Malaysians explore Islamic Banking in Rwanda
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A delegation from Malaysia has concluded a two-day visit of the country, to explore opportunities for Islamic Banking and financial system.
Saifuddin Khalid, the Malaysian trade commissioner who headed the delegation said they wanted to introduce Islamic Banking in Rwanda as the country is registering fast economic growth that increases the need for more and effective banking services.
He said, “Rwanda is a fast emerging economy that is registering fast growth especially in business. We have brought with us the basic proposal for the Islamic banking and financial system because the fast growing business in this country is a good opportunity to invest in the banking sector.”
“The idea is to make Rwanda; especially Kigali the pilot ground to start Islamic banking and financial system activities in the region,” Khalid said.
The four-member delegation left yesterday after holding discussions with bankers, insurers and government institutions.
Details of the talks were not available by press time.
But speaking in Nyanza District recently, the Mufti of Rwanda, Sheikh Ibrahim Kayitare said the Muslim community in the country is set to benefit from Islamic Banking.
Sheikh Kayitare said Islamic sharia, prohibits a Muslim from taking loans or borrowing money with [high] interest rate.
He said it is difficult for Muslims to utilise existing credit facilities in banks because they are incompatible with their belief.
“Islam wants people to develop but not to rely on loans. A person might get a loan and face problems. When they face problems, the loan and the interest accumulate over time and as a result, their property gets auctioned,” he said.
The Mufti was in Nyanza for the inauguration of Islamic funded development and welfare projects.
He said the new arrangement will facilitate Muslims to do businesses for self and national development.
He said Muslims are in talks with the Kenya Commercial Bank (KCB) on possibility of starting Islamic Banking unit.
A similar arrangement has been sought at Altantis Microfinance, a Kenyan based microfinance institution in this regard, he said.
He urged the Muslim community to think big to come up with profitable and viable projects for development.
Mufti Kayitare said they are also holding talks with the Business Development Fund (BDF), on a similar arrangement for girls and women doing business.
Sheikh Kayitare said they are working with KCB to train Sheikhs in terms of Islamic Banking.
He said the project was agreed upon three years ago, but it delayed to take off due to lack of experts in the Islamic Banking.
He noted that the Muslim community will be depositing cash in the financial institutions with Islamic Banking facility.
He, however, cautioned Muslims against misuse of development loans, saying one who will misuse the loan, will have no other option, except paying the whole loan with interest.
Aisha Bonaventure Rutayisire said most of the female Muslims run various businesses and the new banking system will help them develop as it sets conducive loan payment modalities.
About Islamic banking
Islamic banking refers to a system of banking or banking activity that is consistent with the principles of the Shariah (Islamic laws) and its practical application through the development of Islamic economics.
Shariah prohibits the payment or acceptance of interest charges (riba) for the lending and accepting of money.
Though, Islamic banking is not restricted to Muslims.
Additional reporting by Emmanuel Ntirenganya