KAMPALA|A unit of Djibouti-based Salaam Group launched in Uganda on Wednesday as the country’s first Islamic banking-compliant financial institution, the Ugandan president’s office said.
The launch of the Salaam Bank Limited’s operations follows a law legalising Islamic banking in the east African country last year.
Islamic finance follows Islamic religious principles such as bans on interest payments and also eschews investments in some activities like gambling.
Ugandan President Yoweri Museveni presided over the launch of the bank in the capital Kampala, according to a statement issued by his office.
Muslims, who constitute about 14% of Uganda’s population, have long complained that Ugandan banks lacked products compliant with Islamic sharia law.
The Muslim leadership and officials eventually pushed for an Islamic banking law to encourage Islamic banking institutions that might want to venture into the country.
While launching the Bank into service at Kololo ceremonial grounds today, the President of Uganda Rt.Gen.Yoweri Kaguta Museveni, noted with concern that most Muslims have not embraced some government programs like the Parish Development Model (PDM) because of Riba (Exploitative gains or profits made in trade).
To cure this, Museveni disclosed that he is preparing to meet with leaders of the Muslim community in Uganda to improvise a definite resolution to the issue.
“I want to meet these sheikhs and I talk to them, then we see what they call Riba, so that they explain to me well about it…” said the president
Ibrahim Abdirahman, the bank’s board chairman, was quoted as saying in the statement that the new bank could offer sharia-compliant bonds that the Ugandan government can tap to raise capital for infrastructure projects.
