Malawians in the country have commended the FDH Bank Plc for unveiling the first ever banking services based on Islamic Laws also known as ” Shariah” in Arabic.
According to a snap survey that Malawi24 has conducted , Malawians say the services are expected to foster economic development by encouraging equal income distribution and which results in greater benefits for social justice and long-term economic growth.
” Islamic banking instruments contributes to economic growth by ensuring that many ordinary citizens are accessing loans at a zero interest, that’s fairness ,” establishes Malawi24’s snap survey.
FDH Bank Plc says it has unveiled FDH Salama Banking Solution yesterday as part of its strategy to offer easy access to financial solutions that help the community grow aimed at offering offering Shariah Compliant Banking services to customers.
When unveiling the solution, FDH Chairperson, Charity Mseka was flanked by the FDH’s Managing Director Noel Mkulichi and Deputy Managing Director George Chitera.
According to the bank, the launch was also graced by Reserve Bank of Malawi Executive Director for Regulation Peter Mhango, FDH Group Chief Executive Officer William Mpinganjira, Islamic Banking Lead Advisor Sheikh Ibrahim Lethome and Shariah Advisors Mufti Safwaan Ahmed Ibrahim and Dr. Salmin Omar, Muslim Association of Malawi led by Alhaj Twaibu Lawe and Qadria Association of Malawi led by Osman Karim among others.
According to the lnternational Monetary Fund (lMF), the Islamic finance refers to financial services that conform with Islamic jurisprudence, or Shariah, which bans interest, speculation, gambling and short-sales; requires fair treatment; and institutes sanctity of contracts.
” And these principles hold the promise of supporting financial stability, since a key tenet of Islamic finance is that lenders should share in both the risks and rewards of the projects and loans they finance ,” says IMF.
The international financial institution says Islamic finance has an important potential to act as an engine of stability and inclusion.
lMF says : ” Since investors are required to bear losses that may arise on loans. there is therefore less leverage, and greater incentive to exercise strong risk management. These risk-sharing features also serve to help ensure the soundness of individual financial institutions and help discourage the types of lending booms and real estate bubbles that were the precursors of the global financial crisis.”
