Libya Bank Lending Paralyzed Amid Interest Ban: Islamic Finance
22 May 2013 07:24 GMT
 
Ali Gumma finally saved enough money to buy a plot of land near Tripoli and was planning to build a family home when he hit a brick wall: He couldn't (more)

Ali Gumma finally saved enough money to buy a plot of land near Tripoli and was planning to build a family home when he hit a brick wall: He couldn't find a Libyan bank willing to lend him the money.

"I can't afford to build it on my own," the 52-year-old university professor said in an interview in the capital. "Traditional banks are barred from offering loans because they aren't Islamic but no alternatives have been introduced."

Euphoria over a law passed this year that would make Libya the third Middle Eastern country after Iran and Sudan to ban non-Shariah compliant banking by 2015 has turned into frustration and confusion. Parliament and the central bank have distanced themselves from the decision of commercial lenders to stop offering loans immediately. The law didn't stipulate when the transition would start, according to Omar Hamaidan, a spokesman for the legislature.


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