Islamic finance seen eyeing Africa for growth - Moody's

MUMBAI (Thomson Financial) - Moody's Investors Service said Shari'ah-compliant banking is a recent phenomenon in Africa, discovered by most Muslim Africans only over the past decade but the potential value of the Islamic banking and finance market in Africa is huge.

Moody's said that the actual depth of Shari'ah-compliant financial intermediation was only 18 bln usd as of year-end 2007, equating to a market share of less than 8 pct of its potential size.

Additionally, the industry is focussed at this stage on its development in Africa -- more than half its assets are located in Sudan, with Egypt ranking second, but with a much lower share of around one-fifth, Moody's said.

The ratings agency said that the banking entrenchment in Africa represents an average 50 pct of the total GDP produced by African Muslims and the Islamic finance market on the continent is potentially worth close to 235 bln usd.

According to Moody's 37 Islamic financial institutions operate in Africa, serving a Muslim population of 412 mln.

Average per capita GDP on the continent was a low 1,137 usd in 2007, but given the fact that Africa is host to the second-largest Muslim population in the world, the absolute size of its economic production reached 469 bln usd last year, Moody's said.