note on demographic note

The population breakdown given yesterday suggests the prominence of the Middle East is (at least in terms of Muslim customers) exaggerated while Southeast Asia neglected. The same may be said of the less developed countries in Africa some of which host large Muslim populations (with Nigeria being the most populous both in absolute terms and in terms of Muslim sub-populations). The growth rate of Muslim populations in a variety of sub-regions of sub-Saharan Africa will be more rapid than anywhere else, leading to an increase in global share of Muslims in Africa in the coming decades.

Whether African countries licensing for the first time or at a gradually increasing scale follow the well-known differences between the Malaysian and the Gulf Arab approaches to Islamic finance and banking (and the underlying interpretations of Islamic commercial law) is one that should be carefully observed.

The above of course does not consider the demand for banking services or the demand for Islamic banking services originating with these Muslim populations nor does it consider assets that should come under deposit or other investment should Islamic banking and finance expand its local presence within these regions. It also overlooks the supply curve and the relative prevalence and penetration of Islamic banks into Southeast Asia as compared with Sub-Saharan Africa.

With respect to the UK and the City of London specifically in a global competition as aspiring Islamic finance sector ‘regional’ developments in Islamic banking and finance are more relevant than they might at first appear given the possibility of overseas development and investment and possible reinvestment back via financial institutions with a head office or other presence in Britain.

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