Regional banks are looking to capitalise on Morocco’s plans to introduce Islamic banking (also known as participation banking) services in the country. Morocco’s central bank, Bank Al Maghrib, is developing the regulatory framework for the industry to be ready by 2016.
African governments are looking to sharia-compliant financial markets to attract investment from the Middle East. The trend is just gathering strength, and experts expect more funds to flow into infrastructure and other major projects.
The latest wave of finance to reach African corporations and governments is coming from the Middle East, with an increasingly large sharia-compliant component.
Africa is for the first time embracing large-scale Islamic finance as countries seek to tap cash-rich Middle Eastern investors to finance their large infrastructure programmes.
The market for sukuk, or Islamic bonds, received a boost this month after Nigeria became the first major economy in sub-Saharan Africa to use the $100bn a year Islamic market, followed days later by Senegal.
Saudi Arabia has left the International Islamic Liquidity Management Corp (IILM), which is preparing to launch its first long-delayed sukuk or Islamic bonds since its inception in 2010, the IILM said late on Wednesday.
IILM did not give a reason for Saudi Arabia's exit. The central banks of Qatar and Malaysia bought out Saudi Arabia's share.
To enable financial inclusion for small farmers, the entire value chain needs to be understood and supported, and financial products have to be designed keeping in mind their unique needs. We at Bank of Khartoum believe that Islamic microfinance products can effectively reach small farmers in Sudan when customized to their needs.
We are reaching small farmers through a series of capacity building projects and developing tools such as group financing, co-operative, production-risk guarantees, and crop-insurance products aimed at small-scale farmers.
International Islamic Liquidity Management Corp., backed by a group of central banks located mainly in Asia and the Middle East, will launch its first sukuk of $300 million to $500 million "in a matter of months", its chief executive said.
Kuala Lumpur-headquartered IILM, established last year, aims to issue short term sukuk, or Islamic bonds, to help sharia-compliant banks manage liquidity and create a liquid cross-border market for Islamic instruments.
Central banks from seven Muslim countries yesterday launched a regulatory body to oversee the booming Islamic investment market. The Islamic Financial Services Board (IFSB) was inaugurated here by founding members Malaysia, Saudi Arabia, Indonesia, Iran, Kuwait, Pakistan, Sudan and the Islamic Development Bank.
Islamic banking is expanding by an increasing number of segments of traditional banking. Microfinancing has become the next area of expansion of Islamic finance.
IDB Vice-President (Operations) Boubacar Sidibe stated that IDB will actively follow up the mandate to expand the Islamic microfinance industry and offered to support innovation and research in the field as a means to fighting poverty in IDB member countries. He urged to create a knowledge platform accessible to everyone.
Sudan, which is fighting a severe economic crisis, has launched a sale of Islamic bonds offering an annual return of 20 percent to raise funds for the government, according to its debt agency.
Sudan will offer the Islamic bonds, locally known as shahamas, until January 25, the state-owned Sudan Financial Services Co, which sells sukuk on behalf of the central bank, said in an advertisement published in the local press.
Planned changes in the financial regulations of Senegal, Kenya, Nigeria and South Africa that will allow for the issue of Sukuk are set to fuel a rebound in the international Sukuk market, a market that has been declining since 2008. The latest Global Sukuk Market report released by the International Islamic Financial Market (IIFM) indicates that Africa accounted for only 0.3% of global Sukuk issuances in the decade ending December 2010, all of which came from Sudan with some miniscule activity in The Gambia. The report also claimed international Sukuk issuances dropped from $13.8bn in 2007 to $5.3bn in 2010 which IIFN attributed to a lack of confidence from corporate issuers.