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Erudite AfricaCenter of Excellence
← Interest Free Banking Financing: Foundation

Principles of interest free banking

Module 01 / 6 · 60 min · Free preview

Learn the three prohibitions of riba, gharar and maysir, the rules that replace interest, and why every IFB financing must be tied to a real asset, service or venture.

In this module you will learn to

  • Name the four sources of Sharia'h and the order in which a bank applies its own rules
  • Explain riba, gharar and maysir with everyday examples
  • Describe the principles that replace interest: trade, leasing, partnership and risk going with reward
  • Contrast a conventional loan with an IFB financing step by step
  • Sort transactions and business activities into permissible and not permissible

Built on

  • Erudite Africa Investments course outline: Interest Free Banking Financing, Three-Level Course, Level 1 Foundation (October 2026)
  • A typical Ethiopian bank's interest free banking financing business procedure (May 2025), unnamed: definitions, governance, roles and team approach
  • NBE Directive No. SBB/72/2019, Licensing and Authorization of Interest Free Banking Business
  • NBE Bank Corporate Governance Directive No. SBB/91/2024 (influential shareholder at 2%)
  • AAOIFI Sharia'h Standards, including No. 8 Murabaha, No. 9 Ijarah, No. 10 Salam and No. 11 Istisna'; the host bank's Sharia'h Advisory Committee rulings take precedence

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.