Ethiopia is poised to enter the Islamic insurance sector with Amana Insurance S.A., the country’s first fully Shariah-compliant insurance provider. The move marks a significant step in the diversification of Ethiopia’s financial services industry.

Amana Insurance will operate under the Takaful model, an Islamic cooperative insurance system that distributes risk among participants in accordance with Shariah principles. The company has secured financial backing from leading Ethiopian interest-free banks, including Hijra, Ramis, and Shebele, which each hold a five percent equity stake.

Founder Ahbabu Abdalla told Capital News that Amana’s initial paid-up capital is 260.4 million birr. While this figure is below the National Bank of Ethiopia’s recently raised minimum capital requirement of 400 million birr, the company was capitalised prior to the new rule and has a two- to three-year grace period to meet the updated threshold.

The insurer expects to complete its licensing process within two months and commence operations shortly thereafter. Its leadership will include Zuhair Hassan, a Sudanese insurance executive with extensive regional experience and former CEO of Sudan United Insurance.

The introduction of Amana Insurance comes amid growing demand for Islamic financial products in Ethiopia, where a significant portion of the population seeks banking and insurance services aligned with religious principles. This development also reflects broader trends across East Africa, where Islamic finance continues to expand.