A two-day international forum in Addis Abeba brought together experts from around the world to discuss the prospects and perils facing the growing interest-free banking industry in Africa.
Discussions focused on the regulatory landscape of Islamic finance in Africa, investment opportunities in interest-free banking, the role of Takaful (Islamic insurance) in financial inclusion, and the impact of Islamic fintech innovations on the African market.
Hassan Mohammed, state minister of Industry, highlighted the risk-sharing nature of interest-free financial instruments, which can help mitigate systemic risks and reduce the likelihood of financial crises.
Organised by the AlHuda Centre of Islamic Banking & Economics, the 5th International Interest-Free Banking & Takaful Forum aimed to stimulate dialogue and promote the development of interest-free finance on the continent.
Muhammad Zubair, CEO of AlHuda, expressed optimism about Africa’s potential to become a major hub for interest-free finance, and Ethiopia’s prospect for leading the transformation.
Ethiopia’s Takaful insurance market had a share of 127 million Br (nearly 4.5 million dollars) two years ago, representing less than one percent of the total gross written premiums of the industry. While a few Ethiopian insurance companies offer Takaful services, the market is still relatively underdeveloped, with a focus on Wakalah-based products and limited offerings for family Takaful.
