Identifying marketable trends

From World Finance

After conquering much of the Middle east and Asia Pacific regions, Islamic finance is set to expand further afield to North Africa, as a number of institutions look to introduce their products and services to new locations

Withstanding a great many challenges in recent years, sharia-compliant financial products have cemented a place as a robust and attractive financial option for those seeking an assured investment opportunity. Having long interspersed the risk-averse and largely Muslim populations of the Gulf and Asia Pacific regions, a vast Islamic finance industry looks to expand further afield to unlikely and unprecedented markets such as North Africa.

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Libya Hoping to Implement New Islamic Banking Plans by End of Year

The Libyan central bank governor Saddek Omar Elkaber said Monday, that Libya hopes to start implementing its new Islamic banking law by the end of the year and expects strong demand among the public for sharia-compliant financial services.

The country has been working to amend its legislation about an Islamic banking law to attract foreign investment and stimulate its private sector following last year’s war that ousted Muammar Gaddafi since last May when it approved the Islamic banking law.

Elkaber is reported by Reuters telling journalists on the sidelines of an Arab central bankers’ conference in Kuwait, that the demand is so high in Libya, as such, it has decided to set up a higher committee for Islamic finance…”Now they are working to set up a road map for Islamic finance in Libya,” he added.

Asked when Libya might be able to start implementing the rules, he said: “Hopefully very soon. Hopefully this year.”

He went on to say that the Libyan authorities envisaged several options for Islamic banking services. One would be to allow conventional banks to open branches or windows for Islamic finance, while another would be permitting conventional banks to become Islamic. Libya is also looking at introducing a special licence for Islamic banking, he said.

But, he added, the licensing option is still under discussion because authorities have yet to agree on capital requirements.

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Tunisia: The Islamic finance growing

It is a small revolution in the Tunisian banking landscape.  After the Al Baraka Bank and Noor Islamic Bank, Tunisia has just acquired its first Islamic bank 100% local: bank Zaytuna.

Islamic banking is gaining ground. With assets amounting to some $ 700 million, representing a penetration rate of 11.9% worldwide, it is necessary as a means to introduce more ethics in transactions Financial.  The products of Islamic finance, which have weathered the global crisis, are now adopted by several developed countries and international banks, seduced by a system which brandishes his principles as much preventive vaccines ban on speculation of interest, the uncertainty of sales and financing of illicit activities.

In Tunisia, the phenomenon continues to grow.  In 1983, the first Islamic bank was established in that country: the Best Bank or Beit Ettamouil Saoudi Tounsi (recently renamed Al Baraka Bank-Tunisia).  It is held up to 10% by the Tunisian State, 10% by Caisse Nationale de Sécurité Sociale (CNSS), 1.6% by private Saudi and 78.4% by the Saudi Al Baraka Banking Group, a global leader in the field of Islamic finance.  In June 2008, it was the turn of the Noor Islamic Bank to settle in the country.  A subsidiary of Noor Islamic Bank and Dubai Investment Group (DIB) of Sheikh Maktoum, Ruler of Dubai, it is also the sixth Islamic bank in UAE.  The regional office in Tunis focuses primarily on corporate banking and investment. Recently, a third Islamic bank to 100% of Tunisia has enhanced banking landscape: the bank Zaytuna ( “olive” in Arabic).  With an initial capital of 30 million dinars (25 million dollars), it was formally established last October 21.  A small revolution in the banking landscape previously dominated by Western practices.

Unlike the Best Bank, which develops only products for businesses, the bank Zaytuna covers all banking segments (receiving deposits from the public, regardless of the length and shape; grant funding; exchange transactions; Management of payment …) in accordance with the principles of Islamic finance, which forbids riba (usury credits) and is based on the concept of sharing risk with the client.  Founded by Mohamed Sakhr El Materi, a young Tunisian businessman, also deputy head of the group and Princess El Materi Holding – which already operates in the automotive, agribusiness, real estate, tourism and the media — the latest sector is, according to Tunisian financial community, with a bright future.

Seven shareholders would share the capital. Sakhr El Materi carves the lion’s share, with 51%.  The rest is divided among six of the most powerful private Tunisian: Map, Poulin, Tunisian Travel Service (TTS)-Delice Danone, Utica (Ulysse Trading & Industrial Companies) and the group Bouchamoui.  With this new bank, which means “universal citizen, modern and open to its international environment”, in the words of Mohamed El Matteri Tunis looks set to become a regional privileged place in Islamic finance.

Source  : Continentalmag (google trld)