Islam is the world’s second largest religion with more than 1.5 billion followers, making up more than 23% of the world’s population. Of these, 650 million Muslims hover at or below the poverty line. But although Islamic-compliant finance is a huge industry globally, when the international community talks about improving access to financial services in developing countries, making services Islamic-compliant is rarely top of the agenda.

Islamic-compliant financial products can take several forms and business models. However, the principles of Islamic finance are universal: you cannot make money off money. No one can charge or pay interest, or invest in items that Islam forbids such as alcohol and gambling.

Although a growing industry globally, within Ethiopia Islamic banking, which is also referred to as interest-free banking, is in its infancy. Around a third of Ethiopians identify as Muslim, making the country’s Muslim population larger than that in Saudi Arabia, Syria or Yemen. Access to finance in Ethiopia is generally very low. Nationally, only 14 % of the adult population has access to formal credit and savings products but this rate drops to 1% in rural areas. And, until recently, there were no financial institutions catering to the large population requiring Islamic-compliant products.
   »»» The Guardian (U.K.)

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