Algeria has launched Islamic finance products in a bid to attract money from the informal market, but bankers warn it will take more to fix the country’s struggling economy.
Falling oil prices and the coronavirus pandemic have battered the North African country, triggering alarm bells among officials and experts.
The International Monetary Fund (IMF) forecast that Algeria’s economy will shrink 5.2 percent this year.
Prime Minister Abdelaziz Djerad has warned of an “unprecedented economic situation”, and experts have estimated unemployment at nearing 15 percent.
In Algeria, Africa’s largest nation and home to 43 million people, most transactions are done in cash circulating outside the formal banking sector, said professor Mohamed Boudjelal, an expert on Islamic finance.
Many Algerians “turn their nose up” at conventional banking, Boudjelal said.
Some Muslims believe that the traditional banking system is incompatible with their faith.
