Amana Insurance is set to launch soon, marking a historic milestone in Ethiopia's financial sector as the country's first takaful company.
Currently in the final stages of staffing and office setup, Amana Insurance was established with an initial paid-up capital of ETB260.4m ($1.8m), below the new National Bank of Ethiopia (NBE) minimum capital requirement of ETB400m for insurance companies, reported the English-language newspaper, Capital.
Organiser Ahbabu Abdella explained that since the company’s funding was raised before the new minimum capital requirement Amana Insurance has two to three years to comply with the higher capital requirement, and plans are underway to raise additional funds through share sales.
The takaful company has strong backing from major Ethiopian interest-free banks including Hijra, Rammis, and Shebelle Banks, each holding a 5% share. Additional shareholders comprise individuals and members of the local business community.
Led by Mr Zuheir Hassen, a Sudanese veteran of the insurance sector and former CEO of Sudan United Insurance, Amana Insurance has 83 shareholders.
Licence
The company expects to secure final regulatory approval of its licence within two months after submitting the remaining documentation, with operations planned to commence within four months following licensing.
Amana Insurance faces challenges mainly due to a shortage of skilled professionals experienced with financial institutions operating under Shariah law.
Despite initial hurdles, the founders express optimism about the company’s market prospects. They believe that introducing fully interest-free insurance will attract new customers rather than cannibalise existing markets—mirroring the growth seen after the establishment of fully interest-free banks in Ethiopia.
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