The Commercial Bank of Ethiopia (CBE) inaugurated yesterday the country’s second ever full-fledged interest-free banking (IFB) branch dubbed ‘Mecca Branch’ in Addis Ababa in a view to satisfying the growing demand for Islamic finance.
During the inauguration ceremony, CBE’s President and CEO Bacha Gina said that the opening of the branch showcased the Bank’s engagement to address customer’s requests and run the business independently from the conventional wing.
According to Bacha, the Bank appointed Sharia Advisory Committee in a bid to ensure Sharia compliance thereby boosting customer’s confidence in the service and address uncertainties concerning the possible mixture of interest-free deposits with the money in the conventional system.
The President noted that members of the Committee have been playing a significant role in encouraging the Muslim community to utilize the IFB service capitalizing on their knowledge and reputation thereby helping efforts to bank the unbanked capital. “The Committee has also been contributing share in supporting government’s vision of creating financial inclusion so that sustaining the economic growth.”
He further stated that the Bank has been providing IFB service in over 1,443 branches across the country and it has close to 2.2 million customer base in the scheme whilst the total deposit hits over 25.7 billion Birr.
“The CBE has been disbursing over 1.1 billion Birr loan for halal businesses so far and the Bank would consolidate its engagement in financing businesses that have been running in accordance with Sharia law.”
According to Bacha, 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.
The Bank has identified IFB potential areas and it will open dedicated branches in Addis Ababa and regional states, the President remarked.
Ethiopian Islamic Affairs Supreme Council (EIASC) President, Mufti Hajji Omar Idris said on his part that CBE’s decision to inaugurate dedicated interest-free branches manifests its respect to satisfy the Muslim community’s desire through availing the service that comply with Sharia’s teachings.
Stating that the growing presence of IFB branches would enhance the Muslim community’s culture of saving, the Mufti called on the faithful to take part in building the economy through actively utilizing CBE’s non-interest services.
Government officials, CBE’s authorities, members of the Sharia Advisory Committee and other stakeholders attended the inauguration ceremony.
It was recalled CBE inaugurated country’s first-ever interest-free banking branch, named ‘Bilal Branch’ in last month in Addis Ababa.
The Ethiopian Herald October 10/2019