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Interest-free Islamic Bank sells 1.2 billion birr worth of shares

Zemzem Bank is the first Islamic Bank in the history of Ethiopia. Amounts of shares sold is also said to be record high.

Islamic Bank _ Ethiopia
Image source : Zemzem Bank Facebook page

October 20, 2019

Ethiopia’s first interest-free bank, Zamzam, reportedly sold record-high shares in the history of the financial sector in Ethiopia.

A report by Capital, local business news source, this week said October 11 was the last date for selling shares for the new bank in Ethiopia, and the bank has sold 1.2 billion birr worth of shares. Over 600 million birr is paid for, according to the source. 

Shares were on sale for three months now. Capital cited Nassir Dino, one of the founders of the Bank, still under formation, as saying “the time frame that they achieved regarding the share sales might be historical like the record collection of the subscription or paid-up capital.”

The maximum number of purchases by an individual will not surpass 5 percent of the total capital as per the National Bank of Ethiopia regulation, as cited by the source. The minimum purchase is 20 shares with a total value of 1000 Ethiopian birr. 

Initially, there was an effort to establish an Islamic Bank in 2011 but the Ethiopian government under prime minister the late Prime Minister Meles Zenawi. 

It was after Abiy Ahmed’s government permitted the establishment of the bank during a ceremony at the Millennium Hall during the Holy Month of Ramadan in April of 2019 that the formation of the bank announced in May 2019. 

Ethiopia’s state bank, Commercial Bank of Ethiopia- the largest in the country, has entered the interest-free banking business following the announcement of Zemzem Bank. 

It introduced its first fully interest-free banking branch which it named as Bilal, named after a person believed to be of Ethiopian origin and the first muezzin in Islamic religious tradition, in September of this year. 

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