a day ago
Standard Bank Launches Southern Africa's First Shari'ah-Compliant Overdraft
Structured under the Shari'ah principle of Wakaalah, the Shari'ah Overdraft facility is a non-interest based alternative that provides businesses with instant access to short-term funding. Linked to the Shari'ah Business Current Account, the new product will allow clients to drawdown up to a pre-approved limit.
'This is not just a product launch, it's a response to a critical gap in Africa's Islamic Finance ecosystem,' said Ameen Hassen, Head of Shari'ah Banking at Standard Bank. 'For too long, businesses that required Shari'ah-compliant financing options lacked fluidity of a working capital solution that an overdraft brings. This overdraft facility empowers entrepreneurs to manage cash flow fluctuations without compromising their values and need for Shari'ah compliance.'
With Sub-Saharan Africa home to 18% of the global Muslim population but accounting for just 1% of worldwide Islamic Finance assets, Standard Bank's innovation arrives as the region seeks scalable, Shari'ah-compliant solutions. The overdraft facility will directly address working capital challenges faced by businesses.
Key benefits of the new product include:
Competitive market related pricing.
Direct linkage to the Shari'ah Business Current Account for streamlined operations.
Certified compliance: The facility is certified by Standard Bank's Shari'ah Advisory Committee.
Not only for Muslims
While Shari'ah Banking adheres to Islamic principles like Wakaalah bi al-Istithmar (agency-based investment), and the prohibition of interest (riba), Hassen said the bank's offering transcends religious boundaries, with approximately 35% of Standard Bank's South African Shari'ah clients identifying as non-Muslim. 'This isn't just for Muslims, it's for anyone seeking transparent, non-interest, asset-based or backed financial solutions,' said Hassen.
The launch builds on Standard Bank's legacy of Islamic Finance innovation, including the world's first Shari'ah-compliant Diners Club product and South Africa's inaugural Shari'ah tax-efficient endowment.
'Africa's economic future hinges on inclusive, innovative finance,' said Hassen. 'With this product, we're not just serving clients, we're innovating, industrialising and advancing a system of finance rooted in tradition and shared prosperity.'
To leverage this Shari'ah-compliant liquidity facility, businesses and individuals can contact their Standard Bank Relationship Manager or email [email protected]. DM
