“The Oromia International Bank managed to mobilize 300 million Birr within two months since it introduced the new banking service last December,” Nuri Hussein, the acting director of the bank’s interest-free banking department, told Anadolu Agency.
“Currently, the Islamic banking service is being offered at 46 branches of the bank,” he said, going on to say that the number of branches offering the service will increase to 73 by July.
Islamic banking was introduced in Ethiopia in 2013 in an effort to meet the demand of Muslim clients for usury-free banking services.
Muslims are forbidden by their religion from usury, receiving or paying interest on loans.
“The service is generally targeting the Missing Middle, which refers to the financing gap in capital in emerging markets that lies above micro-finance and below traditional institutional financing,” Hussein said.
According to the bank executive, some foreign investors and embassies are asking for information about Islamic banking.
“We have more than 4,000 customers, who have deposited in the Islamic banking program,” he said. “Customers are now depositing on average 2 – 2.5 million Birr on daily basis.”
Established in 2008, the Oromia International Bank is the first private bank to implement interest-free banking in the Horn of Africa country.
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