Islamic banking leaders and dignitaries from across Africa and the Middle East gathered in Khartoum, Sudan yesterday for the 2nd annual International Forum on Islamic Finance (IFIF 2016).
The meeting is being attended by 200 delegates hosted by the Government of Sudan, the Central Bank of Sudan and the Bank of Khartoum.
In Tanzania, several banks have adopted Islamic banking product including the National Bank of Commerce, Amana Bank, Kenya Commercial Bank, International Commercial Bank and People's Bank of Zanzibar.
Islamic Banking is banking without interest, but trading with profit. Interest is not paid nor received as stipulated in Shariah (Islamic sacred law).
In spite many misconceptions that it's for Muslims, all those who abhor interest in the conduct of business are the target market for these products which has been structured under Islamic contracts.
Islamic banking is bound by principles outsourced from Islamic commercial jurisprudence- fiqh Muamalat.
The principles include absence of interest, usury or riba in letter and spirit under the adage "no pain no gain". The government is also preparing regulations on Islamic banking and insurance, known as takaful.
Takaful is a co-operative system of reimbursement or repayment in case of loss, paid to people and companies concerned about hazards, compensated out of a fund to which they agree to donate small regular contributions managed on behalf by a takaful operator.
It is defined as an Islamic insurance concept which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law. This concept has been practised in various forms since 622 AD.
Muslim jurists acknowledge that the basis of shared responsibility (in the system of aquila as practised between Muslims of Mecca and Medina) laid the foundation of mutual insurance.