The Ethiopian Interest Free Finance and Economy Summit undertaken

Halal promotion in collaboration with EIFFPA (Ethiopian Interest Free Finance Professionals Association) has successfully undertaken the first Ethiopian Interest Free Finance and economy summit on the 11th of August 2022. The summit is one of the programs incorporated in the eid-to-eid initiative of H. E. prime minster Dr Abiy Ahmed. Hence, it has been facilitated by the eid-to-eid program management office led by Ustaz Abubeker Ahmed and H.E. Wro Birtukan Ayano (state minster of the ministry of foreign affairs).

The session has been held in Sharaton Addis hotel in the presence of respected public figures including Sheh Haji Ibrahim Tuffa President of the Ethiopian Islamic Affairs Counsel, Sheh Abdulkerim Sheh Bedredin, Vice President of the Ethiopian Islamic Aiffairs councel, H.E Mr Ahmed Shide the minster of Ethiopian ministry of finance, and H.E. Dr Yinager Dessie governor of the National Bank of Ethiopia represented by H.E. Solomon Desta V/Governor of the National Bank of Ethiopia as well as Mr Ibrahim Dawd President of the Ethiopian Interest Free Finance Professionals Association.  

The session has been held with the theme of ‘shaping the future of financial inclusion in Ethiopia’. In his keynote speech H.E. Ahmed Shidie emphasized on the governments keen interest for the development of interest free finance believing its key role towards financial inclusion. He has stressed the three major regulatory frameworks introduced by the existing government; namely the revision of banking proclamation allowing full-fledged interest free banking services, the revision of insurance proclamation allowing Takaful operation, and the revision of MFI proclamation opening the door for interest free operation in both window as well as full-fledged basis.

H.E Mr Solomon Desta on his part has indicated the encouraging developments being observed in the industry indicating that the number of interest free accounts opened so far reached close to 12 million and the value of deposit being about to Br. 117.2 billion. He has, however, stressed for banks to equally work hard in terms of expanding their performance in financing activities as well, pinpointing that the value of financing at the end of June 2022 is only about Br. 35 billion.

In his opening speech of the discussions of the day, President of EIFFPA (Ethiopian Interest Free Finance Professionals Association) has also stressed the value of interest free finance as a financial inclusion tool. He has indicated that while thinking of financial inclusion what is coming in the minds of most of us is the contribution of digital finance or fintech. From the point of view of expanding financial services to those parts of the community who have been far from it due to their religious values, sufficient attention shall be given to Interest free finance as these people cannot use either the mainstream banking or digital banking unless the Sharia values are considered. He elaborated the purpose of the association as promoting interest free financial services in Ethiopia working closely with all stakeholders in the field and briefly explain EIFFPA’s profile to the summit. While concluding his speech Mr Ibrahim as emphasized the importance of collaboration among stakeholders to enhance the pace of growth and development of the interest free finance industry and call upon close support of stakeholders towards the efforts of EIFFPA.        

Various papers have been presented on the occasion by well-known practitioners in interest free banking, insurance and fintech sectors. Besides, an important panel discussion has also been held incorporating representatives of leaders of the interest free banks (both window and full-fledged) and Sharia advisors. Besides, the regulatory body has also been represented on the panel discussion by Mr Frezer Ayalew, director of banking supervision in the National Bank of Ethiopia.

Highly valuable points, that can help in uplifting the interest free finance industry in the country, have been deliberated on the presentations and the panel discussion. Both the morning and afternoon sessions have been moderated very well by Mr Mesfin Bezu as the secretary of Ethiopian Interest Free Finance Professionals Association. He has indicated the importance of promoting most of the suggested valuable ideas through the association as a central organ which can help to synergize private efforts. For instance, he has indicated the need to organize a central Sharia advisory platform within the association, for which Mr Nuri Hussien, Chief of Interest Free Banking in CBE, has promised to extend hands by sponsoring this collaboration forum of Sharia advisors suggested by EIFFPA.   

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