Islamic Bank Holds Business Forum in Nigeria

The Islamic Development Bank (IDB) will hold its first business and investment forum in Nigeria this month, Senior Economist, Operations Planning and Services Department of the Bank Abdallah Kiliaki has said.

He made the remarks in Abuja when he led some officials of the bank on a visit to the Nigerian Investment Promotion Commission (NIPC).

He said the forum which is scheduled for 23rd and 24th of February this year in Abuja will enable the bank to interact with the relevant stakeholders in Nigeria’s public and private sectors.

He said: “Our coming to NIPC is basically to discuss with the authority on our intention to organize a business forum in Nigeria to introduce the Islamic Development Bank group to stakeholders in Nigeria in the public sector as well as the private sector.”

He said that though the bank reflected Islam in its name, its operation has nothing to do with religion, adding that it only operates with Islamic ethics and code.

He explained that the Bank does not finance mosque or religious activities, adding that membership is opened to both Muslim and Christian nations.

He said that all the goals and objectives of the bank are geared towards poverty reduction and economic development without any political attachment, saying it operates like the World Bank and IMF.

He said: “We are not coming to establish a bank but to partner with the government and corporate bodies to finance project, though the bank is not after profit making but the loan is not totally free.

“The interest on loan is so minute compare to other banks. We use Islamic code of finance. It does not mean that the loan is free but we are more compassionate, we do charge a mark up which varies from project to project.”

He said the bank had already invested a whopping $200 million in Nigeria for the financing of several projects since the country became a member in 2005 which include among others, food security, education, health, trade and financing.

In his remarks, the Executive Secretary of NIPC, Engr. Mustapha Bello said the visit of the team to Nigeria came at the right time when country needs financing at both private and public sector of the economy.

Represented by Stephen Amase, Director of Finance and Administration, the Executive Director said the Islamic Development Bank will be of much benefit to Nigerians as it would be offering long term financings which are not derivable from the commercial banks.

source : allafrica

Future of Islamic Banks in North Africa – Magherb

Islamic finance is developing still limited in the Maghreb, but it seems to have a promising future.

In Algeria, the phenomenon emerged in 1991, officials of the central bank prefers to allow the supply of Islamic products to individuals rather than see this happen in the sector informal. Al Baraka Bank, with the largest shareholder group in Saudi Arabia.  Al Baraka is not seen yet officially given the label “Islamic” because it would cast doubt on the Islamic identity of traditional banks, argues Algiers.

Single institution, even today, to offer Islamic products in Algeria, Al Baraka attracts a clientele that wants to comply with the religion.  The product works best is the car loan, “probably because he does not claim to have great visibility into the future,” said Hamza Bouaziz, PhD in economics and finance at the University of Paris I — Pantheon-Sorbonne and author of a thesis on the topic of Islamic finance in the Maghreb.  Since 2001, 47 500 vehicles were purchased in Algeria with an Islamic finance, including 17 500 in 2006 alone.  Real estate is not really concerned, but this may come as speculation in this area is important, especially in Algiers.

General Weakness

 If Islamic finance is no better drilled, this reflects the general weakness of the Algerian banking system, a legacy of thirty years of socialism.  But in a country where religious revival is strong potential demand is probably high.

In Tunisia, there is only one Islamic bank, the Bank BEST (Beit Ettamouil ESSAOUDI Ettounsi Bank).  It was created in 1983, but remains restricted to local institutional as well as large investors, especially those in the Gulf.  The Tunisian authorities have indeed avoided until now to make accessible to ordinary citizens Islamic products, presumably for political reasons.  Even more than in the rest of the Maghreb, Tunis afraid of anything related, directly or indirectly, to Islam.

An important step was however taken in February, with the passage of a law authorizing the creation of an international Islamic institution in collaboration with the Islamic Development Bank (IDB), said Bouaziz Hamza. This institution will be responsible for financing and promote trade between Arab countries, especially between the Maghreb and Mashreq. ”

 In Morocco, the Islamic banking products – officially called “alternative” – have entered the capital market on 1 October, with the approval of the ruling Justice and Development Party (PJD, a moderate Islamist party).  The government hopes to bring in the banks of many Moroccans who settle their transactions in cash.  Only 20% of the population uses a bank account.  Attracting capital from investors in the Gulf is another issue.

 It is too early to take stock of this turn in Morocco.  For now, only three conventional banks offering Islamic products.  The beginning was laborious.  The car loan is, as in Algeria, which works best.  This success is due not so much because it is money “halal” (according to the precepts of Islam) because the loan is cheaper by about 10% compared to traditional products, to Unlike mortgages.

Ultimately, all the experts say: the future of Islamic finance in the Maghreb is more in its competitiveness in its conformity to the Qur’an .

Source : The World trsltd