North Africa: Islamic Finance Experts Predict Maghreb Market Growth
Casablanca — Islamic banks can play an important role in the economies of Maghreb countries - particularly those struggling with socioeconomic development, a pan-African conference concluded last week.
According to the 6th African Islamic Finance Forum (FAFI) in Casablanca, Islamic products should not be simply limited by halal and haram, but should be designed as a source of wealth and job creation.
"Islamic finance, as a source of finance for African economies, must offer competitive products to attract customers and not focus solely on compliance with Sharia law," said banker Youssef Baghdadi of Dar Assafaa bank said at the 2-day event, which wrapped up on January 29th.
Lotfi Bouaicha, a former executive advisor of Tunisia's Zitouna Bank (the first Islamic bank in the Maghreb), adopted a similar stance.
"Quite apart from being Islamic, these are first and foremost banks that offer banking products and must meet the needs of their customers, offering a quality service and being just as competitive as traditional banks," he explained.
Abdelmalek Alaoui of consulting firm Global Intelligence Partners noted what he called the "paradoxical attitudes among a number of governments".
These governments turn to Islamic banks, he said, "for considerable amounts of funding, but at the same time want to control their development because of fears about their competition with conventional finance".
Khalid Labniouri, a bank clerk, emphasised that the debate over Islamic finance needed to be viewed separately from religious considerations. He stressed "the advantages of Islamic banking in a society like Morocco", pointing out that current bank service penetration was only 53%.
Sharia-compliant financial products and services could offer a real alternative, suggested Omar Kettani, the head of the Moroccan Islamic Finance Association (ASMECI).
Islamic banks, he explained, are there to serve the economy and the social sector.
Africa offered real opportunities to develop Islamic finance, financial analyst Najib Foukari said, pointing to a 6% growth rate and efforts to improve transparency and governance among institutions.
However, the shortage of suitable human resources is still a major challenge that needs to be overcome, he said.
In 2015, a number of Islamic financial institutions are being set up in Tunisia, Mauritania, Mali, Côte d'Ivoire and Chad.
Morocco has also just adopted a legal and regulatory framework for the establishment of Islamic financial institutions.