In a groundbreaking development, Uganda has issued its first-ever Islamic banking license to Salaam Bank Limited. The issuance took place in the presence of (central) Bank of Uganda's Deputy Governor, Michael Atingi-Ego, and other dignitaries.

This milestone achievement comes after Uganda recently passed legislation that legalizes Islamic banking in the country, aligning its financial system with Shariah principles.

Salaam Bank Limited, a subsidiary of Salaam African Bank based in Djibouti, is set to lead the charge in providing Islamic banking services to Ugandans. This move is expected to impact Uganda's financial landscape significantly.

Islamic banking operates under the principles of Shariah law, which prohibits charging interest and other activities considered detrimental. As a result, this financial offering is open to all, irrespective of religious beliefs, and is seen as a more ethical and sustainable form of banking. In this vein, M. Michael Atingi-Ego stressed that :

“This financial offering can benefit everyone, regardless of their religious beliefs. Of course, there are risks associated with any new venture. However, I am confident that Salaam Bank Limited has the expertise and resources to manage these risks.”

Furthermore, the benefits of introducing Islamic banking to Uganda are numerous. It can unlock fresh funding opportunities for both businesses and individuals, promote financial inclusion, diversify financial products, encourage profit and risk sharing, and stimulate investment into the real economy. While giving his remarks during the ceremony, M. Michael Atingi-Ego also noted that :

“This is a significant milestone for Uganda, and it is a testament to the commitment of all involved to promoting financial inclusion and economic development,”

The launch of Salaam Bank Limited marks a historic moment for Uganda, as it positions itself for financial growth and inclusion. This development is in line with Uganda's national vision for 2040, which aims to transform the country into a modern and prosperous nation.

As Africa's unbanked populations continue to seek inclusive and ethical banking solutions, Islamic banking is set to play a pivotal role in Uganda's financial sector, offering new avenues for deposits and investments. The banking sector is now tasked with introducing Shariah-compliant financial products to meet the diverse demands of the population.

With Salaam Bank leading the way, Uganda is on the path to achieving greater financial inclusivity and bolstering its economic prospects. This historic step underscores Uganda's commitment to embracing innovative banking solutions that benefit all of its citizens.

It is worth recalling that Salaam Bank Limited penetrated the Ugandan financial landscape in August 2022 through the acquisition of Top Finance Bank by the parent institution, Salaam African Bank of Djibouti. At the time, Salaam African Bank was pursuing its expansion strategy, having already set up operations in Kenya, Ethiopia and Malaysia.

IF NEWS