Uganda taps into Islamic Banking Market with entry of Salaam Bank..

Uganda government’s move to pass legislation allowing Islamic banking, and the subsequent licensing of Salaam Bank, show a growing demand for Sharia-compliant financial services, Salaam, a subsidiary of a Djibouti-based lender by the same name, opened doors formally in Kampala last month, underscoring what officials said was to serve a growing niche of clients…

Uganda now joins other regional peers such as Kenya and Tanzania, which have opened a window for the issuance of financial services and investment products based on Sharia principles, The two countries are among a growing list of Sub-Saharan African states placing greater emphasis on Sharia-compliant financial products as alternative financing, according to a report by the Singaporean Nanyang Technical University dated March 2022.

Uganda President Yoweri Museveni last month officially launched the operations of Salaam Bank, the first Islamic lender in the country, after more than 20 years of waiting giving Ugandans a chance to access both Islamic and conventional banking products, Salaam, which has operations in Kenya, Somalia and Djibouti, received an operating licence from the Bank of Uganda (BoU) late last year after the Ugandan Parliament passed a Bill allowing Islamic banking in the country.

With a Muslim population of over 250 million, coupled with a growing need to fund a multitude of infrastructure development projects, the Islamic finance industry is ready for the pick across Sub-Saharan Africa, Sharia-compliant financial institutions operate businesses in 72 countries around the world and Islamic banking remains the largest Islamic finance segment with a 70 percent share of the Islamic finance market.