ADDIS ABABA – Hijra Bank, the nation’s second fully-fledged, interest-free bank to obtain operating license from the National Bank of Ethiopia (NBE), inaugurated Wednesday a nine-storey headquarters that costed 130 million Birr in the presence of government officials and religious fathers.
Speaking in the press conference, Hijra Acting President Dawit Keno said that the bank, which obtained 9,000 shareholders with 1.2 billion Birr subscribed capital, of which 700 million Birr is paid-up, would open the first door over the next two months followed by several branches.
The acting president further stated that the bank has been capitalized on the commitment leadership to establishment of Islamic banking and has been engaged in purchasing the core banking system from international bidders. Hijra has also been equipping its capacity with competent professionals with the required skill and experience in the non-interest banking.
As to Dawit, the headquarter, which make the bank in the making a pioneer to commence service by its own building, would have a paramount importance to provide a seamless service for the ever-expanding IFB customers in the country.
“We are considering competition as a means to success and will employ meticulous strategies and approaches to remain active player in Ethiopia’s emerging Islamic finance thereby contributing share for the realization of financial inclusion in the country.”
Hijra Bank Board Chairperson Mukemil Bedru said on his part that the bank is in a good position to meet the NBE’s recent directive to new banks rise their paid-up capitals to five billion Birr within seven years. Hijra could achieve the criterion within four or five years.
Noting IFP windows in conventional banks have been primarily offering the murabaha (cost-plus financing) service, the chairperson highlighted that Hijra would provide many non-interest banking products and services which have not been common to operations of traditional banking to date.
“There has been substantial demand in Ethiopia for Interest Free Banking,” Mukemil stated, adding that the current value of IFB globally stands at three trillion USD with an annual growth rate of 10 percent whilst Islamic capital market is thriving. Central bank’s recent financial reform is widely credited to change a directive that limited IFB service to the window model.
The non-interest banking provides an alternative by financing halal business and investment ventures and creating huge employment in Ethiopia and Hijra will be engaging in partnerships with actors in the financial industry to supplement the country’s development, he remarked.
Ethiopian Islamic Affairs Supreme Council President Mufti Haji Omar Idris on his part applauded government’s role in satisfying the age-long request to Islamic finance with a view to building economy through a determined effort of people with different religious backgrounds.
About two years ago, the central bank issued a directive that allows full-fledged IFB service, triggering many banks including ZamZam, Hijira, Zad, Kush, Huda and others to start the establishment process.
BY BILAL DERSO
The Ethiopian Herald 30 April 2021
