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A new chance in Egypt for Islamic finance

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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.”

According to a 2009 report by consulting firm McKinsey, Islamic banking only accounts for 3 to 4% of Egypt’s USD 193 billion banking industry. That compares with 46% in the United Arab Emirates.

“In a post-Mubarak era, the urgency of rebuilding and changing things will clash with the absence of resources and lack of money,” said Ibrahim Warde, adjunct professor at The Fletcher School of Diplomacy at Tufts University.

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Posted by on April 23, 2011. Filed under Africa,Economics,Egypt,Islam,Law and Religion. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

One Response to A new chance in Egypt for Islamic finance

  1. Rafiq A. Tschannen

    April 23, 2011 at 7:32 am

    All the husbands projects failed? I hope that Islamic Finance will not get a bad name when his projects financed by an Islamic bank fails too. May be he should just leave the business activities up to his wife…