IslamicFinance.de

Djibouti is promoting Islamic finance to increase banking penetration in the tiny African nation and help fund upgrades to the country's infrastructure. Since most people are still not customers of banks, Djibouti sees sharia-compliant finance as a way to pull itself out of poverty and to assemble capital for investment. Central bank governor Ahmed Osman said banking penetration had risen from 10 percent of the population six years ago to 17 or 18 percent now, but that conventional banks were not attractive to many people for religious reasons. The spread of Islamic banking will also help authorities move more business activity from the informal economy to the formal sector.