ACCI

Afghan Economic Growth through Islamic Banking

Today September 19, EmendGroup with co-support from Afghanistan Chamber of Commerce and Industries (ACCI) organized a conference on “Afghan Economic Growth through Islamic Banking” at Kabul Serena. The objectives of the Conference are to promote awareness, reduce understanding gap about Islamic banking and to provide a platform to the members of business community to present their questions about Islamic banking and remove any possible misconceptions thereto.

Bakhtar Bank and Etisalat Afghanistan participated as Lead and Platinum sponsors respectively, Ariana News assisted as Media sponsor and Afghanistan Banks Association (ABA) & Afghanistan Microfinance Association (AMA) assisted as Event Partners. Officials from Da Afghanistan Bank, relevant Ministries, Members of Parliament, Members of the Senate, Board of Directors (BoD) and business community members of ACCI, CEOs of Leading Banks and Microfinance Institutions, Chief of Islamic Banking and Leading Shariah scholars of Afghanistan among the major participants.

Although Islamic banking is in its initial phases in Afghanistan, over 99% Muslim population of the country, strict prohibition of Riba, Gharar & Qimar and the importance of Islamic guidelines among majority of Afghan nationals pose huge demand for Islamic banking and finance.

“Awareness, bridging understanding gap & capacity building are the most demanded areas for promoting and strengthening Islamic banking and finance in those countries where the subject is in its introductory phases; Afghanistan being no exception. EmendGroup has focused on the same areas and aims to establish the first specialized institute for capacity building of Islamic banking and finance. Additionally, EmendGroup organizes Conferences, Awareness Campaigns and Exhibitions. EmendGroup brings international experience & networks for specialized advisory and consultancy pertaining to Islamic banking and finance.” Said Mr. Fareedun Rostai (ACCA) – Director EmendGroup, while explaining the domain areas of EmendGroup.

The First Vice Chairman of ACCI, Mr. Khanjan Alkozai, started his speech with highlighting the importance of Islamic banking for the promotion and growth of Commerce & Industries in Afghanistan. Emphasize shall be put in place by the Central Bank, the Law Makers and the Commercial bankers to ensure that proper policies & systems are there to restrict the potential infringement of trust of different stakeholders, Mr. Alkozai suggested.

“Limited access to Islamic modes of finance is one of the various problems faced by the Industrialists in Afghanistan. Islamic banking has started off with a good start, but it is vital that Islamic banks expand its product base, financing capabilities and ensure that the trust of the depositors and customers is strengthened for further growth of the banking as well as the Industrial sector of the Country.” Said Mr. Abdul Jabbar Safi, Chairman Afghanistan Industrial Association (AIA).

Mr. Alkozai also pointed to the progresses made in banking sector and expressed his pleasure from the progress in sending and transfer of money and not having the names of Afghan banks on international black list anymore. He also mentioned some obstacles such as problems of bankers in provinces, increase on tariffs and taxes by government, reduction in the investment and trade in the country and problems in having access to business license on time. He called on the relevant organizations for the solution. Mr. Alkozai urged to support national products and called on government for lower tariffs on the import of those commodities currently we do not have the capacity to produce them inside the country. He specially complained from higher taxes on solar energy producing equipment which has good results in the sector of agriculture and irrigation.

Mr. Alkozai expressed his hope for reducing the distance between banks and investors through such conferences and said through easier access to loans and smart banking we will be able to have another circle of the business cycle for making our businesses more successful.

During his session on Introducing Islamic banking, Dr. Ayaz Niazi, Head of Shariah Department – Kabul University said that Islam has stated and concrete guidelines in every field of life and Islamic economic system and finance is no exception. Islamic banking system has the full potential to become a viable alternative to its conventional counterpart, with added benefits of sustainability, economic growth and prosperity, he further added.

“Majority of industrialists and businessperson of Afghanistan restrain from engaging with banks for their financial needs, largely due to the Prohibition of Riba. A workable model of Islamic banking has the potential to bring the businessperson to banking channels thus strengthening the overall economy.” Said Mrs Kamila Siddiqi, Deputy Minister of Commerce & Industries.

The Conference winded up with a Questions and Answers session whereby the participants keenly participated to remove their confusions about various aspects of Islamic banking. The panel for answering the questions consisted of members from Da Afghanistan Bank, Commercial bankers & Shariah scholars.