FLASHBACK: President Yoweri Museveni meeting Muslim of the Kibuli faction

Two Muslim-turned-Christian ‘Pastors’ in Kampala have vowed to storm Parliament to protest against the imminent passing of the Islamic Banking Bill that seeks to operationalize Islamic banking services in Uganda.

The group led by ‘Pastor’ Stephen Waiswa of the Bible Evangelism Ministries allege that Islamic Banking is based on the Islamic Sharia’h Law, yet Uganda is not an Islamic country.

“We will go to Parliament and tell the MPs about the dangers of Islamic Banking,” said Pastor Waiswa, a former Muslim who studied in Iran, one of the staunch Islamic countries.

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“Islamic Banking is based on Islamic principles which are anti-Christianity,” says Abdul Karim Waligo, another pastor from the same church located near Clock Tower, along Entebbe Road.

According to Pastor Waligo, Islamic banking is a brainchild of Muslim fundamentalists in the Middle East and a subtle way of spreading Islam as a religion to the rest of the world.

“Our Motto says, ‘For God and my country’. I am surprised that government wants to bring Islamic banking to our country,” he adds.

The two pastors made the pronouncement as they addressed gatherers who were attending a public debate between pastors and sheikhs.

Con­trary to the pastors’ concerns, proponents of Is­lamic banking say it paves way for the shar­ing of net profit/​loss and the risk in­volved in a pro­por­tional man­ner be­tween the lender and the ben­e­fi­ciary.

“If a fi­nancier is ex­pect­ing a claim on prof­its of a pro­ject, it is nec­es­sary that he/​she should also carry a pro­por­tional share of the loss of that pro­ject,” an official from Tropical bank says. Tropical Bank is one those local commercial banks that are slated to begin Islamic banking as soon as Parliament clears the related bill.

According to the Bill, willing commercial banks and other financial institutions recognized by the Bank of Uganda will be free to offer the Islamic banking services and products under the system that is already running in Kenya and Tanzania, Uganda’s EAC partners.

Unlike conventional commercial banking, Islamic banking, experts say, does not base loan acquisition on the collateral, the reason why government is interested in having this type of banking, especially at the time when interest rates in the country can only be managed by a few individuals and businesses.

At the presentation of the 2017/18 national budget last month, President Yoweri Museveni said his government would operationalize Islamic banking soon to serve property-less borrowers, stressing that commercial banks had resisted lowering their lending rates.

‘West­ern’ or con­ven­tional fi­nanc­ing looks

NOT AVAILABLE FOR COMMENT: One of the most prominent Muslim Parliamentarians Kawempe North MP Latif Ssebaggala

to profit through in­ter­est pay­ments and makes the ben­e­fi­ciary com­pletely li­able for any risk.

Efforts to contact Kawempe North MP Latif Ssebaggala to give a comment were futile as his known phone contacts were off. A Muslim, Ssebaggala is one of the MPs that vehemently support the bill.

Meanwhile, groups of Muslim and non-Muslim businessmen this reporter talked to are in favour of Islamic banking and are hopeful that it will help them access funding to expand their businesses.

“I have a welding business in Kisenyi which needs funding but our banks have lending conditions that I can’t fulfill. I hope Islamic banking will help me grow my business,” says one Yunus Kitata.

According to Prof. Raj Bhala of the University of Kansas Law School, Islamic finance is a roughly US $3 trillion industry and Islamic financial products are offered in Islamic and non-Islamic countries to Muslim and non-Muslims alike.

But Prof. Bhala says that with so much attention since 9-11, Middle East conflicts, and world-wide terrorism, ‘the nature of Islamic finance is not widely understood despite being successful, and founded on an ethically well-based system’.