Sri Lanka’s first regulated Shari’ah compliant minor savings account debuts

Al-Falaah – the Islamic Business Unit of Lanka ORIX Finance Plc – recently renewed the identity of its Shari’ah compliant minor savings scheme, under the name ‘Al-Falaah Junior’.

This minor savings scheme was introduced way back in August 2009 and was the first of its kind to be offered in the Sri Lankan Islamic financial services sector.

Identifying a dearth in the existing Islamic finance industry for children’s savings products, Al-Falaah improved ‘Al-Falaah Junior’ with added benefits and returns, under the core theme ‘A Righteous Start’.

‘Al-Falaah Junior’ aims to inculcate the savings habit and financial discipline amongst children from a younger age. It also offers a comprehensive savings plan based on the Shari’ah principle of profit sharing, where the child will receive a high return on investments.

Speaking about this unique offering, Shiraz Refai, Chief Manager, Islamic Business Unit of Lanka ORIX Finance PLC, said: “By introducing a Shari’ah compliant approach to minor savings, we have identified a long-term value in harnessing a righteous approach to finance amongst children and parents. ‘Al-Falaah Junior’ offers a variety of exciting gifts and attractive value added benefits. This would provide parents the opportunity to build a solid financial foundation for their children, so that on reaching 18 years of age, the child would have a substantial fund to pursue higher studies and other future goals.”

In order to open an account, a parent or the guardian is required to produce their NIC and the birth certificate of the child. ‘Al-Falaah’ services can now be obtained from over 50 Lanka ORIX Finance branches islandwide, including four dedicated ‘Al-Falaah’ centres located in Kalmunai, Kaththankudi, Oddamawadi and Akurana.

Further plans are underway to set up student saving centres in key schools around the country, offering greater convenience and accessibility to children and parents to operate the savings account from the school premises itself.

“We have always strived to achieve value creation through our diverse range of products and services, where we have gone beyond the norm of selling a product, to inculcate values, whilst giving better returns on investments. Similarly, ‘Al-Falaah Junior’ is an investment plan which is in keeping with religious obligations. This provides children and parents a righteous and a secure pathway to save and plan their financial future well in advance. Hence, we are pleased that we have taken the right step forward in this direction by introducing ‘Al-Falaah Junior,’” Refai said.

Concluding his statement, the Chief Manager, Islamic Business Unit said that this unique long-term investment plan for children has been backed by the strength, stability and solid reputation of both Lanka ORIX Finance PLC and its parent company, LOLC.

“‘Al-Falaah Junior’ has obtained the relevant regulatory approvals from the Central Bank of Sri Lanka and is closely supervised by an Independent Shari’ah Supervisory Board (SSB), which monitors all Islamic financial transactions of the company. The SSB comprises of leading and eminent Islamic finance scholars representing the local and international Islamic Finance communities. In addition, our ‘Al-Falaah’ business unit is comprised of an in-house Shari’ah advisor together with a dedicated, professional and well-experienced team of staff members who are fully qualified to offer advice on various savings options,” he added.