Growth of Islamic Finance in Afghanistan

Afghanistan’s banking sector is small, but Islamic finance is regarded as a feature that could help attract more people to the formal economy in a country where only 15 percent of adults have a bank account.

Islamic banking in Afghanistan has nearly tripled its holdings since 2014, but is constrained by uneven profitability, limited investment options and few financing tools, the Islamic Financial Services Board said.

The country’s central bank granted its first Islamic banking licence in April to the Islamic Bank of Afghanistan, after it converted its operations from a conventional banking licence.

Afghanistan’s central bank introduced Islamic banking regulations in 2015 and is working on additional rules covering accounting and product development.

Via Reuters:

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