Oromia Bank’s Interest-Free Financing Hits 7.5 Billion Birr in Eight Months

Oromia Bank is reinforcing its position in Ethiopia’s Islamic finance space, reporting strong growth across its interest-free banking (IFB) portfolio alongside continued community engagement initiatives.

The bank’s IFB financing climbed to 7.5 billion birr as of February 28, 2026, marking a substantial rise from 4.5 billion birr recorded in June 2025. This 67% increase within eight months signals sustained demand for Sharia-compliant financial solutions in the market.

Deposits under the IFB window also showed steady growth, reaching 11.78 billion birr, up from 10.2 billion birr over the same period. The figures, shared with Ethiopian Business Review, indicate improving customer confidence and liquidity in the segment.

Customer expansion remains a central driver of this growth. Oromia Bank’s IFB client base rose from 1.8 million to 2.1 million within eight months, reflecting accelerated adoption. This builds on the previous fiscal year’s performance, where customers grew by 24% to nearly 1.84 million by June 2025. Despite the large customer base, the number of borrowers remains relatively limited, reaching 575 by the end of that fiscal year—suggesting further room for financing penetration.

Beyond financial metrics, the bank continues to integrate social responsibility into its IFB model. During its annual 1447 Ramadan charity program held earlier this week, Oromia Bank distributed 3.75 million birr to six charitable organizations working in humanitarian and community support sectors.

Key beneficiaries included Awoliya Relief and Development Organization and Al Amana Abdulfatah Foundation, alongside four other institutions focused on social welfare and relief efforts.

Asha Mohammed, Director of IFB Operations, stated that the initiative has been sustained for four consecutive years, emphasizing the bank’s approach of aligning financial services with community impact. She noted that the institution remains committed to supporting vulnerable groups while expanding access to ethical banking.

Chief Executive Officer Teferi Mekonnen highlighted that Oromia Bank’s strategy goes beyond profitability, positioning social responsibility as a core operational pillar. He indicated that such initiatives are integral to maintaining trust and long-term customer relationships.

As one of the early adopters of interest-free banking in Ethiopia, Oromia Bank has built a nationwide IFB infrastructure through dedicated service windows and tailored financial products. Its continued expansion reflects a broader shift in Ethiopia’s banking sector, where demand for alternative, Sharia-compliant financial services is steadily increasing.

The latest performance suggests that IFB is no longer a niche offering but an emerging mainstream segment, with Oromia Bank playing a central role in shaping its trajectory.