KAMPALA– Muslims in Uganda have been advised to form Saving and Credit Cooperatives [SACCOs] if they are to benefit from government’s poverty eradication programmes such as Emyooga and Parish Development Model [PDM].
The call was made by Dr. Sulaiman Lujja, Head of Islamic Banking Department at the Microfinance Support Centre [MSC], a government agency that offers Ugandan businesses loans at cheaper interest rates compared to commercial banks.
“I call on the Muslim community to wake up before it is too late. Form or join SACCOs and borrow money for development,” Lujja said, adding that, “borrowing is allowed in Islam because…Prophet Muhammad used to borrow.”
He said that 99 percent of the SACCOs that borrow money from MSC under the Islamic arrangement are conventional, with minimal participation of Muslims. He urged the Muslims in the country to borrow under Islamic finance system if they are to fight poverty and develop themselves.
Lujja was days ago speaking at Hotel Africana in Kampala during a symposium organized as part of the holy month of Ramathan activities by Salam Charity Foundation, to sensitize Muslims on key issues in Islam, one of which was financial literacy.
“I believe that…Muslisms…can also contribute to the economic and social development of the country,” he said, adding that the Muslim faithful have the Koran to give them guidance on financial matters.
He said Catholics in Uganda have been successful with Centenary Bank in the implementation of Islamic banking, urging Muslims to emulate them [the Catholics].
He explained that Islamic banking is not a religious business as it is commonly perceived, but an alternative system of finance operated on Islamic principles.
He said loans given out based on Islamic banking do not attract interest. “The money we are giving out is supposed to be returned after an agreed period. It does not attract interest at all,” he said, “Islamic finance systems does not burden the borrowers.”
He said countries like Malaysia and United Arab Emirates have developed largely because of the Islamic finance system, which he said also exists in Europe and the United States of America.
He urged leaders from different Muslim factions in the country to stop wrangles and instead focus on helping the faithful to participate in income-generating activities.
“You want Muslims to pay Zakat [Alms giving], but how will they do that if they are poor?” He asked, urging the leaders to sensitise people on poverty alleviation, even during prayers in Mosques.
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