Hijra Bank Review

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Hijra Bank Exchange Rate

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About Hijira Bank

Hijira Bank is one of the developed Banks that recently started bank operations in Ethiopia, targeting to be the premier Partner in Ethical Banking. Hijra was established on January 16, 2022, Hijra bank capital during its establishment was 1.2 billion birr, of which 700 million birr was paid by 9,000+ small farmers, peasants, un banked communities, and small traders from all parts of the country. The Bank is the second full-fledged interest-free Bank in Ethiopia.

The opening of these IFBs has been a relief for the Muslim community, which was financially excluded due to the absence of Sharia-compliant banks in the country. Hijra was established as a bank of the nation and all regions based on the attentive operation plan and strategy. The Bank stands to satisfy its shareholders, customers, and all community by putting its contribution to the national economy and providing full-fledged banking service in all regions of the country; Hijira Bank has demonstrated its strict adherence to its core value of inclusion, fairness, and diversity in all its operations. It can be concluded that Hijra Bank is a center for diversity and inclusive, reflected in branch expansion, resource allocation, and staff recruitment.

More About Hijira Bank

Hijra Bank has built a strong reputation for its firm in accordance with Sharia principles. Hijira provides interest free banking ,All the Bank’s financial products and services are regulated by Islamic Banking principles. They are periodically reviewed and approved by the Sharia Advisory Committee, consisting of 7 members of Sheiks, imams, and respected religious scholars. Furthermore, the Bank is peculiar for using Core Banking System acquired from the first and only AAOIFI-certified Sharia-compliant software solutions.

Currently, the Bank has about 60 branches in different locations and more than 185,000 customers nationwide. Making Hijira Bank one of the fastest-growing IFB banks in the country. The Bank has also leveraged digital technologies with Mobile and Internet banking to enhance financial inclusion in addition to its regular banking operations.

The IFB system can be a bit ambiguous for both customers who are and are not followers of the Islamic religion. How does the Interest-free banking system work, and what do the customers get from it?

Banks that work under Sharia principles, like Hijira Bank, provide a system that allows customers to get a profit out of their savings without interest; this is how: –

• Through trading via muraban financing
• By constructing buildings through Istisna
• By engaging in the import & export trading
• By working together on feasible projects
• Extending fee-based service to the customers like guarantee services.

Services provided by Hijira Bank

Murabaha Financing

Murabaha is often used as an alternative to interest-based loans in Islamic finance. It is a sale transaction where the seller pays off the cost of the goods being sold, as well as a profit margin that the seller adds on top of the price. This complies with Islamic law principles because the profit earned is based on selling tangible goods rather than charging interest on a loan the Bank provides interest free bank loans,(direct interest gains from deposits),the service include interest free mortgage loan,interest free vehicle loan,islamic loans interest free.

Mudarabah & Musharekah

• Mudarabah

  is a profit and loss sharing partnership in which one part (the investor) provides capital to a business venture, and the other (the entrepreneur or mudarib) manages the project. The profits generated by the investment are shared between the investor and the entrepreneur according to a predetermined ratio, while the losses are borne by the investor alone.

• Musharakah

  is similar to Mudarabah, but in this case, both parties contribute capital to the venture and share in profits and losses.

Wakallah

This refers to an agency or representation contract. It is an agreement in which the principal appoints the agent or wakil to represent them and act on their behalf in a specific matter. The Hijira Bank agent is given the authority to make decisions and take actions on behalf of the principal but is also held responsible for the consequences of those actions.

Istisna & Salam

• Istisna

  is a contract for the manufacture and future delivery of a specific good. It is used to invest in producing goods that still need to exist, such as buildings or infrastructure projects. Under an Istisna contract, the buyer pays the seller earnest money and then makes the remaining payments after manufacturing the goods. The good is delivered to the buyer when the work is completed.

• Salam

  is a contract for the good delivered to the buyer with only prepayment, and the rest of the payment is issued at predetermined intervals. It is used to finance the purchase of goods already in existence, such as agricultural products.

Haramain

1. 1. Haramain Wadia savings account for Hajj and Umrah

The Haramain Wadia Hajj and Umrah Savings Account Service are for customers who want to make Hajj and Umrah trips by saving money in advance permanently/regularly at a particular time and making deposits by Haramain system, meaning that customers can decide the time and amount of savings every month.

In addition, Hijira Bank provides features and benefits like an easier way to perform Hajj and Umrah for religious followers. The fact that the account is open for all Ethiopians living in the country or abroad (foreign currencies users ) with no age limit makes the diversified community inclusive and aware of what the performance of the Hajj system is like, and customers who save 50% of the amount needed for the Hajj and Umrah journey through regular savings, the Bank lends the remaining 50% for free through Qard Al-Hassan.

1. 1. Haramain Hajj/Umrah Installment Saving

This account’s unique feature is that Qard Al-Hassan offers up to 50% free loans to customers who can make fixed monthly savings for 1-5 years, depending on the situation. The account is open for all Islamic communities regardless of location and age difference (children can open accounts through their guardians ); the Bank works to make travelers aware of what the performance of the Hajj system is like.

 Hijira Bank Digital Banking

Mobile Banking:

• Allows customers to access their bank accounts and perform financial transactions using a mobile device, check their account balances, view transaction history, transfer money between accounts, pay bills, and more, all from their mobile devices.

Internet Banking: allows customers to manage their finances and complete transactions anytime, anywhere, as long as they have an internet connection. Customers can view their account balances, and transaction history, pay bills, transfer money between accounts, and more, all through a secure website and the additional layer of security, as transactions are protected by login credentials and other security measures

ATM Network: Hijira Bank has expanded its ATM network to over 500 ATMs across Ethiopia.

USSD: allows customers to access their bank accounts and perform financial transactions using their mobile phones without needing a smartphone or internet connection. The customer is only expected to dial *827# on a mobile phone, which connects them to the Bank’s USSD service. They can then follow the prompts to complete transactions or access information about their accounts.

Hijira Bank’s digital banking services include:

• Mobile banking app for Android and iOS devices
• Online banking platform for internet banking

Hijira Bank’s Financial Performance

1. Total Assets: Hijira Bank’s total assets increased by 20.1% to ETB 65.6 billion (approximately USD 1.3 billion) as of December 2023.
2. Net Profit: The bank reported a net profit of ETB 2.5 billion (approximately USD 50 million) in 2023, a growth of 22.2% compared to the previous year.
3. Return on Equity (ROE): Hijira Bank’s ROE improved to 18.5% as of December 2023, up from 16.3% in the previous year.
4. Return on Assets (ROA): The bank’s ROA increased to 1.83% as of December 2023, up from 1.53% in the previous year.
5. Capital Adequacy Ratio (CAR): Hijira Bank’s CAR stood at 17.8% as of December 2023, exceeding the regulatory minimum requirement of 15%.
6. Loan to Deposit Ratio (LDR): The bank’s LDR decreased to 63.2% as of December 2023, down from 66.5% in the previous year.

Contact Information

Hijra Bank phone number: +251 15581899

Hijra email address: [email protected]

SWIFT: HIJRETAA, Addis Ababa, Ethiopia

Hijra Bank Head Office: Dembel, on the way to Olompia, Addis Ababa, Ethiopia