The Cameroonian government announced the opening of new Islamic credit lines as part of the National Strategy for Inclusive Finance (SNFI) 2023-2027 developed by the Ministry of Finance (Minfi). CFA3 billion will be dedicated to this project.

This offer aims to promote activity within the financial system. “Technical assistance” will also be provided to beneficiary financial institutions “to ensure their compliance with practical requirements, before the development of an offer of Islamic banking products,” the government said. An additional guarantee for loans at risk or not repaid will be developed through a dedicated fund.

These incentives are designed to promote the emergence of institutions specializing in Islamic financing in a context where the activity is still at an “embryonic” stage. To date, only Afriland First Bank and CCA Bank have an Islamic window and no institution is fully dedicated to it. However, Cameroon benefits from Islamic financial assistance. At the end of 2022, the Islamic Development Bank (IsDB) estimated its investment portfolio in Cameroon at $1.1 billion (about CFA683 billion).

Islamic finance includes transactions and financial products that conform to the principles of Quranic law and are specific to believers in the Muslim religion. It implies the prohibition of interest, speculation, the prohibition of investing in sectors considered illegal (alcohol, tobacco, gambling, etc.), as well as the respect for the principle of sharing losses and profits. The most common products are Murabaha, Musawama, Ijara, Salam, Istisna, Mudaraba, and Musharaka among others.

Source: Business in Cameroon