(Ecofin Agency) - In Algeria, three public lending institutions, namely the Banque de l’agriculture et du développement Rural (BADR), the Caisse Nationale d’Epargne et de Prévoyance (CNEP) and the Banque de Développement Local (BDL) will start offering Islamic finance services before the end of the year.
Being Sharia-compliant, these services will be interest-free.
By deciding to enter the Islamic finance market, these institutions wish to respond to the needs of a group of customers that have been left out for too long in the country. They also aim to tap into a sector with a great, yet underexploited, potential in terms of savings.
Let’s recall that currently, in Algeria, only Al Baraka Bank and Salam Bank are allowed to offer participative finance products to their clients. They are in fact competing in this sector with private lenders that offer both traditional and Islamic banking services.
Boualem Djebbar, president of Algerian banks and financial institutions’ association, commenting the new development, said a democratization of Islamic finance by 2018 should be expected in the country.