest in accordance with the principles of Islamic Shariah, in Awqaf real estate properties that are socially, economically, and financially viable, in member countries of IDB and Islamic communities in non-member countries.
APIF provides financing for the development of Awqaf properties both in member countries and non-member countries of IDB.
APIF has a Participants Committee which oversees implementation of the Regulations and the Guidelines for Investment of APIFs financial resources, in addition to looking into the Annual Report and Final Accounts of APIF after their approval by IDBs Board of Executive Directors.
APIF has a Supervisory Committee (a sub committee of IDBs Board of Executive Directors) which is responsible for examining the quarterly accounts of APIF and for proposing polices and guidelines to the BED. It is also responsible for the periodic review of APIFs performance and submission of related reports to the Participants Committee and IDBs Board of Executive Directors.
The authorized and subscribed capital of APIF is US$ 57 million divided into 5,700 "A" Certificates with a par value of US$ 10,000 each.
The Mudarib may mobilize additional resources for APIF for investing in specific projects, through syndication, co-financing, or issuing of "B" Certificates that can take the form of Muqarada Certificates, Ijara (Leasing) certificates, etc. The Participants may purchase "B" certificates.
To augment the resources of APIF, the IDB has a US$ 50 million line of financing for APIF to be utilized for the financing of APIFs projects.
Notwithstanding the noble cause for which APIF was established, its operations are market oriented to secure a reasonable return for its investors. The overriding consideration, however, is to ensure continuity of APIF by aiming at building a strong General Reserve to the tune of 50% of paid-up capital before ensuring high dividend payout ratios to investors.
Up to 20% of any years net income can be transferred by the Mudarib to the General Reserve. The total scheme of profit appropriations is, therefore, as follows:
Percent of Total
|Mudarib (Management) Fees||
0% - 20%
70% - 90%
The IDB undertakes, from the fourth financial year of APIF, to purchase from holders of "A" Certificates not more than 50% of the certificates held by each of them provided that:
The Mudarib (the IDB) applies very prudent measures for extending financing out of APIFs resources. These measures include, among others, the requirement of Government guarantees, first class bank guarantees or insurance cover of renowned credit insurance companies.
To guard against concentration of risk, APIF strives to diversify its financing portfolio by setting ceilings for countries and beneficiaries within a country.
APIF provides quarterly financial statements that are reviewed by its external auditors in addition to the audited year-end financial statements.
APIF is audited by an internationally reputed audit firm who provides quarterly reviews and year-end audit of APIF's financial statements.