KAMPALA, (Reuters) – 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. 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.
Source: Reuters
