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HomeEconomyUgandan President Launches the First Interest-Free Islamic Bank

Ugandan President Launches the First Interest-Free Islamic Bank

Ugandan President Yoweri Museveni officially opens Salaam Bank, the country's first interest-free commercial Islamic bank in Kampala Uganda this week.

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Ugandan President Yoweri Museveni officially opens Salaam Bank, the country’s first interest-free commercial Islamic bank in Kampala Uganda this week.

According to President Museveni, Islamic banking has the potential to significantly contribute to the development of Uganda’s financial sector. He says that he hopes it will attract more Muslims to invest in the country’s economy.

“The government does not believe in discrimination and treats all Ugandans equally, regardless of religion or tribe. This attribution has allowed the country to develop socially and economically. I encourage us to fight poverty and create wealth. Some people were initially opposed to the establishment of Uganda’s Islamic University. I said no, let it operate. It has now produced a large number of graduates in various professions, including non-Muslims. When they told me about Islamic banking, I told them I had no problem with it. I said we should let them operate and that is why we have Salaam Bank now,” says Museveni.

In September last year, the Bank of Uganda granted its first Islamic banking license to Salaam Bank Uganda, a subsidiary of a Djibouti-based bank after parliament passed legislation authorizing Islamic banking, which Museveni signed into law.

Ugandan cleric from the Wakiso district of central Uganda Sheikh Erias Kigozi attended the opening ceremony too and says that he speaks for all Muslims in gratitude and thanks.

“We thank President Museveni for being a good leader who cares about Muslims and makes it possible for them to have a banking system based on Islamic principles,” says Kigozi.

Djibouti’s Foreign Minister Mahmoud Ali Youssouf, for his part, also extended warm greetings to Museveni on behalf of his country’s President Ismail Omar Guelleh.

“We are inspired by the ambition of the Salaam Group to broaden the scope of its activities all over the continent, including Uganda, which is a safe and solid financial institution,” says Youssouf.

Commenting on the occasion, Salaam Bank Chairperson Ibrahim M. Abdirahman says the population, including non-Muslims, embrace Islamic banking because of its values.

According to S&P Global Ratings, the global Islamic finance industry is expected to grow by around 10% in 2024, despite the economic slowdown, following a similar expansion in 2022.

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