By Umaru Kashaka
THE titular head of Muslims in Buganda Prince Kassim Nakibinge has appealed to the Speaker of Parliament Rebecca Kadaga to find out why the Islamic Banking Bill 2014 up to now has not been passed.
Speaking as a guest of honour at the Iftar dinner for Muslim leaders to break their Ramadhan fast organized by Kadaga at Parliament on Thursday, Nakibinge said there are so many Bills to come but of interest to him was the Islamic Banking Bill.
“The Bill has been in corridors of Parliament and Cabinet for the last eight years or so. I don’t know why it has failed to be passed, but I ask Madam Speaker to look into this,” he implored.
Islamic banking also called participant banking is defined as banking activity that is consistent with the principles of the Islamic law (Sharia) and its practical application through the development of Islamic economics.
The basic principle of Islamic banking is based on risk-sharing which is a component of trade rather than risk-transfer which is seen in conventional banking. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for money loans.
However, the lack of trained and skilled professionals has been pointed out as a challenge that could impede the implementation of Islamic banking in Uganda.
Industry players have also expressed their caution in this regard due to the foothold of conventional banking as well as the lower economic power held by Ugandan Muslims.
Nonetheless, the prospects of Islamic Banking remain relatively promising with a 12% Muslim population or approximately three million people.
The government is working together with the Islamic Chamber of Commerce, Industry and Agriculture to introduce Islamic finance in the country.
Should the legislation allowing Islamic banking be passed, Uganda will join its African counterparts such as Nigeria and Kenya in offering Sharia compliant financial products on the continent.