SHAFAQNA -Â Ethiopiaâ€™s Muslim community is only just beginning to use Interest-Free Banking (IFB), according to a Commercial Bank of Ethiopia (CBE) official who spoke with Anadolu Agency.
In an exclusive interview, Ephrem Mekuriya, CBEâ€™s corporate communications head, said that IFB only began in earnest in Ethiopia â€“ a country where Muslims account for nearly 40 percent of the population â€“ last October.
â€œMany people in the country shy away from banking services due to the interest attached on money savings,â€ he said.
He noted that, currently, there were only about 20 million bank account holders in Ethiopia, where the total population is estimated at some 95 million.
â€œThis number can be substantially increased now that IFB has been introduced,â€ he said. â€œFigures registered since the introduction of IFB show a positive trend.â€
He went on to say that, from October of last year to June 2015, total investments under IFB had reached 100 million birr (roughly $4.8 million) with total deposits reaching 60 million birrÂ (roughly $2.9 million).
During the same period, he noted, the number of account holders using IFB, which is now being provided at commercial banks throughout the country, had reached more than 105,000.
â€œThese account holders have already deposited 1.5 billion Birr in only one year,â€ Ephrem noted.
Globally, Islamic â€“ i.e., non-interest-bearing â€“ bank accounts account for some $3 trillion, and the number is growing at between 15 and 25 percent annually.
More than 300 financial institutions in numerous countries â€“ including Malaysia, Saudi Arabia, Bahrain, the UAE, Kuwait, Qatar, Sudan, Iran, Pakistan, Bangladesh, Egypt, Indonesia and Brunei â€“ currently provide Islamic banking services.
According to a recent CBE publication, the industry is undergoing considerable growth, especially in India, the U.K., Germany, the U.S., Canada, Singapore, Thailand and Australia.
But in Ethiopia, Ephrem said, â€œwe must promote Islamic banking services in rural communities, which host most of the population.â€
The concept of Islamic banking as a modern financial service is still relatively new, having first debuted in the 1960s.