Algeria has launched Islamic finance products in a bid to attract money from the informal market, but bankers warn it will take more to fix the country's struggling economy.
Islamic finance – the provision of financial services in accordance with religious laws – is a fast growing sector that has been adopted in many Muslim countries.Funds are also blocked from investing in companies associated with tobacco, alcohol, pork, or gambling. "It is not only necessary to draw these resources, but to inject them into banks in order to bolster the economy," Benkhalfa said.
However, Algeria's other banks – all state-run – are now expected to follow suit by the end of the year.But Benkhalfa, who is also a member of a panel of African experts tasked by the African Union to mobilize international funds to help the continent combat the coronavirus, warned that Islamic finance is not a"miracle solution."Create trust in banks
By the end of the year, Algeria's state banks are expected to propose several Islamic finance products, including"murabaha,""ijara," and"musharakah."