Islamic finance is struggling in North Africa
Islamic finance has yet to fulfil its potential in the Maghreb.Islamic finance has yet to fulfil its potential in the Maghreb.
Despite the large Muslim population in Morocco, Algeria and Tunisia, only a small percentage of all financial transactions are carried out in a Sharia-abiding way.
According to data published by American poll company, Gallup, 3 per cent of Algerians, 2 per cent of Moroccans and 1 per cent of Tunisians elect to use Islamic finance over more traditional banking methods. The percentages are similar in the neighbouring countries of Egypt and Yemen.
However, the Gallup survey suggests that the trend should change. Nearly half of the 1,000 people polled acknowledged knowing about Islamic finance.
Over 50 per cent of Moroccans are ready or willing to try
Islamic finance services, the highest percentage in the region.
Customer willingness is not the only element required to develop Islamic finance in the Maghreb. An increased rate of access to finance is also necessary. At the moment, only 17 per cent of the local population can access banking facilities.
Stronger local laws favouring Islamic finance would also help. Earlier this month, the Moroccan government was presented with a draft which, if ratified, will increase the availability of Islamic finance products in the country.