Dec 21 2011 |
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Zam Zam thank you ma'am
By Steve Mbogo Ethiopia is expected to have its first Islamic bank by the first half of next year when Zam Zam Bank, currently in its formation stage, will start operations.Zam Zam Bank has been established but not operating since 2008 when the country's central bank, the National Bank of Ethiopia, amended the country's banking regulations to allow interest free banking. By August this year, officials of the bank, currently trading as Zam Zam Bank Share Company, said they had raised ETB330m ($19m), surpassing the initial target of ETB250m ($14.4m).
The chairman of the board of directors for Zam Zam Bank, Nasro Dino, could not be reached via telephone and email communication to his office was not replied to by the time of going to the press.
A presentation made to prospective investors indicates that the bank requires working capital of ETB250m ($14.6m), which will be kept in escrow until June 30, 2012. Ethiopian law, however, limits the ownership of interest-free banking institutions to locals, thereby shutting out potential foreign investors.
He went on to say that in order to accommodate the fast growth of Islamic finance in the region; a number of scholars from several countries were working on a model that will see one Shari'ah advisory board serving several countries, to overcome the limited availability of local, African Shari'ah scholars.
Zam Zam Bank will offer interest-free personal and commercial loans, savings accounts, letters of credit, foreign exchange, money transfer and bank guarantees once it is open.
The bank is targeting the 33.9% of Ethiopians following Islam according to the 2007 national census.
© The Islamic Globe 2011
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