Using of islamic banking products in Algeria as opportunity of strengthening of the financial sector of the country

Abstract

In the 1990s the countries of Northern Africa the variants of financing projects based on the Shariah were considered quite skeptically. Algeria was not an exception in that issue. However, recently solving the problem of feasibility of implementation of Islamic banking into the financial system of the country, the government has faced a dilemma: on one hand, there is need in the reformation of the country's economy which directly depended on world oil prices, on the other hand, the implementation of banking could cause the expansion of radical forms of political Islam in the country. Accordingly, it must be noted that due to the absence of the clear unified normative and legal basis, deals made in accordance with the Shariah didn't have legitimacy, every counterpart, party to the transaction considered and interpreted a product or service from the point of view of their own financial literacy. The crises in the country, including its financial sector, made the government to implement a number of activities aimedat the diversification of the country's economy andattracting foreign investors by opening Islamic financial institutions inside the country.