Despite having around 28 per cent of the world’s Muslim population, Africa’s Shariah compliant banking assets make up only around two per cent of global Islamic banking assets, Moody’s Investors Service has said.
A report issued Thursday by the rating agency, stated that African Islamic banks face obstacles to growth, including high level of competition from conventional banks in some countries and a lack of product awareness in some other jurisdictions.
While the industry’s na- scent legal and regulatory landscape has been among the constraints, there is noticeable progress now being made in jurisdictions such as Morocco, Nigeria and across the West African Economic and Monetary Union (WAEMU), the report said.
“The Islamic banking industry remains underdeveloped in Africa as product awareness and sector competitiveness lag domestic conventional peers in some countries. However, legal, regulatory and tax frameworks are progressing well in some jurisdictions,’’ said Mik Kabeya, Vice President, Analyst at Moody’s.