Islamic Banking: Africa is lagging behind, say experts
There are only seven Islamic banking institutions on the continent.Nigeria is hosting from January 6th to 10th in Ilorin a workshop on the development of Islamic Banking in Africa.
Organized by the Islamic Research and Training Institute (IRTI), the meeting brings together experts in the field from various countries.
Chairman of the Local Organizing Committee Abdulkadir Abikan decried the underdevelopment of the Islamic financial system in Africa despite its strategic importance to growth, the Daily Trust reports.
He noted that while this financing method could be used to take care of infrastructural deficits, there are only seven Islamic banking institutions in Africa.
He attributed the underdevelopment of Islamic banking in Africa to the low level of development on the continent and the introduction of religious sentiment into the banking model, noting that many countries with an insignificant percentage of Muslims have embraced Islamic banking.
"If we say because of religious volatility, we are not going to have Islamic banking, then we would be going backward".
The global market for Islamic financial assets has grown at an annual average rate of about 16 per cent since 2006, according to figures from the International Monetary Fund (IMF). Islamic finance grew to about 350 institutions and total assets of about US$1.7 trillion (£1.1 trillion) in 2013, concentrated in Malaysia and the Gulf countries.
Although Islamic banks’ financial assets have reached $1.3 billion in late 2012, the industry remains underdeveloped in Africa, although it has potential given the region’s demographic structure and prospects for financial deepening, according to the IMF.