Bank seeking approval

Tunisia's El Wifack Leasing has applied to regulators to become the country's third fully-fledged Islamic bank. El Wifack, which has its debt rated BB+ by Fitch Ratings, also said it planned to raise its capital by five million dinars ($3.1m) to 25m dinars, regardless of whether it received approval to operate as an Islamic bank. Currently, Sharia-compliant business accounts for just 2.5 per cent of the Tunisian financial sector with only two fully operational Islamic banks, Zitouna Bank and the Tunisian arm of Bahrain's Al Baraka Banking Group. Last month, parliament approved a law that will allow the state to issue sukuk. The Jeddah-based Islamic Development Bank has offered Tunisia a financial guarantee to issue a sukuk worth $600m, though the issue could be delayed to 2014 because of political instability and approaching elections.

El Wifack Leasing applies for approval to practice as Universal Islamic Bank

The board of directors of El Wifack Leasing company wants to transform itself into a Universal Islamic bank and has submitted an application to the Central Bank of Tunisia (BCT) in order to get the approval. The transformation of the company comes by virtue of the decision taken during its meeting last March 28.

«El Wifack Leasing» veut se transformer en Banque islamique

Le conseil d’administration de la société « El Wifack Leasing » a déposé auprès de la Banque centrale de Tunisie (BCT) une demande d’agrément pour la transformation de la société en Banque islamique universelle. Dans un communiqué publié sur le site du Conseil du marché financier (CMF), la même source souligne que l’instruction du dossier d’agrément demeure encore au stade initial et que le conseil d’administration de la société El Wifack Leasing ne peut s’exprimer jusque là sur les issues potentielles que peut prendre cette demande. A défaut d’obtention de l’agrément, la société continuera à développer son activité et lancera sa deuxième tranche d’augmentation de capital, a avancé El Wifack Leasing.

Tunisia approves the use of Islamic bonds, sukuk

The NCA approved a bill that will legalize Islamic bonds or Sukuk on last Wednesday. The voting came out with a smashing majority of 102 votes against 3. The new law is likely to stimulate investments coming from the rich region of the Gulf and and close in the gap of the budget deficit. Tunisia's budget deficit is likely to raise to $3.2 billion for the incumbent financial year.

Tunisia may delay Sukuk issue to next year

Tunisia's first issue of a sukuk is likely to be postponed to next year. Tunisia had originaly planned to issue a sovereign sukuk this July to raise $700 million. Thus, the government wanted to push through a legislation to permit the issue, and hoped parliament would approve the bill by end-April or early May. But so far, the parliament has not begun considering the legislation because it has been occupied drafting a new constitution that would permit elections expected later this year. Postponing the $700 million issue will increase pressure on the country's budget this year. Tunisia is running a large state budget deficit, which it has projected at about $3.2 billion this year, and the sukuk was intended to help fill that gap. Tunisia might have to use IMF funds to fill the gap left by the sukuk delay.

Tunisia gets $1.2 bn funding from Islamic Development Bank

Tunisia has won $1.2 billion in funding from the Islamic Development Bank (IDB), aimed at backing industrial, agricultural and trade projects. The IDB funding line will include loans and grants, and will be for three years, with disbursements of $400 million each year until 2015. The IDB has also given Tunisia a financial guarantee to issue a sukuk worth $600 million before 2014. Tunis is also in talks with Qatar about the Gulf state making a deposit at the Tunisian central bank with easy conditions. The assassination in February of opposition politician Chokri Belaid triggered the worst street violence since the revolution. Elections expected towards the end of this year will create fresh uncertainty. The state budget deficit is expected to rise to around 5.9 percent of gross domestic product this year from 5.1 percent last year.

Islamic finance in Tunisia could reach 25-40% share of sector

Tunisia's fledgling Islamic finance industry could take a 25 to 40 percent share of the country's financial sector in five years' time if necessary rules, consumer education and private investment plans materialize, according to a Thomson Reuters study. Currently, sharia-compliant business accounts for just 2.5 percent of the Tunisian financial sector. The study estimates that Islamic financial assets in Tunisia could reach $17.8-$28.5 billion by 2018, up from $1.4 billion at present. Some industry practices that are controversial among some Islamic scholars, like tawarruq or commodity murabaha, are generally being avoided in Tunisia, the study found. One boost for Islamic finance in Tunisia would be issuance of the country's first sukuk, which the government is planning. Islamic Development Bank (IDB) has given Tunisia a financial guarantee to issue a sukuk worth $600 million. Last week, the IDB extended said it would extend $1.2 billion in funding to Tunisia for industrial, agricultural and trade projects.

Tunisians Look to Islamic Finance To Address Economic Woes

In Tunisia, the development of Islamic banking and Islamic insurance primarily depends on the introduction of a law that is more in line with market needs and expectations. Still, Mahfoudh Barouni, an expert in banking and finance, believes that the imperfections of the existing law have not so far hindered the smooth development of Islamic finance. In the past, there were already laws governing the sector that had been drafted according to market needs, but this legislation did not actually govern the Islamic finance sector. Currently, there are texts that legislate Islamic finance and grant all Tunisians the freedom to choose between Western and Islamic finance. Speaking on the topic of Islamic insurance, the CEO of Zitouna Takaful, Makram Ben Sassi, recalled that this business has existed in Tunisia for 30 years. Yet, the real problem is that there is a lack of awareness and responsibility rooted in the mentality of Tunisians in general.

