Egypt plans to strengthen its Islamic finance

CAIRO: Egypt has keen interest in developing Islamic insurance, or takaful, which makes up 5 percent of Egypt’s $1.45 billion insurance market, but it is expected to grow dramatically, according to a March report by Islamic consultancy BMB Islamic.

Salama Islamic Arab Insurance’s chief executive Saleh Malaikah said this month that demand for its products in Egypt have grown significantly since the revolution.

According to data from Bankscope and Thomson Reuters, Egypt could see Islamic finance assets grow to $10 billion in 2013 from $6 billion in 2007.  Challenges remain, given the less than encouraging history of Egypt’s Islamic finance industry.

Millions of Egyptians were stung by ponzi schemes in the mid-1980s, when a number of money management companies touted Islamic investments at returns above local interest rates.

Britain and France, for example, have changed regulations to accomodate Islamic transactions. And Malaysia, with its thriving dual system of conventional and Islamic finance, has been the biggest success story in the industry, serving as a model for new markets looking to offer Islamic products.  Continue reading