Bank of Abyssinia taps into Path Solutions to achieve Sharia compliance and operational efficiency
Path Solutions, a global provider of AAOIFI-certified software solutions and services for Islamic banks and financial institutions, today announced the signing of a new partnership agreement with Bank of Abyssinia (“BoA”), one of the leading banks in Ethiopia serving more than 4.6 Million customers through 580+ branches and Islamic windows. As a new addition to Path Solutions’ fast-growing client base, BoA will be implementing iMAL*IslamicFinancing and iMAL*ProfitCalculationSystem for its Islamic window operations.
iMAL*PCS provides end-to-end capabilities to manage the entire profit calculation and distribution cycle, making Islamic profit distribution highly efficient. The process automation coupled with a complete set of dashboard data analytics capabilities gives decision makers of Islamic financial institutions the tools to make fast and accurate decisions. The solution includes innovative pool structures and profit distribution rates to ensure customer satisfaction is maximized in accordance with Sharia principles. All profit rate adjustments are made according to the Sharia and handled automatically by the system, which also allows Islamic financial institutions to specify the rules for splitting profits. The system provides each bank with facilities to tailor its own profit calculations according to the product set and define pool structures that reflect the income and expenses for finance and investment transactions funded by each pool.
Mohammed Kateeb, the Group Chairman & CEO of Path Solutions commented, “I am delighted to welcome BoA to our growing list of partners in Africa. We’ve got an impressive track record of working with financial institutions in integrating our AAOIFI-certified suite of services with their existing core banking platform, whether conventional or Islamic. BoA’s decision to entrust our Sharia-compliant profit calculation and distribution system is testament to our ability to effectively address the business pains financial institutions are experiencing, and the severe consequences for Sharia non-compliance”.
Ethiopia has recently allowed the formation of full-fledged interest-free banks, and thus several banks are currently planning to convert to Islamic or raising fund to start Islamic banking services. However, most technology and software solutions in the country are designed for the conventional banking infrastructure. A pure Islamic software, certified by AAOIFI such as iMAL from Path Solutions can be seamlessly incorporated into an Islamic financial institution, and it can be integrated with any conventional core banking platform to enable the organization to compete more effectively in this competitive business environment.
“After much research and due diligence on Islamic banking software, we chose Path Solutions’ iMAL for its broad and comprehensive set of features, flexibility, and compliance with AAOIFI’s Sharia and accounting standards”, said Abdulkadir Redwan, Director – Interest Free Banking at BoA. “Our partnership with Path Solutions is vital to ensure all Islamic requirements are met for our stakeholders, and to compete in the rapidly changing Islamic financial landscape in the country. The iMAL*PCS deployment will enable us to utilize the net income during the calculation period and distribute it among investors according to the Sharia guidelines. In addition to its advanced automation capabilities, this all-inclusive system will allow us to offer new Sharia-compliant products to our customers with a truly differentiated customer experience”.
BoA represents the first signing for Path Solutions in Ethiopia. Driven by ambitious objectives and the lure of new untapped markets, more and more IT vendors are looking to expand in Africa. Path Solutions has a long history of addressing the special needs of Islamic banks in the African continent, particularly with the provision of AAOIFI-certified software solutions and services.
About Bank of Abyssinia
Bank of Abyssinia is a leading financial services provider located in Addis Ababa, Ethiopia, offering a variety of innovative banking products. The bank serves over 4.6 million customers through its large network of more than 580 branches and 633 ATMs in the country.
BoA started its operations with an authorized paid up capital of Birr 50 million, and Birr 17.8 million respectively, and with only 131 shareholders and 32 staff. In about sixteen years since its establishment, the bank has registered a significant growth in paid up capital and total assets. This performance indicates public confidence in the bank and reliability and satisfaction in its services. BoA is also registering success in the area of Islamic banking with its customer base now exceeding half a million. To know more, visit www.bankofabyssinia.com