Tunisia: Co-Operation Agreement to Be Signed Between Tunisia and IDB

Chairman of the Islamic Development Bank (IDB) Ahmed Mohamed Ali said that the group is expected to sign, on Thursday, a strategic co-operation agreement with Tunisia. This agreement will reportedly open new co-operation prospects between Tunisia and several African countries, to which Tunisia could provide assistance in several sectors, whether public or private. An IDB delegation will take part in "Tunisia's Forum on Investment," on June 13-14. Moreover, IDB expressed its will to strengthen relations with Zitouna Bank, the first Islamic bank in Tunisia. Besides, Mr. Mohamed Ali pointed out that IDB is ready to contribute to the support and funding of the micro enterprises' programme, as part of supporting Tunisia's efforts in fighting against poverty.

BH also wants in on Islamic insurance

With strong support from a government dominated by the Ennahda party, Islamic finance has become an El Dorado of sorts for Tunisia’s financial establishments. And this despite the fact the constituent parliament hasn't yet adopted the least regulation for such operations which were taboo during the days of Zine El Abidine Ben Ali. An affiliate of the state-owned Banque de l'Habitat (BH), Assurances Salim, is poised to break into the market for Islamic insurance and re-insurance. In the works since last year, the operation will lead to the creation of Attakafoulia, a limited liability company with an initial registered capital of €5 million.

Tunisia: IBD to Hold First Investment Forum in Tunisia

The Islamic Development Bank (IDB) will organise the first investment forum in Tunisia to be held as part of the Deauville co-operation.The event will take place in June 2013. Minister of Development and International Co-operation Lamine Doghri commended the offer presented by the IDB concerning the completion of the elaboration of a strategic partnership document with Tunisia (2013/2015).

The World Social Forum: An Energy Boost for Arab Social Movements

More than 5,000 organizations and over 60,000 participants took part in this year’s World Social Fórum. The four day event was held at the University of Tunis on the outskirts of the Tunisian capital. Among the 1000 workshops offered, popular themes were climate change, women, migration, globalization and economic justice. However, workshops on issues related to sub-Sahara Africa, The U.N., and the wars in Afghanistan and Iraq were absent. On the third day, two groups, one supporting President Assad, the other one supporting the opposition were confronting each other. A scuffle ensued and Forum organizers had to intervene. Some organizers proposed that the next Forum, to be held in two years, also take place in Tunisia to build on the contacts and structures built during this year's forum.

Tunisia plans 1bn dinar sukuk

Tunisia's government is working alongside the Islamic Development Bank to pave the way for a 1bn dinar ($700m) sukuk sale scheduled for later this year. According to finance minister Elyes Fakhfakh, it would set a benchmark for companies seeking to tap the Islamic debt markets. He said the government would target 80 per cent external investors and 20 per cent domestic. However, the lost of the investment-grade rating, slow economic growth and bank liquidity concerns may put investors off the government’s sukuk. The country is also seeking a $1.7bn loan from the International Monetary Fund to help stabilise the economy and plans to issue US government-backed bonds.

North Africa needs private sector investment, not charity.

Tunisia, the Arab world’s first democracy, is under threat because of a public-private policy initiated by Secretary of State Hillary Clinton. The real failure can be traced to a decision on her part to mandate non-profits and non-government organizations to promote private sector investment in the region since these ignore the dynamic nature of the numerous private sector companies in Tunisia, Algeria and Libya. The economic policies originating from Washington, DC. have inflicted enormous damage and put current investments by companies in the US, Europe and the gulf sovereign wealth funds in Abu Dhabi and Doha at risk.

Tunisia's largest Sharia-compliant investment fund launched

United Gulf Financial Services - North Africa has announced the launch of its 'Themar Investment Fund', with a capital of TND 50 million (approximately US$ 32 million). The fund targets small and medium Tunisian institutions seeking financing in different business sectors that support the Tunisian economy. Priority is given to existing and restructured projects in urban areas. According to Mohamed Fekih, Chairman of UGFS - North Africa, the fund will contribute to boost and diversify the Tunisian economy as well as increase Foreign Direct Investment and further develop Islamic banking in the country.

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Still springtime in North Africa? [Banker Middle East]

North Africa is moving towards the development of the Islamic financial industry as a response to the protests in several countries of the Arab world. Although there are some difficulties to overcome like low banking penetration and limited development of retail banking in general, there ist still potential for growth and progress. However, until a more stable political environment is provided, Shari'ah-compliant banking will be a niche market in North Africa.

Arab Spring Needs a Mini-Marshall Plan

The euphoria of the Arab Spring has turned to disappointed expectations because building Arab democracies with open economies has proved to be much harder than expected. Countries like Tunisia, Egypt and Libya are stuck in a situation of instability which hampers economic recovery. Meanwhile, lack of growth and jobs nurtures instability. If the vicious circle is not broken, it is highly probable that radical Islamists will become more active. Thus, modernity would be rejected and a relapse to the corrupt crony-state systems would threaten to become reality. That is why an altered mini-version of the Marshall Plan could play the role of the necessary bigger and more focused effort.

Sukuk sales may break $46b record on debuts

This year's record of $46 billion in terms of global sukuk sales is very likely to be exceeded in the coming year. A key reason is that countries like Oman, Tunisia and Egypt are just entering the market. Borrowing costs on Sharia-compliant debt have decreased 11.4 percentage points reaching 2.82% since the end of 2008 due to central banks in Europe, the US and Japan pumping funds into their economies in order to enhance growth rates. A rise in the Islamic banking assets will drive the demand so that it can reach $1.8 trillion next year. Compared to that, in 2011 the demand was $1.3 trillion.

Tunisia: Qatar to finance purchase of four Airbus

Tunisian government became an offer for financing of the purchase of four brand new airplanes from the Qatari Islamic Investment Bank. The discussions were led among the management of the bank, the Minister of Transport of Tunisia and the CEO of Tunisair.

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