Download - IIBI - Africa IF Presentation 11012012
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Islamic Finance in AfricaProspects and Challenges
MIA / Afkar Consulting
IIBI, BBA London11th January 2012
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Africa – Muslim Population
� Total Population of Africa� Total 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
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Africa – Countries with Largest Muslim Populations
� Nigeria – 91 million
� Egypt – 74 million� Egypt – 74 million
� Ethiopia – 53 million
� Algeria – 34 million
� Morocco – 31 million
� Sudan – 22 million
� Tanzania – 22 million
� Mali – 15 million
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Africa – Relief and Drainage
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Africa – Deserts and Forests
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Africa - Internet Connectivity
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Africa – Internet Backbone
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Africa – Key Features
� Mostly Rural Population
�Rural 60%+ / Urban 40% -
� Key Occupations� Key Occupations
�Agriculture and Animal Husbandry
� Key Exports
�Commodities
�Oil
�Minerals
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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
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Banking the Unbanked
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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
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Africa – Islamic Finance
Egypt Algeria
Tunisia Sudan
Morocco Senegal
Kenya Nigeria
Tanzania Uganda
Gambia South Africa
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Africa - Challenges� Large Infrastructure Needs
� Large unbanked population
� Dominant Financing Requirements� Dominant Financing Requirements
�Agricultural Finance
�Commodity Finance
�Export Finance
�Microfinance
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Africa -Innovations [1]
� Delivery Methods
� Overcoming Handicaps� Overcoming Handicaps
� Use of Mobile Phone Technology
� Kenya and M-Pesa
� Other Options
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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
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Africa Innovations [3]
� The Desertec Project
� Use of Massive Deserts for Solar Power� Use of Massive Deserts for Solar Power
� Long Term Sukuk Possibility
� Institutional Funding of Social Entitlements
� Sustainable Energy Generation
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Opportunities
� Potential Market Size
� Agricultural Finance
� Microfinance� Microfinance
� Microtakaful
� Risk-Sharing Infrastructure Finance
� Sustainable Finance
� Ethical Finance
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Africa – Other Players
� World Bank Group
� IDA
� IBRD
� IFC� IFC
� Multilateral Development Banks
� ADB
� ISDB
� Bilateral Development Aid / Resource Seekers
� OECD
� China
� India
� Predatory Food / Land Seekers
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Can Islamic Finance Deliver?
� Present Islamic Finance
�Mostly Delivering to Urban Middle Class
�Mostly for Urban Needs�Mostly for Urban Needs
�Little Agricultural Lending
�Little Microfinance
�Negligible Micro-Takaful
�Negligible Use of Innovative Technology
� Need for Change of Focus / Emphasis