In Uganda, Salaam Bank Limited, a unit of the Djibouti-based Salaam Group, commenced operations on Wednesday as the nation’s inaugural Islamic banking-compliant financial institution, as stated by the Ugandan president’s office. This launch follows the enactment of a law last year legalizing Islamic banking in the East African country. Islamic finance adheres to religious principles such as prohibiting interest payments and refraining from investments in activities like gambling.
Ugandan President Yoweri Museveni oversaw the bank’s inauguration in the capital, Kampala, as reported by his office. With Muslims comprising approximately 14% of Uganda’s population, there had been longstanding grievances regarding the absence of banking products in line with Islamic Sharia law. Consequently, Muslim leaders and officials advocated for an Islamic banking law to attract institutions adhering to Islamic finance principles into the country.
Ibrahim Abdirahman, the bank’s board chairman, emphasized in the statement that the new bank could introduce sharia-compliant bonds, which the Ugandan government could utilize to finance infrastructure projects. This development marks a significant step in addressing the financial needs and preferences of Uganda’s Muslim population while fostering avenues for ethical investment aligned with Islamic principles.