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The Islamic Finance Handbook: A Practitioner's Guide to the Global Markets by REDmoney

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Chapter 28TanzaniaThe Growing Competition in Islamic Banking

Uwaiz Jassat

Acting Head, Absa Islamic Banking, and Head, Absa Takaful

Islamic banking was launched in Tanzania by Kenya Commercial Bank in 2008. The National Bank of Commerce and Stanbic launched Islamic offerings in 2010. Islamic banking in Tanzania has grown in popularity based on the fact that almost half of the population is Muslim. In addition to the number of banks, the product range has increased. More recent Islamic offerings have been made available by People's Bank of Zanzibar and Amana Bank, which is the only bank in Tanzania currently offering Islamic banking products exclusively. It is estimated that 91 percent of the population is currently unbanked.

The majority of Swahili and east African Muslims belong to the Sunni Shafi school of Islam. A number of Muslims belong to various Shia schools, such as the Ithna Asharia, the Agha Khan Ismaili, and Bohra. These are mostly of Asian origin. East Africans of Omani origin almost all belong to the Ibadi sect, whereas those of Yemeni origin may follow the Maliki, Hanbali, or Shafi schools. Many Sufi orders also exist.

Shiites came to east Africa during the colonial era; many of them are rather well-to-do and live somewhat secluded lives. In particular, the Ismaili followers of Agha Khan have concentrated on establishing schools, hospitals, and libraries; building societies and guesthouses; and engaging in industrial development. Before the radicalization of socialist ...

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