Uganda in­sur­ers want Taka­ful fast tracked

East African Business Week - - NEWS - BY SA­MUEL NABWIISO

KAMPALA—UGANDA ------In­sur­ers in Uganda are push­ing for the In­tro­duc­tion of Taka­ful In­surance scheme which they say will boost the in­surance sec­tor by at­tract­ing more clients.

“We have signed a Mem­o­ran­dum of Un­der­stand­ing (MOU) with Al­huda CIBE to en­sure the suc­cess of taka­ful in Uganda. Our part­ner­ship will ex­tend to, among oth­ers, ca­pac­ity build­ing, prod­uct de­vel­op­ment, de­sign and dis­tri­bu­tion, ap­pro­pri­ate mod­els for this mar­ket and ad­vis­ing on suit­able reg­u­la­tory frame­works,” said the Uganda In­surer’s As­so­ci­a­tion Chief Ex­ec­u­tive Of­fi­cer Miriam Ma­gala dur­ing the Taka­ful sym­po­sium in Kampala. She said “Taka­ful will al­low for, among oth­ers, di­ver­si­fi­ca­tion in the prod­ucts that the in­dus­try can pro­vide to its ever chang­ing and grow­ing mar­ket and given that in­surance pen­e­tra­tion in Uganda is less than 1%, we are con­fi­dent that more and more Ugan­dans take up in­surance with the in­tro­duc­tion of Taka­ful,” To see that the Is­lamic ori­gin kind of In­surance kicks off in Uganda, UIA has al­ready signed Mem­o­ran­dum of Un­der­stand­ing with Al­huda Cen­tre of Is­lamic Bank­ing and Eco­nomic (CIBE), to en­sure the suc­cess­ful im­ple­men­ta­tion of Taka­ful. Ma­gala said the MOU will help UIA in de­sign­ing prod­ucts and ca­pac­ity build­ing of the in­sur­ers’ staff in the coun­try about TAKA­FUL in­sur- ance. The Gov­ern­ment has as­sured the In­sur­ers that Min­istry of Fi­nance Plan­ning and Eco­nomic De­vel­op­ment will sup­port the ini­tia­tive that drives the in­tro­duc­tion of the Is­lamic fi­nan­cial ser­vices in the coun­try. “Let the In­dus­try player be as­sured that gov­ern­ment’ is sup­port all kinds of de­vel­op­ment in the fi­nan­cial sec­tor such as the in­tro­duc­tion of Is­lamic fi­nanc­ing which is seen as one of the ways the coun­try will achieve fi­nan­cial in­clu­sion. Sim­i­larly, the In­surance Reg­u­la­tory Author­ity of Uganda has also in­di­cated a need to col­lab­o­rate as the in- dus­try through a con­sul­ta­tive process to en­sure that the proper reg­u­la­tion is in place to sup­port in­dus­try ini­tia­tives such as the in­tro­duc­tion of TAKA­FUL In­surance,” Henry Mbaguta- As­sis­tant Com­mis­sioner Fi­nan­cial Ser­vices Depart­ment said. He told the par­tic­i­pants dur­ing the pre­sen­ta­tion on TAKA­FUL In­surance in Kampala which was at­tended by par­tic­i­pants from the In­surance sec­tor, Bank­ing and Con­sumer groups. What is TAKA­FUL In­surance? Ac­cord­ing to Mr. Muhammad Zubair Mughal, Chief Ex­ec­u­tive Of­fi­cer, of the Al­huda Cen­tre of Is­lamic Bank­ing and Eco­nomic (CIBE), Taka­ful in­surance is the Sharia com­pli­ant brand name for the Is­lamic al­ter­na­tive to con­ven­tional in­surance and is based on the prin­ci­pal of Ta’awan or mu­tual as­sis­tance.

Mughal fur­ther noted that al­though peo­ple gen­er­ally think about Is­lamic fi­nanc­ing or Is­lamic bank­ing & in­surance as only for Mus­lims, these ser­vices can be uti­lized by both Mus­lims and non-Mus­lims.

Taka­ful in­surance can be traced as far back as 1979 when the first Taka­ful com­pany was opened up in Su­dan. Since then more com­pa­nies have opened up in coun­tries like Malaysia, Pak­istan, Iran and Egypt.

Miriam Ma­gala, Uganda In­surer’s As­so­ci­a­tion Chief Ex­ec­u­tive Of­fi­cer

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