Ethiopia: $35 million Hijra Bank trailblazing IFB

By Addis Getachew

ADDIS ABABA, Ethiopia (AA) – Hijra Bank is well set to become one of the few banks in Ethiopia trailblazing Interest Free Banking (a.k.a Islamic Banking).

The bank in the making on Sunday announced the launch of sales of public shares in a gathering held at the Golf Club in the capital Addis Ababa and attended by the organizers, experts in the field, businesspersons and religious leaders.

Accordingly, the share sales will be conducted at nine different banks as of Monday.

Speaking on the occasion, Chairman of the Organizing teams, Ahbabu Abdella said the bank was being established with a registered capital of 1Billion Birr ($35 million).

“Hijra bank will be organized with a paid up capital of half a billion Birr,” he said adding it was not the amount of capital but popularity that will determine success.

The deputy chairman Mukemil Bedru on his part said the bank will be engaging in partnerships, trade and rent/lease of machinery, which have not been common to operations of the traditional banking in the country to date.

“There have been substantial demand in the country for Interest Free Banking,” he said, adding, the current value of IFB globally stands at $2.8 trillion with an annual growth rate of 10 per cent.

In May this year, Ethiopian Prime Minister announced his government’s active support to establishment of Islamic Banking.

Mukemil said the banking sector in Ethiopia has been growing with a faster rate than ever and the value has today reached 800 billion Birr from only 15 billion Birr 10 years ago.

“The Interest Free Banking provides an alternative by expanding investment and creating employment in the country,” he said.

Speaking for his part, Ethiopian Islamic Affairs Supreme Council Mufti Hajji Umer Idris said, “Ethiopians are beginning to see equality and freedom.”

“It is a joyful time for all,” he said commending Ethiopia’s Prime Minister Abiy Ahmed for having ushered in a new era of reform since he took office in April last year.