1. Islamic Finance in Africa
Prospects and Challenges
MIA / Afkar Consulting
IIBI, BBA London
11th January 2012
2. Africa – Muslim Population
Total Population of AfricaTotal Population of Africa
Variously Estimated at 900 – 1,000 million
Muslim Population 50 - 60%
Muslims in Africa 500 – 600 million
Africa – A Muslim Majority Continent
3. Africa – Countries with Largest
Muslim Populations
Nigeria – 91 million
Egypt – 74 millionEgypt – 74 million
Ethiopia – 53 million
Algeria – 34 million
Morocco – 31 million
Sudan – 22 million
Tanzania – 22 million
Mali – 15 million
10. Africa – Key Features
Mostly Rural Population
Rural 60%+ / Urban 40% -
Key OccupationsKey Occupations
Agriculture and Animal Husbandry
Key Exports
Commodities
Oil
Minerals
11. Africa – Key Features
Average GDP / Capita < US$1,000
Banked Population 20 – 30 %
Urban 40% +Urban 40% +
Rural 10% -
Banking Facilities
1 Bank per 100,000 people
Capital Markets
Few and Rudimentary
13. Africa – New Vistas
Entry of International Law Firms
Morocco
Egypt
South Africa
Entry of International Banks
Barclays (Absa)
Stanchart / Standard Chartered Bank
Standard Bank / Stanbic Bank
Ethnic Banks
GCC Banks
14. Africa – Islamic Finance
Egypt Algeria
Tunisia Sudan
Morocco Senegal
Kenya Nigeria
Tanzania Uganda
Gambia South Africa
15. Africa - Challenges
Large Infrastructure Needs
Large unbanked population
Dominant Financing RequirementsDominant Financing Requirements
Agricultural Finance
Commodity Finance
Export Finance
Microfinance
16. Africa -Innovations [1]
Delivery Methods
Overcoming HandicapsOvercoming Handicaps
Use of Mobile Phone Technology
Kenya and M-Pesa
Other Options
17.
18.
19.
20. Africa Innovations [2]
Islamic Finance – Back to Roots
African Food Production Potential
Salaam [Spot Sale / Deferred Delivery]Salaam [Spot Sale / Deferred Delivery]
Arbun [Deferred Delivery]
Modarabah [Risk Sharing Contract]
Original Agricultural Contracts
Easy to Adapt to African Requirements
Micro-Takaful Needs
21. Africa Innovations [3]
The Desertec Project
Use of Massive Deserts for Solar PowerUse of Massive Deserts for Solar Power
Long Term Sukuk Possibility
Institutional Funding of Social Entitlements
Sustainable Energy Generation
23. Africa – Other Players
World Bank Group
IDA
IBRD
IFCIFC
Multilateral Development Banks
ADB
ISDB
Bilateral Development Aid / Resource Seekers
OECD
China
India
Predatory Food / Land Seekers
24. Can Islamic Finance Deliver?
Present Islamic Finance
Mostly Delivering to Urban Middle Class
Mostly for Urban NeedsMostly for Urban Needs
Little Agricultural Lending
Little Microfinance
Negligible Micro-Takaful
Negligible Use of Innovative Technology
Need for Change of Focus / Emphasis
