Mohammed S. Al-Omar

'We have purchased the retail portfolio of 1,000 clients for a total of $18.7 million from The Investment Dar, and this is the first time that this has happened,' explains Managing Director and Chief Executive Officer Mohammed S. Omar, speaking to AME Info during a business trip from Kuwait to Dubai.

'This saved us a lot of time and effort in marketing to acquire a portfolio of 1,000 clients which will continue to be managed by the same company.'

Instead of earning a 2% on equity from a standard deposit, securitization of consumer debt will pay a profit return of 7.5% to Al Manar Financing & Leasing.

Al Manar was only established in December 2003 with a capital of $102 million, and is a closed-end company owned by the Kuwaiti Institution for Social Security, the Government and other investment companies. Global Investment House was the placement agent and issue arranger.

'We have had a very busy first month,' says Mr. Al-Omar, who joined from the Kuwait Finance House, Bahrain where he remains a board member. He is also chairman of Kuveyt Turk, the Turkish Islamic bank which hosted the International Islamic Forum in Istanbul last autumn.

'The Al Manar Financing and Leasing Company is all Islamic,' he adds. 'The way of doing business is of value and comfort to the consumer. For example, before we accept an asset like a house or a car we will check what it is worth for the client. They appreciate this type of attention.

'Besides in Islamic banking an advance is secured against a receivable but you still own the asset, and can still sell it to pay the receivable.'

Mr. Al-Omar points to the recent law that puts the Kuwait Finance House, Kuwait's only Islamic bank, under the control of the Central Bank as a sign of Islamic banking moving into the mainstream. And he notes that in the UAE and Bahrain Islamic banking is also properly regulated.

'You can't ignore Islamic banking,' he says. 'There is a lot of liquidity and our balance sheets are not inflated by double counting. Our treasury deals with commodity trading.'

In the meantime, Al Manar Financing and Leasing - one of the region's newest players in Islamic finance - has stamped its mark on the sector with a pioneering transaction.