n Development Finance Agenda (DEFA) - Development of Islamic finance in sub-Saharan Africa




While the Islamic finance industry has been growing rapidly in many regions, it is not yet significant in Sub-Saharan Africa (SSA). However, several features make Islamic finance relevant to Africa's development, particularly the ability to foster financing for SMEs and infrastructure development. In a recent paper, we provide a survey on current status of Islamic finance in SSA, with special focus on banking and sukuk (Islamic bond). Should they wish to develop the market, policy makers could introduce Islamic financing windows within the conventional banking system and facilitate sukuk issuance to tap foreign investors for development of infrastructure. As Islamic banking grows, policy makers would have to adopt regulatory and supervisory standards to address risks as they emerge.


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