The reality of adopting Islamic banking windows in Algerian public banks

Abstract

This research paper aims to analyze and evaluate the current state of Islamic banking windows in Algerian public banks, focusing on the diversity of products offered and the growth in financing volume. A descriptive-analytical approach was employed, on sample of two banks: the Algerian Foreign Bank (BEA) and the Bank of Agriculture and Rural Development (BADR). Financial statements for the period 2021–2024 were analyzed. The results show that the Islamic banking window experience represents a significant step towards strengthening Islamic banking in Algeria. This is achieved by offering financing products compliant with Sharia principles, such as Murabaha, Ijara, and Salam. The study confirms a relative diversity in the financing methods used, despite varying levels of demand. This diversity has contributed to a gradual annual growth in the volume of Islamic financing, even though it is affected by a number of economic and regulatory factors. The study also revealed a growing interest in Islamic savings and investment accounts, reflecting increasing public awareness of the importance of Islamic banking. Conversely, this experiment still faces challenges, most notably weak promotion and a shortage of specialized human resources, which may limit its effectiveness and ability to achieve widespread adoption and greater benefits across all sectors.