French start-up NoorAssur, specialised in Islamic finance, has announced the opening of its first office in Paris and has plans to open around 20 other branches in France in 2016.
Islamic finance provides financial services compliant with Islamic jurisprudence Shariah, banning for instance products bringing uncertainty, interest or gambling.
Launched in 2012, NoorAssur was hitherto offering Shariah-compliant products on Internet. The firm said it serves 3,000 clients of which 95% are retail investors and 5% are companies. According to its head of Business Development Mourad Chabchoub, non-Muslim investors account for 15%.
NoorAssur provides savings products, fund investment services and insurance services in partnership with SwissLife but the firm sets a target to develop current accounts in 2016. The company claims its Paris’ office is the first islamic bank ever opened in France.
Is the country set to develop its domestic islamic finance market then ?
”France gets slowly involved. In February 2008, regulation regarding Islamic finance has started to improve under the impulse of Christine Lagarde; at this time France’s economy minister,” replies Bernard Caralp, CIO and head of Asset Management at Sedco Capital, an independent Saudi manager with $4.5bn (€4bn) AUM managed under Shariah compliance exclusively.
“The country keeps an ambivalent stance. Around 6 million of people are said to be Muslims in France and according to recent reports, 40% of them would be interested in Shariah compliant products. But only six Shariah compliant funds were available last year, representing less than $150m (€134m),” he adds.
According to Caralp, there must a political will in France to promote Islamic finance development.
“On the distribution side, a few French banks have tried to enter the Islamic finance market but the mass (in terms of assets) was not enough to make this business sustainable for them.
“This is not enough for banks to invest time and money in creating a proper Islamic finance division if the market is restricted to retail investors mainly interested in real estate financing. They will do it if pension funds or institutions have the power, in line with their own compliances, to allocate assets to Shariah-compliant funds,” he says.
Jean-Baptiste Santelli, senior manager of the structure division at French law firm De Gaulle Fleurance & Associés, says that the French legal system is “relatively Sharia friendly.”