Djibouti: Future hub for Islamic finance in Africa?
Islamic finance is growing exponentially in Djibouti.Djibouti is fast becoming an important platform for Islamic finance in Africa, according to new figures from the Central Bank of Djibouti.
They reveal that financial institutions complying with the principles of Sharia hold between 15 and 20 per cent of the market in the country.
In addition, the market size of the four Islamic banks (out of ten banks) is estimated at DJF55.5 billion (approximately €256 million), an increase of 20 per cent since 2013.
Deposits amounted to DJF33 billion, representing 15 per cent of bank customers' total deposits.
"In less than a decade, banks have managed to capture a significant market share. Indeed, not only have Islamic banks helped us to get out of a stifling imposed duopoly, but they also allowed a diversification of supply and therefore better access to financing," said Djibouti's Head of State Ismail Omar Guelleh, as quoted by Xinhua news agency.
These results are due to the introduction of a specific legal framework for this type of financing by the Djibouti government, in a bid to facilitate the expansion of Islamic finance in order to mobilise savings and financial inclusion.
In Djibouti, more than 99 per cent of the population is Muslim, according to government figures.