Wednesday, July 24, 2024
BusinessZemZem raises 1.2 bln in subscribed capital

ZemZem raises 1.2 bln in subscribed capital

CBE’s interest free banking deposits reaches 25 bln birr

Months after it started selling its shares, ZemZem Bank – which is to be the first recognized full-fledged Islamic banking institution – has managed to raise more than 600 million birr in paid-up capital, and has registered a subscribed capital of 1.2 billion birr, The Reporter has learnt.

The bank received its licence from the central bank back in May, after Prime Minister Abiy’s public announcement, paving the way for the operation of a full-fledged Islamic banking operation in Ethiopia. Even though institutions in the Ethiopian banking sectors have been providing interest free banking services for their customers since 2011, no bank was allowed to establish a fully-fledged Islamic bank.

In related news, a number of private banks are expanding their interest free banking services. In this regard, the state-owned Commercial Bank of Ethiopia (CBE) alone has managed to increase its interest-free banking customer-base to 2.2 million people.

Moreover, the level of deposit collected by CBE from its interest-free banking customers is reported to have reached 25 billion birr in a short span of time. Just a few years ago, CBE’s deposit was equivalent to the total deposit of seven banks that have an interest free banking window. And two years ago, seven banks have managed to mobilize a total of 20 billion birr from interest free banking.

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CBE, in addition to giving the service in its conventional branches, the bank has opened a separate window, dedicated to interest free banking. The Bank also plans to increase its branches to 54.

Currently, CBE has 1,443 windows dedicated to interest free banking.

Ethiopia currently has 16 private and two public banks. As of 2017/18 government’s report, the total capital of these banks has increased by 10 percent, reaching 85.8 billion birr. At the same time, these banks have managed to mobilize 298.2 billion birr in the form of deposit, borrowing and loans.  

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