“We have not closed our books; subscriptions made through cheques and regional transfers are being certified but the figures at hand suggest that ZamZam will have 300 million birr capital subscribed by close to 6,000 people, ” said the senior organizing committee member on Friday.
Saturday’s shareholder meeting was expected to officially announce the birth of ZamZam bank by electing a board of directors that will direct the bank’s final touches. Executive hunts for the upcoming bank have been on progress in parallel with share sales to which investors reacted enthusiastically. The first 205 million birr worth shares were sold in the first eight weeks between December 10 and February 8.
“From now on it will be the board of the directors that will be in charge but so far various tasks have been completed including contacting executives to come on board with ZamZam,” a knowledgeable source told Capital.
The source said an Ethiopian born banking specialist who held a senior management position at a major international bank is the top executive to be approached: “the person that is expected to seal the deal to come on board has over 25 years experience in the banking industry, including in non-interest banking operation, in the renowned Citibank,” said the source that fell short of naming the individual before official announcements.
A number of experts have been pushing for the formation of non-interest banks in the country and ZamZam bank organizers rallied the effort.
Behind the under formation bank are several reputable business men and academic elites including the owners of the country’s first private college, HiLCoE School of Computer Science and Technology. ZamZam Bank organizers chairman Nassir Dino (Assistant Professor) has been the face of the venture so far.
“When we first came up with the idea in 2006, we had said we needed to find a group of appropriate professionals mainly with the real banking practices acquainted with interest free banking; we couldn’t find such a person. So we had to learn it ourselves.
I studied interest free banking in a post graduate program in the UK and in due time, we came across the rest of the group members who had similar initiatives. So we launched it officially in 2007, ready for the professional challenge,” Nassir said in a Capital Interview back in September.
Though the venture was launched in 2007 it was only after the 2008 Banking Business proclamation [amendment] that opened doors for non-interest banking operation, also known as Islamic banking, ZamZam could advance further.
The formation of Ethiopia’s first non-interest bank which, according to the National Bank’s directive, includes modes of advancing funds on a profit-and-loss sharing basis consistent with the Sharia’h law, was further hurdled as the central bank was awaited for to issue the subsequent directive.
Sharia’h – Islamic law – prohibits believers from taking or giving interest. To share profit from investments, equally accepting losses is permissible in Islam, while interest is not.
On December 5, 2010 a green light for ZamZam shareholders, who until then were asked to keep their money in their pocket, was finally given for the formation that saw the bank’s birth yesterday. The belated directive allows not only a formation of a fully-fledged interest-free bank like ZamZam but also a window for the service in the existing commercial banks.
In a four month sale of shares, the under formation ZamZam bank organizers completed, by Friday, 250 million birr worth of shares each valued at 1,000 birr. The final sales are close to 300 million birr, according to a senior organizing committee member that wishes to remain anonymous so as not to preempt official announcements.
Source: Capital
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