- The Islamic financial services sector in Pakistan remains relatively small compared to the broader market
- Need for more policy incentives plus education of the masses in banking
Interview with Miss Tara Uzra Dawood — Chief Executive Officer, LADIESFUND
Profile:
Miss Tara Uzra Dawood, CEO of LADIESFUND, has spearheaded initiatives that have trained 12,000 women entrepreneurs. Additionally, the organisation provides vocational training to girls, focusing on communication skills and learning the basic areas. Miss Dawood’s overarching goal is to expand this mission nationwide, with recent launches in Badin and Sanghar showcasing her commitment to scaling impact across Pakistan.
She is also CEO and Founder of 786 Investments Limited, one of Pakistan’s pioneer asset management companies. It is publicly listed on the Pakistan Stock Exchange. She also currently sits on the boards of Pakistan Refinery Limited and Dawood Family Takaful Limited and previously served on the boards of Pakistan State Oil — where she chaired the Audit, HR and IT/Innovation committees, Mutual Funds Association of Pakistan and Lahore Electric Supply Company (LESCO).
She is further serving on the Energy Sub-Committee of the Advisory Committee of the Planning Commission under the Chairmanship of Asad Umar, Federal Minister for Planning, Development, Reforms and Special Initiatives (PD&SL). She is certified in Corporate Governance by the Lahore University of Management Sciences (LUMS), Pakistan Institute of Corporate Governance (PICG) and Harvard Business School.
She holds a Doctorate in Judicial Science from Harvard Law School — where she specialised in Shariah law and finance, as well as mergers and acquisitions — and a Bachelor of Arts Honors from Cornell University and Oxford University. She is a member of the Bars of New York and the Supreme Court of the United States of America.
She worked for law firms in New York, Toronto, Amsterdam, Brussels and California before launching 786 Investments Limited. She has served on the Faculty at Danube University Krems (Austria) as recommended by The International Investment Funds Association and EBAMA.
She speaks globally at numerous international mutual fund and banking conferences as an authority on Shariah-compliant finance as well as finance for women, and most recently represented Pakistan at ALFI Rentree 2020, the annual association of the Luxembourg Fund Industry, where she has previously been a speaker on Islamic finance in both 2013 and 2014.
She was also invited to France to assist the Association Française de la Gestion Financière in the launching of their Shariah mutual funds industry.
Miss Tara is well known for her philanthropic work for women and children, in partnership with Facebook’s internet.org foundation and with the support of the World Bank, as well as distribution of emergency supplies to the victims of the earthquake in Khyber Pakhtunkhwa and most recently distributed food rations during Covid-19 and to the Sindh floods victims.
Her current passion project is spearheading the distribution of 10,000 wheelchairs across Pakistan to hospitals and individuals in need.
PAGE: What is your perspective about the fast-growing Islamic financial services in Pakistan?
Tara Uzra Dawood: It is still underdeveloped and tiny compared to the market of Pakistan. According to Fitch Ratings January 2024 data, Pakistan’s Islamic finance ecosystem consists of Islamic banking assets (55%), Sukuk (37.6%), Islamic non-bank financial institution (NBFI) assets (7%), and Takaful assets (0.4%).
To address this imbalance, the State Bank of Pakistan (SBP) has strategic plans for 2023-2028 including transforming existing conventional banks into Islamic banks with a target for Islamic banks to hold 30% of overall banking assets and deposits by 2025.
PAGE: What is your standpoint about Islamic banks, Islamic mutual funds and Takaful operators?
Tara Uzra Dawood: The market share of Islamic banking system assets has consistently risen over the past five years. Last year, we saw the successful conversion of Faysal Bank to Shariah and Summit Bank has been approved to transition to Shariah under the new name Bank Makramah. The growth potential is very high and with encouragement and incentives by the government, more and more conventional entities are expected to convert to Islamic finance.
PAGE: How would you comment on the elimination of Riba?
Tara Uzra Dawood: According to IBIR, “the Pakistani Constitution requires the state, as part of its principles of policy, to eliminate riba as early as possible. A law on the enforcement of Shariah has been promulgated with a view to providing the institutional framework for undertaking, inter alia, the Islamisation of the economy.” This is the principle. The reality, however, still has the market and market players by and large enjoying interest.
PAGE: What must the incumbent government do to spur Islamic financial services in Pakistan?
Tara Uzra Dawood: More policy incentives plus education of the masses in banking in general. Still, many Pakistanis don’t own any bank account.