NEWS– President Yoweri Kaguta Museveni has inaugurated Uganda’s first Islamic Bank, Salaam Bank Limited, amidst applause from thousands of Muslims, at the ceremony took place today March 27th at Kololo Independence Ceremonial Grounds in Kampala.
President Museveni welcomed the Islamic Bank to Uganda saying that country with a population of approximately 48 million has the economic potential to absorb the banking services and predicted that in the next 26 years the population will hit 106 million.
President Museveni thanked the Islamic bank for its arrival and anticipated the immediate start of Shariah-based loans for the Muslim community.
Salaam Bank Limited, previously known as Top Finance Bank Limited, is the pioneer in offering Islamic financing in Uganda and this marks the beginning of a new financial era grounded in ethical principles, according to the bank’s management.
The Bank was granted an Islamic commercial banking license on September 8th 2023, which was personally delivered by the acting Governor of the Bank of Uganda, Dr Michael Ating-Ego.
Salaam Bank Limited is a Ugandan subsidiary of Salaam African Bank of Djibouti and is led by CEO Michael Mande and the bank’s establishment in Uganda follows its expansion in Asia, specifically Malaysia, as well as Ethiopia and Kenya.
The license issuance was made possible by the signing of the Financial Institutions (Amendment) Act 2023 by President Museveni in January 2024, enabling the introduction of Islamic Banking in Uganda.
Islamic Banking, as explained by the bank’s management, adheres to Islamic principles that prohibit charging interest on loans where the lender invests in the beneficiary project and shares in its profits or losses and this approach not only reduces the risk of non-repayment but also allows the lender to contribute expertise to ensure the project’s success.
During the license handover, Dr Atingi-Ego expressed the Central Bank’s commitment to overseeing and supporting Salaam Bank in its new venture as he acknowledged the potential of Islamic banking to significantly contribute to Uganda’s financial sector development.
With the licenses in place, Salaam Bank can now offer Ugandan nationals access to 100% Islamic financial products, introducing high-quality products and services to Ugandan banking.
The enactment of the Income Tax Amendment Bill No.2 of 2023 last year removed all legal obstacles to the launch of Islamic banking products in Uganda.
