In 2007, oil prices pushed the French government to consider Islamic finance. The Minister of Economy, Christine Lagarde, asked Paris EuroPlus and treasury to assess and develop France's potential to attract Islamic Finance.
In his preview of the Islamic Finance Industry for 2012, Antoine Salion, Islamic Finance Advisor, Paris EuroPlus said in his piece titled, 'France: seeking diversity' that In the coming weeks, Chaabi Bank, the long-established French subsidiary of Moroccan Groupe Banque Populaire will open its Sharia compliant deposit account to small and medium enterprises (SMEs), thus addressing a latent need of small businesses for Islamic banking products. SMEs have voiced an important demand for Islamic products, as French Muslims are known for their entrepreneurship and represent an interesting customer base for Islamic banking.
According to Salion, hopes are now high again that France will develop a sound Islamic finance market, but much remains to be done. First, the French Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards have yet to be distributed and spread.
Second, Chaabi Bank is not yet offering the most complex products, corporate funding and mortgages. Chaabi says it is aiming at a full set of products by the end of 2012, which seems realistic in light of the recent 10-year Murabaha home financing product.
Third, wholesale banking and capital markets are yet to be developed. Chaabi's first French Islamic window should pave the way for international Islamic investment banks willing to penetrate the French market. In addition, the Sukuk market may also benefit from the current funding difficulties experienced by French international corporations, which could take advantage of the comprehensive French framework for Sukuk issuance and listing.
Regarding Takaful Insurance, he described it as an immmature topic in France, even though synergies will appear evident with the rise of distribution networks for Islamic banking products.
In his conclusion he emphasized that, among the key 2012 drivers such as the coming presidential and legislative elections in May and June, the industry will keep developing in France thanks to sound foundations and strong potential. Salion believes that the election result only effect will be to influence the pace of the industry's growth.
It is worthy to mention that EuroPlus doesn't only assemble expert bankers, but also industrial enterprises listed in the stock market and key players in the market.