Experience of Islamic banks in West Africa

Islamic banking has been practiced in West Africa since 1983. Subsidiaries of the Dar Al-Maal Al-Islami (DMI) were set up that year in Guinea, Niger, and Senegal. Sub-Saharan Africa is facing tough economic times that weather problems have worsened. Nationalization programs and low amounts of foreign exchange have further hindered development. The total capital of DMI Massaref and investment companies totaled over 900 million Guinean francs, equivalent to $1.5 million at its founding. However, it was discovered over the past five years that merging the Massaref and the investment companies would increase efficiency and profitability. There were around $35 million in almost 27,000 accounts in the DMI subsidiaries at the end of 1987. Among the policies DMI overseers adopted to improve performance were: trying out and using adequate accounting systems; improving the skills of local management; improving the ability to provide services to users; and limiting the costs of running br