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
CAIRO: Egypt could see Islamic finance assets grow to $10 billion in 2013 from $6 billion in 2007, according to data provided by Bankscope and Thomson Reuters.
Although Egypt is considered the birthplace of Islamic finance, its growth has lagged due to past corruption scandals, while the previous government sought to enforce a more secular financial system.
However, more Muslims are embracing Islamic banking, raising the prospect that the country could become another thriving centre of Islamic finance.
According to a 2009 report by consulting firm McKinsey, Islamic banking only accounts for around four per cent of Egypt’s $193 billion banking industry.
There is also keen interest in Egypt for Islamic insurance which makes up five per cent of the $1.45 billion insurance market.
Covered head-to-toe in a black abaya embroidered with red and yellow flowers, Amal Abbas waits for her turn to place a deposit at Cairo’s Al Baraka Egypt Bank, one of Egypt’s two fully-fledged Islamic banks.
Although Egypt is considered the birthplace of Islamic finance, which adheres to Islamic principles banning interest and speculative trading, its growth has lagged due to past corruption scandals, while the previous government sought to enforce a more secular financial system.
But after the Egyptian revolution toppled Hosni Mubarak and his government, Muslims like Abbas are embracing Islamic banking, raising the prospect that Egypt could become another thriving centre of Islamic finance.
“I prefer Islamic finance, it keeps me far from usury and I feel my money is blessed,” said the 50 year-old research centre manager at the Mohandessin branch of Al Baraka Egypt Bank.
“My husband has been dealing with mainstream banks for more than 30 years and all his projects failed because they were funded by unblessed money.” Continue reading