Members of Parliament have today formed a network to promote Islamic Banking in the country.

Among those who attended were the Governor, Bank of Uganda, Tumusiime Mutebile and the state minister for finance David Bahati.

The network  Codenamed “Uganda Parliamentary Forum on Islamic Banking and Finance”, will see Islamic Banking promoted in the country.

The legislators elected Nakaseke North MP Syda Bumba to be its leader.

The forum held a sensitization workshop for MPs at parliament about Islamic Banking.

Hon. Syda Bumba, a former minister for finance, said Islamic Banking will provide affordable loans which are lacking in Uganda’s financial sector.

She also added that Islamic Financing will be one of the avenues for government to secure financing for critical projects.

In his presentation, Bank of Uganda Governor Emmanuel Tumusiime Mutebile said that the central bank will begin licensing Islamic Banking financial institutions before the end of 2017.

On 6 January the Ugandan Parliament passed The Financial Institutions (Amendment) Bill, 2015, which sought to amend the country’s Financial Institutions Act 2004, to provide for Islamic banking.

The Islamic Banking & seminar held today at parliament aims to retool MPs on the same.

Sulaiman Lujja, a member on the Islamic Banking Committee in Tropical Bank told legislators that it’s possible to transform Uganda into a regional Islamic banking financial hub.

Lujja says that this is possible because despite the fact that Uganda was the last country to adopt the practice in Africa, it is the only country which has embedded the practice into its legal framework.

The other African countries that have adopted Islamic Banking but are non-Islamic states are South Africa, Senegal, Botswana, Zambia, Eritrea, Mozambique, Kenya, Tanzania and Rwanda.

President Museveni has been advocating for Islamic banking model, also known as Halal banking—where instead of a bank imposing interest, it shares the profit it accrues with the clients.

The highlight of Islamic banking contained in the new government amendments to Financial Institutions (Amendments) Bill, 2015 is its stand on interest charged on borrowed money and other islamic banking products such as agency banking, bancassurance – (insurance provided by banks), mobile banking and money transfer, deposit protection fund and free access to credit reference bureau services.