An Islamic bank is set to take-off in Ghana by the end of the year.
The bank, which is to provide universal banking services to both Muslims and non-Muslims in the country, would offer an opportunity for its customers to access funding without having to provide landed property as collateral, and also without paying fixed interest on credits, but rather share profits on pre-arranged terms.
“The bank would be offering corporate banking, housing finance, car finance, retail banking products as well as other services that conform with the tenets of Islam, which are available to any individual or outfit seeking an alternative banking solution,” Professor Thomas Kubi, a promoter of the bank told CITY&BUSINESS GUIDE in an interview in Accra.
He said the Ministry of Finance and the Bank of Ghana, which is the regulator of the country’s banking industry, had agreed in principle for the setting up of the bank in the country.
He further disclosed that an international Shariah advisory firm, Dar Al Istithmar, in collaboration with his outfit, MCA International Consult, had already prepared a proposal outlining the strategy to introduce Islamic banking to the country.
“There is a huge market niche in Islamic banking that needs to be filled and we are looking forward to meeting this market’s needs,” Prof Kubi noted.
He said anyone who would open an account with the bank would automatically become a shareholder and be covered by insurance.
Islamic banking, practiced in a growing number of countries including Turkey, United Kingdom (UK), Qatar and Iran, is founded on the Shariah principles including the fundamental principle that the receipt of interest is prohibited.
UK Chancellor, Gordon Brown, had said his intention was to make London the gateway to Islamic finance and trade.
The rise of Islamic banking is the most striking feature of the new wave of development in the Arab and developing world.
According to statistics, the global value of the Islamic financial industry presently stands approximately at $850 billion.
From a humble beginning in the 1970s, the Islamic financial services industry has grown in size in 75 countries and spread across four regions namely North America, Europe, Middle-East, Africa and South-East Asia.
Analysts say the multi-dollar sector is poised to register unprecedented growth, averaging 15 percent annually over the next decades.
This, according to them, represents attractive opportunities for regional and international bankers to tap rich deposits and structured project finance businesses in the Islamic world.
Prof. Kubi said the setting up of an Islamic Bank in Ghana would give the country a head-start over other potential competitors such as South Africa.
In Africa, Islamic banks are established in the Gambia, Morocco, Tunisia and Sudan.