Thursday, September 26, 2013

Islamic Banking Revolution: Africa Is Seeing an Explosion In Banks Looking To Cash In On Continent's Growing Muslim Population getdiscountz.blogspot.com

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getdiscountz.blogspot.com ® Islamic Banking Revolution: Africa Is Seeing an Explosion In Banks Looking To Cash In On Continent's Growing Muslim Population

Islamic banking is set to expand dramatically in Africa over the next two decades as the numbers of Muslims on the continent grows from 240 million to 400 million.




In Nigeria, for example, 80 million people are Muslim, but the first totally committed Islamic bank only opened in 2012. Jaiz Bank in just a year and half has gone from three to 10 branches, further. Until then, other banks have offered Islamic products to help people maintain Islamic law, also known as shariah, Euromoney said this week. By contrast, the U.S. opened its first stand-alone Islamic bank in 1987 despite having a far smaller population of Muslims.


Unlike conventional western-style banking, Islamic banking operates within the principles of shariah, prohibiting the fixed or floating payment or acceptance of specific interest or fees for loans of money. In addition, the purely Islamic banks that strictly follow shariah will not invest in businesses that provide services or products that are considered sinful or are prohibited.


Sharia banking offers an opportunity for the continent's existing banks. In Kenya, the Gulf African Bank experienced triple-digit growth last year, around 154 percent in net profit. The First Community Bank grew by 238 percent. And because of this exceptional year-on-year growth, Standard Chartered PLC (LON:STAN) said it would soon start offering Islamic banking products in Kenya.


As African banks embrace Islamic practices, regulatory bodies are scrambling to issue sharia-compliant policy statements and rules. In March, Nigeria brought in new guidelines to help deal with sukuk – the Islamic equivalent to bonds. A month later, guidelines were established to deal with takaful, Islamic Insurance.


Kenya’s successes in the Islamic banking industry reflect the fact that the nation has been making regulatory changes as far back as 2011 and has been working on some of the more complex shariah products, such as real estate investment trusts, ever since.


South Africa, Africa’s biggest economy and home to around 750,000 Muslims, has rewritten its tax laws to ensure that shariah-compliant products are more transparent.


Uganda, Botswana and Zambia are also looking to make regulatory changes to grow their Islamic banking sector.



Islamic Banking Revolution: Africa Is Seeing an Explosion In Banks Looking To Cash In On Continent's Growing Muslim Population

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