LIRA CITY, 20, 2025 — The Microfinance Support Centre [MSC] has urged Savings and Credit Cooperative Organisations [ SACCOs ] in the Lango and Acholi sub-regions to lend only to individual members with the proven capacity to repay.
During a sensitisation training session on Islamic financing held last Tuesday at Hotel Good News in Lira City, MSC Regional Manager, Williams Okweda, advised SACCOs to avoid funding activities such as alcohol consumption and gambling.
The training, according to Okweda, is part of efforts to promote financial inclusion as a catalyst for socio-economic transformation.
“We believe that Islamic financing can bring everyone on board. It is a participatory approach that targets poverty eradication, even for those currently excluded from formal financial services,” he said.
He noted that the Islamic financing model is inclusive, allowing grassroots communities without collateral to access capital and financial knowledge. This empowers them to participate in economic activities through interest-free loans.
Okweda explained that Islamic financing is asset-based, focusing on the funding of productive assets that generate income and improve household livelihoods. Unlike conventional lending systems, this model is guided by Sharia law, which strictly prohibits investment in activities deemed harmful or immoral.
“These include alcohol production and consumption, gambling, piggery and pork production, prostitution, and similar practices,” he said, adding that the principles of Islamic financing must be implemented with strict adherence.
The initiative forms part of MSC’s broader strategy to promote ethical lending and expand financial inclusion through Sharia-compliant mechanisms.
Okweda also cautioned SACCOs against lending money to non-members, warning that doing so puts their funds at risk.
“Follow your constitution to the letter. Do not lend outside the group, as that would be against the law,” he advised.
Sheikh Badi A. Faraj, Deputy Khadi of Gulu Muslim District, reaffirmed that Islam prohibits interest-based loans. He commended MSC and the government for introducing interest-free loans tailored to the Muslim community.
He noted that the initiative benefits not only Muslims but anyone seeking interest-free financing, calling it an inclusive and widely welcomed approach.
https://thecooperator.news/msc-boss-commends-womens-sacco-for-outstanding-performance/
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