Islamic Finance in Sub-Saharan Africa: Status and Prospects
IMF Working Papers, August 11, 2014
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Bibliographic details
- Authors: Enrique A Gelbard, Mumtaz Hussain, Rodolfo Maino, Yibin Mu, Etienne B Yehoue
- Published: August 11, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498348669.001
Summary
- Islamic finance is a fast growing activity in world markets.
- This paper provides a survey on Islamic Finance in Sub-Saharan Africa (SSA).
- While not yet significant in most Sub-Saharan countries, several features make Islamic finance instruments relevant to the region, in particular the ability to foster SMEs and micro-credit activtities.
Ongoing activities surveyed
- Islamic banking
- Sukuk issuances (to finance infrastructure projects)
- Takaful (insurance)
- Microfinance
Relevance and potential benefits for SSA
- Islamic finance instruments can foster SMEs and micro-credit activities.
- Sukuk issuance can be used to finance infrastructure projects and to tap foreign investors.
Policy recommendations and sequencing
- As a first step, policy makers could introduce Islamic financing windows within the conventional system.
- Facilitate sukuk issuance to tap foreign investors.
- The entrance of full-fleged Islamic banks requires:
- Addressing systemic issues.
- Adapting the crisis management and resolution frameworks.
Role for the IMF
- The IMF can play a role by sharing international experiences.
- The IMF can provide advice on supervisory and regulatory frameworks as needed.