The future of Islamic finance in Africa is very bright, says Khaled Al-Aboodi

Khaled Al Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector (ICD), discusses the African Islamic finance potential with MARC ROUSSOT.

From the establishment of new banks to the issuance of sovereign Sukuk, not forgetting the setting-up of a regional Shariah compliant leasing company for West Africa and the launch of Islamic funds to support African SMEs, the ICD is definitely pursuing several projects in parallel, aimed at developing Islamic finance in Africa.

As a long-standing partner of African countries, the ICD has been at the forefront of the development of Islamic finance in the continent. Its strong interest in Africa is not only due to the fact that certain analysts consider it as the new frontier of Islamic banking but also because 25 of its 53 member countries come from this very continent.
“The future of Islamic finance in Africa is very bright. We believe that the size of the Islamic finance industry in Africa, about 1%, is still very small in comparison with the size of the industry globally and our work is to try to increase this,” explains Khaled Al-Aboodi, CEO of the ICD, to IFN.

To achieve its goal, the ICD wants to increase the number of players via Tamweel Africa, a Senegal-based holding that is tasked with establishing Islamic banks in West Africa. Ivory Coast, Benin and Mali may soon join Senegal, Niger, Guinea and Mauritania where Islamic banks are already up and running.

The ICD is also trying to develop a livelier African Islamic capital market by currently assisting countries in issuing Sukuk, “both in Africa and also in other parts of the world”, according to Khaled. These auctions are expected to create a benchmark for the corporate sector.

Supporting SMEs is also among the ICD’s priorities. On top of the extension of lines of credit to Islamic banks funding SMEs, the Islamic multilateral financial institution has been creating Shariah compliant leasing companies in 12 of its member states, including Palestine and Egypt, and is now considering establishing a regional one for West Africa.

“We have also been thinking of creating an SME fund for West Africa. It is still at an early stage. We have signed on only with Gabon so far,” Khaled says.

This is an excerpt from an interview with Khaled Al-Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector. To listen to the full conversation, log on to IFN Podcasts.

This article first appeared in IFN Volume 14 Issue 42 on the 27th of September 2017

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