2023-09-16 12:18:14
ALGIERS- Launched three years ago, the market for Islamic banking products is recording a strong growth rate, driven in particular by sustained demand, in the face of a diversified offering of products and services offered by a dozen public and private banking establishments.
According to recent data from the Association of Banks and Financial Institutions (ABEF), bank deposits total “a little over 700 billion Da” collected by some 600 points of sale, between dedicated agencies and Islamic windows at the level. classic agencies distributed across the national territory.
“This brings the share of Islamic bank deposits in the overall resources collected by local banks to more than 4%, compared to just over 1% five years ago,” Sofiane Mazari, president, told APS. of the Islamic Finance Committee at ABEF.
According to the same manager, who underlines “the real political will to promote Islamic finance”, this result is very interesting and encouraging for all banks given the growth in the collection of resources, financing but also the range of banking products compliant with Sharia law and which continues to expand.
At the end of August 2022, Islamic bank deposits had totaled 500 billion Da, financing 400 billion Da, while the number of Islamic windows at the bank level had reached 469, according to a previous report communicated by the Bank of ‘Algeria.
Currently, twelve (12) banks offer these products, notably since the promulgation, in 2020, of the framework governing this finance, namely regulation 2020-02 defining banking operations relating to Islamic finance, and instruction 03-20 defining the products relating to Islamic finance and setting the terms and technical characteristics of their implementation.
Sukuk, a new investment opportunity
In addition, the new monetary and banking law promulgated last June further consolidates the legal framework of this sector, by enshrining, among other things, the creation of banks exclusively dedicated to Islamic products, notes Mr. Mazari, for whom this law paves the way also to national and international partnerships for the creation of new Islamic banking and financial establishments in Algeria.
“Given the very rapid growth of Islamic windows, I think that there will be new players on the market, new foreign Islamic banks which will set up in particular from the Middle East, Qatar, Turkey or even from Malaysia”, he said on this subject.
Asked, moreover, regarding the prospect of launching sukuk as alternative means of financing and their impact on the Islamic finance segment, the ABEF representative believes that they will allow banks and takaful insurance companies to develop their investments and invest their excess cash.
In addition, he added, these Islamic bonds, particularly sovereign bonds (launched by the Public Treasury), are likely to favor the creation, in the long term, of investment banks “which are most able to make this type of financial arrangements and managing them.
He also insisted on the “great desire” of the banking community to invest and train human capital dedicated to the activity of Islamic finance, highlighting the role of communication and awareness raising as part of an approach financial inclusion, particularly for the benefit of large sections of society.
Referring to the sector’s medium-term prospects, Mr. Mazari emphasized the development of the stock market and the importance for market players to help finance public infrastructure and producing companies.
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