Bank of Abyssinia joins Path Solutions’ list of partners in Africa

By Pavithra R

Kuwait based global Islamic software provider Path Solutions has announced that the company has signed a partnership agreement with the Bank of Abyssinia (“BoA”), a leading banks in Ethiopia serving more than 4.6mn customers through 580+ branches and Islamic windows.

Under the partnership, BoA will be implementing iMAL*IslamicFinancing and iMAL*ProfitCalculationSystem (iMAL*PCS) 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 efficient. The process automation coupled with a complete set of dashboard data analytics capabilities gives decision-makers of Islamic FIs the tools to make accurate decisions swiftly.

To ensure maximized customer satisfaction in accordance with Sharia principles, the solution includes innovative pool structures and profit distribution rates. All profit rate adjustments are made according to the Sharia and handled automatically by the system, which allows Islamic FIs to specify the rules for splitting profits. The system provides banks 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.

“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,” said Mohammed Kateeb, the Group Chairman & CEO of Path Solutions.

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. iMAL from Path Solutions, being a pure Islamic software, certified by AAOIFI can be seamlessly incorporated into an Islamic FI, and can be integrated with any conventional core banking platform to enable the organization to compete 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. 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”, said Abdulkadir Redwan, Director – Interest Free Banking at BoA.