Meles Zenawi

Islamic Banks to enter financial sector in Ethiopia

Finally responding to a strong public demand, the National Bank of Ethiopia (NBE) is about to approve a directive that paves the way for the establishment of Islamic banks. The directive also opens doors for currently operational commercial banks to create an interest-free banking wing. To accommodate muslims, who are by Sharia’h – Islamic law – prohibited from taking or giving interest, commercial banks are currently offering zero interest. However, the sector will, according to Prime Minister Meles Zenawi, remain closed from foreign banks involvement. After the establishment of the first private commercial bank in Dubai, more than fifty interest-free banks were established in Muslim countries and as well as in European countries such as Denmark, Luxembourg, Switzerland and the UK.

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