Saturday, July 13, 2024

Zamzam hits record share sale


The first interest free bank in Ethiopia, Zamzam closed the share sales with a record amount on both paid and subscribed capital in the history of Ethiopia’s financial industry.
As of Friday October 11, the last date for selling shares, the bank sold 1.2 billion birr worth of shares and from this 600 plus million birr is paid.
The bank that commenced the share sales three month ago has surpassed the National Bank of Ethiopia (NBE), supervisory body, minimum paid up capital of half a billion birr by one fifth and stands at over 600 million birr.
Nassir Dino, IT specialist, one of the founders and chairman of the under-formation bank, told Capital that the time frame that they achieved regarding the share sales might be historical like the record collection of the subscription or paid up capital.
He remembered that when they initially tried to form the bank in 2011 the capital collection was a record for the sector but the move was cut by the government at the time.
On Friday June 21, the bank that was the first for interest free banking has offered one billion birr worth of share sales.
The bank had offered one billion birr worth of capital with half to be paid that would meet the requirement of the NBE, but the success is very far from the target.
During a meeting in the Islamic holy month of Ramadan on Wednesday May 22 between the organizing committee members of Zamzam and Central Bank officials, Yinager Dessie, Governor of NBE, allowed Zamzam to undertake the formation process.
The green light came on the same day that PM Abiy Ahmed, who attended the massive Grand Iftar evening organized by the Ethiopian Islamic Affairs Supreme Council, announced that the government would allow interest free banking in the country.
Following the government’s decision, the formation of Zamzam Bank, the under formation first full-fledged interest free banking institution, resurrected. The opening up of the business will be disclosed in the near future Nassir said
The minimum share an individual buys at Zamzam is 50 birr with 1,000 birr each share, while the maximum is limited by NBE that cannot not exceeded 5 percent of the total capital.
Initially Zamzam introduced its activity immediately after the Banking Business Proclamation authorizing the establishment of interest-free banking in 2008, and sealed the formation process by the general assembly held in April 2011 but failed to commence operation after the central bank issued a new directive that push the operation to conventional banks.
Due to that the board directors who meet with shareholders in June 2011 decided to refund the mobilized capital for shareholders based on the interest of the share buyers.
On its share sales the company was able to amass an actual collection of 330 million birr as subscription, which was higher compared with the initial plan to collect quarter of a billion birr. At the time about 6,800 people buy the share that was 20 shares on minimum requirement with 1,000 birr share value.

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