Friday , June 14 2024

Uganda Welcomes First Islamic Bank in Country

Uganda’s government has moved to pass legislation allowing Islamic banking and the immediate licensing of Salaam Bank signalling a growing demand for Sharia-compliant financial services and products.

According to the East African, Saalam Bank, a subsidiary of a Djibouti-based lender that goes by the same name officially opened its doors in Kampala last month highlighting expert remarks which cited a growing niche in need of such services.

Uganda now joins other regional countries like Kenya and Tanzania which have taken the same route by adopting financial services and products that are Sharia compliant in their country.

In Sub-Saharan Africa the list of countries adopting Islamic banking continues to grow with Nigeria, Egypt, Gambia, Senegal, Ethiopia, and South Africa all making the list.

Uganda President Yoweri Museveni recently launched the operations of Salaam Bank, The first Islamic lender in the country.

Salaam, which has operations in Kenya, Somalia, and Djibouti, received an operating licence from the Bank of Uganda (BoU) late last year after the Ugandan Parliament passed a Bill allowing Islamic banking in the country.

According to Nanyang Technical University, the African Islamic Finance market is worth $375 billion.

With a Muslim Population of over 250 million coupled with a growing need to fund several infrastructural development projects, the Islamic finance industry is ready to maximise the huge potential found in the continent.

Islamic finance extends beyond banking to cover many other financial areas, including insurance (Takaful), capital markets, investment funds, and other financial products and services.

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