The Islamic finance promises: Evidence from Africa

Abstract

The objective of this paper is to improve understanding of the market for Islamic finance in Africa. Specifically the paper provides a mapping of Africa-based Islamic finance providers, quantifies the amount of foreign Islamic funding received by Africa and compares performance of African Islamic and conventional banks. We find that there are significant cross country variations in the way Islamic banking has been developed in Africa and in the type of services offered. Our empirical findings also support the superior efficiency of Islamic banks and suggest that Islamic banking could be beneficial for Africa.