Zim to introduce Islamic banking

HARARE - Islamic group Orischart says it is in negotiations with monetary authorities in Zimbabwe to introduce Islamic banking in the country.

Ashirai Mawere, an Orischart official, told businessdaily that they had engaged the central bank and Finance ministry.

“We so much want to boost this nation’s economy through Islamic funds.

“The issue to do with liquidity is affecting this economy too much.

Government expenditure is taking 70 percent of Treasury’s budget,” he said.

Mawere said Islamic banking will among other things help ease liquidity challenges in the country and boost Zimbabwe’s status in the world of financial services.

Islamic banking is based on the principles of Islamic law (shariah) and guided by Islamic economies.

Two basic principles behind such a banking system are the sharing of profit and loss and significantly; it prohibits the collection of interest, which is not permitted under Islamic law.

Mawere — who is part of the group that is organising Zimbabwe’s first ever Islamic Expo to be held from November 6th to 10th, 2013 — said the country needs practical solutions to carry it forward.

“As part of this Expo we are confident of our ability to assist distressed business, government and entrepreneurs through our Shariah Advisory Board,” he said.

This comes as international Islamic finance sector is expected to be worth $2,6 trillion by 2017.

Mawere noted that the Islamic banking system does not have any religious connotation and will be open to all irrespective of religion and caste.

“Muslims have a traceable record in the development of health and general science, education, sports, literature and economics and we need to participate in all this success,” he said.

Market experts believe that in order to tap the immense investment potential of the oil-rich Middle East, it was in Zimbabwe’s interest to introduce Islamic banking.

“It will provide the opportunity to bring a large section of the Muslim population into the mainstream. It is a sophisticated banking and finance structure based on moral and social values and is compatible with modern-day financing needs,” said an equities market analyst with a local bank.

More than 50 countries, including the United State of America, the United Kingdom, France, Japan, Singapore, Saudi Arabia, Germany, China and Malaysia have recognised Islamic banking and finance. And major international corporate banks such as Citigroup, HSBC, Deutsche Bank and Standard Chartered have Islamic banking windows.

Incidentally, in many countries, 30 to 40 percent of investors in this banking system are non-Muslim.

Research has shown that while the world faced a severe economic crisis in the past few months, Islamic banks continued to grow unabated.

And this industry is growing at about 20 percent to 30 percent annually.

“Since the core principle of the system is sharing in both profit and loss, it would reduce the impact of the financial slowdown in Western countries.

“And if Zimbabwe were to introduce the system, the concept was likely to boost the economy of the country as well as the entire southern African region,” said Innocent Mugore an independent economist.

Comment could not be obtained from the Reserve Bank of Zimbabwe nor Finance minister Patrick Chinamasa.

Comments (11)

What controls are in place to avoid some kind of double dipping?

chipo - 5 November 2013

Well a great noble idea of tapping unused billions of dollars in the middle east and east Asia as well as oil rich Africa Arab countries

eho - 5 November 2013

There is no difference between Islamic banking and any other banking system. Asi makanganwa kuti maArab ndiyo vaiva mamerchants eSlave Trade, hapana zviripo makumbo enyoka.

Guest - 6 November 2013

ha ha ha economics dzinogozha vakomana...3 comments chete..asi dai wati nyaya dzana Bev na Khama.....waiona 45 comments!!!! Ki ki kikiki

Mukomana Mukuru - 6 November 2013

GUEST YOUR COMMENT ABOUT ARABS BEING FORMER SLAVE TRADERS IN THE PAST IS DEFINITELY IRRELEVANT, EVERY TRIBE , RACE AND PEOPLE HAS AN UNGLORIOUS AND SHAMEFUL PAST, JUST LIKE HOW WE AFRICANS USED TO BUTCHER TWINS AND ALBINOS

BANANA REPUBLIC - 6 November 2013

MUKOMANA MUKURU....NDIWE UNEYESE....ZIMBOS ARE THE STUPIDEST OF ALL BANANA REPUBLIC CITIZENS OUT THERE, ALWAYS BOGGLIND DOWN IN IRRELEVANCE, WHEN YOU HAVE A NATION WITH 90% OF NEWSPAPERS AND NEWS SITES RUN THE USUAL ''MAN FOUND BEEDING NEIGHBOUR'" TYPES OF STORIES....THATS HOW I KNOW THAT ZIMBABWE IS INDEED A BANANA REPUBLIC

BANANA REPUBLIC - 6 November 2013

Well just look who they voted in as their president. How stupid was that?

Peter Macklyn - 6 November 2013

BOREHOLES and IRRIGATION engineers zim.engineers@gmail.com

xcvbnm,hgft - 7 November 2013

''Research has shown that while the world faced a severe economic crisis in the past few months, Islamic banks continued to grow unabated.'' this statement is subject to debate, there might be risks of being used in money laundering.i dont hold any bone against islam but anything and anyone can be a risk.

Collins Chikomba - 7 November 2013

What benefit.they started with slave trade in africa. Look @ what is happening to mali,syria,somalia,c.a.r,kenya,nigeria all arab countries in africa and middle east.these oil reach arab countries are funding those conflicts openly and without shame. Thats what islamic banking money does. Africa time to rise up,Africa for Africans.

Mutapa - 7 November 2013

Iwewe wemu godhi nekudiridza, uchandibhowa manje. Washaya kwekutengesera twunhu twako here? How can you pinda mu church nema freezits and maputi ako kutengesa? Nxa mhani...

Mudhara Bim - 8 November 2013

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