The son-in-law of Tunisia’s president launched the country’s first Islamic bank on Friday to tap into growing demand for alternative finance and investment products in the secular-leaning country.
North Africa has begun to embrace Islamic finance after years watching from the sidelines, partly to channel more Arab Gulf petrodollars into the region.
Sharia-compliant finance bans the receipt of interest and investments in companies dealing in alcohol and gambling. The global industry is estimated to be worth around $1 trillion, according to sector analysts.
Azzitouna Bank, set up with capital of $30 million, will develop Islamic loan and saving products for businesses and individuals, said Sakher Materi, who is married to the daughter of 73-year-old President Zine Al-Abidine Ben Ali.
"Azzitouna Bank will develop a comprehensive and innovative range of banking products and services … in accordance with the principles of Islamic finance," Materi said.
Materi leads Princesse Holding, which contributed 51 percent of the capital with the rest shared by local partners. Capital is expected to grow to $71 million in 2011, he said.
The bank is starting with nine branches and managers want to grow to 20 next year.
State news agency TAP said Azzitouna would have a mission to promote commerce across the Maghreb. North Africa has one of the weakest levels of cross-border trade in the world.
Tunisia has one of the most open economies in the region and attracts substantial investment from the European Union, something that is expected to accelerate after 2014, when the government has said it will make the currency fully convertible.
Tunisia and Morocco authorized Islamic finance in 2007, partly to channel more investment into their fast-growing tourism and real estate industries.
Several Moroccan banks now offer Islamic finance products but they have been slow to catch on, with some consumers complaining of uncompetitive commercial terms. Islamists have blamed the government for deliberately hindering their growth.