ADDIS ABABA – The decision the Commercial Bank of Ethiopia (CBE) has made to open country’s first-ever interest-free dedicated branch said to have significant importance to answer the Muslim community’s long-standing quest to get alternative banking that suit with their religious teaching.
The CBE took the lead in Ethiopia’s banking industry in inaugurating fully-fledged interest-free banking (IFB) branch dubbed ‘Bilal Branch’ in last Saturday in Addis Ababa that would exclusively operate under Sharia regulation.
Approached by The Ethiopian Herald, Ethiopian Islamic Affairs Supreme Council Deputy President and Chairperson of CBE’s Sharia Advisory Committee Dr. Jeylan Kedir said that the opening of IFB branches is instrumental in paving ways for Muslim-owned businesses access to loan, foreign exchange and other banking services.
The availability of a dedicated interest free banking centers is also vital to curb the Muslim community’s economic deprivation due to the absence of Islamic banks and address uncertainties concerning the possible mixture of interest-free deposits with the money in the conventional wing.
Dr. Jeylan noted that the establishment of IFB branches is long awaited by Muslims and expressed his belief that the financial inclusion is significant to bring about desirable outcomes in sustaining the economic progress and helping efforts to enable Ethiopia join the club of Middle-income economies.
The scholar stressed that Prime Minister Dr. Abiy Ahmed has a unique contribution in giving all-out support for the establishment of an Islamic banks and IFB branches in the country.
Former President of Oromia State Junedin Sado said on his part that the current financial reform that permit the existence of IFB would have a paramount importance to mobilize the Muslim community’s active participation in building the economy.
Applauding the attention the current government has attached to ensure the equal participation of people with different religious backgrounds, Junedin said that Premier Abiy’s decision to allow the operation of Islamic banks is a ‘historical act that rectify unfairness in the financial industry.’
He also expressed admiration for CBE’s management to take the initiate to upgrade the current window level service to branch level expressing optimism that the growing presence of IFB branches would enhance the Muslim community’s culture of saving.
In his message in the inauguration ceremony, CBE President Bacha Gina said that the Bank has been providing IFB service in 1,398 branches across the country and its total deposit reached to 23.9 billion Birr and it has customer a base of over two million in the scheme.
According to the President, the Bank has introduced an interest-free export financing facility known as Qard and trade based mode of financing (Murabha) for IFB customers and recently introduced Labbaik Saving Account for Hajj and Umrah pilgrims. Furthermore, CBE has an IFB Diaspora Banking Service and Salam ATM card.
CBE has identified IFB potential areas and it will open dedicated branches in Addis Ababa and regional states, Bacha remarked.
The Ethiopian Herald September 10/2019
BY BILAL DERSO
