AFD enters partnership with the IDB to develop Islamic finance in North Africa
The French Development Agency (AFD) signed on January 18th an agreement with the Islamic Development Bank (ISBD) in order to broaden its range of Financial tools to the Islamic finance sector, first targeting Morocco, Tunisia and Egypt.The French Development Agency (AFD) signed on January 18th an agreement with the Islamic Development Bank (ISBD) in order to broaden its range of Financial tools to the Islamic finance sector, first targeting Morocco, Tunisia and Egypt.
This partnership, which will include microfinance products and will be made through sharing experiences, studies and pilot projects " is in line with AFD's new positioning in the Arab-Muslim world, with a view to acknowledge the current political developments and adopt a new strategy in the next few weeks" said Dov Zerah, AFD's Chief Executive Officer, quoted by Ecofin news agency.
This cooperation with the IBD, an institution that has become the authoritative source in the use of Islamic products for financing the development, will allow the AFD to contribute to the development of the fast growing sector of Islamic finance.
The aggregate figures for Islamic finance assets are indeed exceeding $1 trillion (€759 billion) worldwide, with annual growth exceeding ten percent, according to figures from the African Development Bank (AfDB).
While Islamic finance is popular in Gulf countries, in North Africa, the Islamic finance penetration remains weak, with $7 billion assets in Egypt, $1 billion in Algeria and $800 million in Tunisia.
According to AfDB, these low figures can be explained by the limited development of retail banking generally, the lack of knowledge of Islamic banking amongst potential clients and the absence of government support.
The AFD is hoping to develop the potential for Islamic finance in North Africa. Project co financing will be strengthened in Morocco, Tunisia and Egypt, as part of the Deauville partnership.