Over the past two years, Mali’s Ministry of Finance has been working on establishing a fully-fledged Islamic bank, MARC ROUSSOT reveals.
Mali’s maiden Islamic bank is in gestation, and the Malian government hopes that the Islamic Corporation for the Development of the Private Sector (ICD) would be a part of this project, which has been in the pipeline since 2017.
In the Malian government’s ideal scenario, the ICD would take a 40% stake at the minimum, while Malian parties — the Chamber of Commerce and Industry and private investors — would hold 30% of the capital, IFN has learned. The remaining 30% would ideally be held by an ICD-recommended investment fund.
The exact size of the capital has yet to be decided but Malian authorities are looking at XOF20–25 billion (US$33.61-42.01 million), double the legal minimum of XOF10 billion (US$16.8 million).
“Starting a new bank implies expenses and potential losses, but with such a capital we believe we would avoid the need to recapitalize soon after the establishment of the bank,” explains Souahibou Diaby, the head of banking and microfinance supervision at the Ministry of Finance of Mali.
The project started in earnest at the end of 2017, following informal talks in 2016. Originally driven by the Chamber of Commerce and Industry, the organization ran into some hurdles as some of its members involved in the initial discussions decided not to renew their membership with the body.
The ICD, which had already been approached on the project, then requested the Malian parties to find a compromise prior to it making any commitments and the Ministry of Finance took the lead to facilitate an agreement between the Malian parties.
Discussions on the structure of the capital, governance and vision were held among the Malian parties and an accord was signed in June 2018 in the presence of the finance minister.
The proposal has been sent to the ICD which has yet to revert. The ICD did not provide an official comment when contacted by IFN.
The ICD has been an instrumental force for Islamic banking in Africa: since 2017, the ICD has agreed to help a number of banks, including SunTrust Bank Nigeria, Afriland First Bank Guinea, Banque Sahelo-Saharienne pour l’investissement et le commerce and Coris Bank International, establish an Islamic window.
Should an agreement be reached among all parties, things are expected to move relatively fast as the Central Bank of West African States, which regulates banking in eight West African countries, has introduced dedicated Islamic banking regulations recently. It should take about six months, with a special committee to be set up to drive the project and apply for a license, Souahibou believes.
While the exact strategy of the bank remains to be debated, some of its objectives are to promote Islamic finance in the country and increase access to banking services in particular for MSMEs, Ibrahim Boubacar Ba, a special advisor to the president of Mali, tells IFN.