Malawi’s trend-setting fast-growing home-grown financial institution, Malawi Stock Exchange (MSE) listed FDH Bank plc says its flagship Islamic banking, which is also known as Salama banking is going in the right direction, a year on after presenting it on the public bazaar for those who prefer Shariah-compliance banking solutions.
FDH Bank head of corporate banking, Kawawa Msapato says the Malawi Stock Exchange-listed bank convened to interact with Salama banking customers and appreciate their feedback.
Msapato, who made the remarks at a business breakfast in Malawi’s capital, Lilongwe said: “We have just clocked a year and we thought of engaging with our clients in Lilongwe so that we can get more feedback in terms of our offerings, what has been the experience, what more can we bring on the table and how can we diversify the product offering, among others.”
He said the Islamic window has registered thousands of customers and the transactions are in billions of kwachas, such that this month, it is being extended from three branches of Limbe, Mangochi and Lilongwe to all the branches nationwide.
“Being something that is new on the market, obviously we had done our research and seen that there was a need to bridge the gap. But still, when you launch, you are not sure what will be the reaction of your customers,” said Msapato.
Muslim Association of Malawi general secretary Sheikh Alhaj Twaibu Lawe thanked FDH Bank plc for their partnership to introduce Islamic banking, saying it will help them access bank services in an Islamic way.
Islamic banking, also referred to as Islamic finance, is premised on two fundamental principles of Islamic banking, which entails sharing of profit and loss and the prohibition of the collection and payment of interest by lenders and investors.
Elsewhere in Africa, South Africa, Nigeria, Kenya, Senegal, Djibouti, Uganda and Morocco have legal and regulatory frameworks and run Islamic finance products
In his remarks Chavah Advisory Committee for FDH Salama chairperson Sheikh Ibrahim Lethome described the experience is exciting, however, he highlighted on the need for training of human resource to ensure that bank staff have relevant knowledge on Islamic banking.
“We need more legal reforms to support the sector because remember we need to have laws that when there is a dispute within Islamic banking transactions, we should be able to resolve them.
“There is a need for training and also the need for people who have been trained in Islamic banking to support it,” he said.
Lethome, a Kenyan national, said if local banks can utilise such Islamic banking window, a full-fledged Islamic bank could be introduced in the country.
He said Kenya has three Islamic banks that are thriving.
Chamber for Small and Medium Businesses Association executive secretary James Chiutsi said in an interview that the Islamic banking window could not have come at a better time than now when the cost of capital is high.
“For years, we have decried high interest rates which have made borrowing from financial institutions very hard,” he said.
Reserve Bank of Malawi executive director for regulation Patrick Mhango said it is the government’s policy position to create a conducive business environment for the private sector to expand the scope of the country’s Islamic finance.
“As part of our legislative readiness, we will ensure that Islamic banking products are offered in a safe and sound manner,” he said.
FDH Bank, a subsidiary of FDH Financial Holdings Limited, a financial institution, who are a diversified investments and financial solutions centre with interests in Banking, Discount House Operations, Investment Management and Advisory Services as well as Forex Bureau operations.
FDH Group prides itself in the quality of our services, which have created a formidable reputation in all our business arms.
FDH Bank is the only banking institution in the country that offers Salama Banking Solution (Shariah Compliant Banking Services and Products) to cater for peoples’ needs while respecting the special requirements of Islamic Banking and they offer the service to Corporations, Small and Medium Enterprises, Religious Bodies, Schools and Individuals.
FDH Group is headed by William Mpinganjira, a UK trained Chartered Banker and a Fellow of the Association of Chartered Certified Accountants (FCCA), a seasoned banker with vast experience of the banking and finance industry.
“There is a need for training and also the need for people who have been trained in Islamic banking.”
Sheikh Ibrahim Lethome
Chavah Advisory Committee for FDH Salama chairperson
