Islamic Banks in Ethiopia—Vaults for Deposits

I remember the first time I walked into an Islamic bank in Addis Ababa, full of anticipation. I had read all about Islamic finance—partnerships, risk-sharing, ethical investments—and I was eager to experience this alternative to the traditional, interest-based banking system. I imagined a conversation where the banker would lean forward and say, "Tell me about your grand business idea. Let's change the world together."

But instead, I found myself sitting across from a banker who asked, with a smile, “Would you like to open a savings account?”

I blinked. Savings account? Is this a trick question? Where was the excitement of musharakah (equity partnerships) or mudarabah (profit-sharing)? No talk of investment, no grand financial plans—just a basic, interest-free savings account. Not quite the revolutionary finance system I had imagined.

I mean, it was almost as if I walked into a restaurant expecting a five-course meal and ended up with a bowl of soup and some stale bread. Sure, it's a good start, but where’s the main course?

When Islamic banks first opened in Ethiopia, we all had high hopes. We envisioned a financial system that would free us from the grip of interest rates and offer something innovative. We dreamt of real partnerships, risk-sharing, and investment in industries like agriculture, energy, and entrepreneurship.

Instead, we got... savings accounts. Interest-free, yes, but about as exciting as watching paint dry. No partnerships, no funding for projects that could actually fuel economic growth. Just a place to stash your money, untouched.

Islamic finance isn’t just about avoiding interest; it’s supposed to be about ethical investments, shared risk, and building something bigger than a pile of deposits. In places like Malaysia and the UAE, Islamic finance is fueling large-scale projects—hospitals, highways, and all sorts of development. Meanwhile, here in Ethiopia, we’re still trying to figure out how to make interest-free savings accounts feel like a game-changer.

At this point, it feels like Islamic banks in Ethiopia are just a fancy vault, where money sits, sleeps, and dreams of doing something useful but never quite gets the chance. The promise of Islamic finance—of real partnerships and shared growth—seems to have gotten lost in translation.

But hey, the banks have a chance to prove me wrong. If they step up, move beyond the safe space of savings accounts, and start investing in real projects, they could redefine what banking in Ethiopia looks like. Until then, we’re still waiting for the revolution… or at least a decent sandwich.