| April 22
April 22 The private sector arm of the
Jeddah-based Islamic Development Bank plans to
increase its activities in Africa, part of plans to widen the
appeal of Islamic finance across the region, its chief executive
Established in 1999, the Islamic Corporation for the
Development of the Private Sector (ICD) supports the economic
development of its 51 member countries by financing private
sector projects which follow Islamic principles.
Under a new strategy, the ICD is helping develop what it
terms "Islamic finance channels" to spread sharia-compliant
financial products more widely, ICD chief executive Khaled
Al-Aboodi told Reuters.
Such channels include Islamic banks, investment and ijara
(Islamic leasing) companies, and takaful (Islamic insurance) and
retakaful firms, Al-Aboodi said.
Africa represents around 12 percent of the ICD's cumulative
investment approvals since inception, and this figure is
expected to rise in coming years as projects come on line.
Some of the projects will be led by Senegal-based Tamweel
Africa Holding, jointly owned by the ICD and Turkey's Bank Asya
; Tamweel already holds stakes in Islamic banks in
Senegal, Niger, Guinea and Mauritania.
Tamweel will establish an Islamic bank in Benin and is
finalizing a feasibility study for one in Mali, Al-Aboodi said.
"We have prepared detailed projections for both banks which will
be presented to the board for final approval," he added without
specifying the size of the banks.
In Chad, the ICD is supporting the establishment of an
Islamic bank and a leasing company; both are to start operations
as soon as they receive final approval from local authorities.
In Tunisia, the ICD has teamed up with the newly created
sovereign wealth fund, Caisse de Depot de Tunisie, to set up a
$30 million fund to support local businesses.
"Replication of this model in other member countries is
under review," said Al-Aboodi.
"North Africa represents a large and still untapped market
of 190 million people. With the Arab Spring and the changing
political map there are huge opportunities in these countries."
Last month, the ICD tied up with Casablanca-based Al Ajial
Funds, a unit of sovereign wealth fund Kuwait Investment
Authority, to invest in Morocco's private sector.
While activity in Africa grows, the ICD also hopes to
improve access to sharia-compliant financing for small and
medium-sized enterprises (SMEs) across Muslim countries,
"This is an important sector in all the member countries,
including the higher income ones. ICD is now focusing on this
sector by extending lines of finance to local banks and
establishing ijara leasing companies and investment funds."
The ICD already has a network of ijara companies in
Azerbaijan, Uzbekistan, Tajikistan, Kazakhstan and Albania,
while it helped to establish the Euroasian Leasing Co in the
Russian republic of Tatarstan.
The Palestinian territories could soon join the list as the
first ijara firm in that market readies for launch, a $12
million company aimed at improving financing access for local
SMEs with ICD participation, said Al-Aboodi.
"Currently, the Palestine Ijara Company is getting all
required licenses and authorisations. The location was rented
and equipped. The recruitment process is in its final stage."
In Kazakhstan, the ICD plans to invest up to 35 percent of
the subscribed and paid-up capital of Zaman Bank and convert it
into the country's second Islamic bank. No time frame was given
for that plan.
Also in Kazakhstan, the ICD is involved in launching a $50
million sharia-compliant renewable energy fund with the
country's National Agency for Technological Development.
Last year, the ICD established the first SME investment fund
in Saudi Arabia with a target size of 1 billion riyals ($267
($1 = 3.7503 Saudi riyals)
(Editing by Andrew Torchia)