Finance, Planning and Economic Development Minister, Matia Kasaija, has affirmed Government of Uganda’s commitment to establish an Islamic Bank in partnership with the Islamic Corporation for the Development of the Private Sector (ICD) and the Private Sector in Uganda.
This was during the first partially virtual meeting on the formation of the Islamic Bank in Uganda and the partnership offer by ICD to Uganda.
ICD is a multilateral development financial institution and member of the Islamic Development Bank group.
The meeting was also virtually attended by Ayman Amin Sejiny, the Chief Executive Officer of ICD.
Mr Kasaija said President Yoweri Museveni has already accepted ICD’s expression of interest to partner with Government and Private Sector Enterprises in Uganda.
“The Government looks forward to taking advantage of the long-term project financing, technical support and advisory services offered by ICD,” said Mr Kasaija.
He also said an Islamic Bank in Uganda will contribute in deepening financial inclusion, increase access of the Private Sector to Capital and promote job creation.
The ministry of finance will be a shareholder on behalf of Uganda with 50% shares, ICD will have 33% shares while the Private Sector will take 17%.
How Islamic Banks work
Islamic Banks work on the principles of an interest free banking. Thus, Islamic banks make available accounts which provide profit or loss instead of interest rates. The banks use this money collected by them and invest in something that is shariat compliant, that is not haraam and does not involve high risks.