SMEs will drive Islamic Finance growth in Africa, say experts
The share of Islamic finance remains low in Sub-Saharan Africa.Demand for alternative financing methods from small and medium-sized enterprises (SMEs) and demographics will drive Islamic Finance growth in Africa, experts Samira Mensah, from Standard and Poor’s,
and Ameen Hassen, from Standard Bank, told CNBC.
However, they noted that some challenges to Islamic Finance growth remain, such as relatively weak economic outlooks, the complexity of issuing Sukuk as compared to conventional bonds and the lack of a level playing field in regulatory and tax regimes.
In a recent report, the IMF said that over the past two decades, the share of Islamic finance has remained low in Sub-Saharan Africa.
Islamic financial products represented only about 15 per cent of total financial assets at the end of 2014, and the region accounts for only one per cent of global Islamic finance assets.
This low representation, on a continent where the Muslim population is important, points to a significant growth potential, according to the report.