President Museveni Assures Muslims on Compliance with Islamic Principles in PDM Funds Allocation

President Museveni addressed concerns raised by Taqwa Islamic Sacco regarding the Parish Development Model (PDM) program's adherence to Islamic teachings against Riba (interest). He clarified that the annual Shs100 million allocated to each parish is provided as a grant, not a loan, exempting it from interest-related concerns.

President Museveni has reassured Muslims that the funds allocated under the government’s Parish Development Model (PDM) program do not violate Islamic teachings against Riba (interest) and are intended to benefit communities without generating profits. Responding to concerns raised by Taqwa Islamic Sacco, President Museveni emphasized that the annual Shs100 million allocated to each parish is provided as a grant, not as a loan, thereby exempting it from interest-related concerns.

In a letter dated Monday, President Museveni underlined that the modest percentage tax on PDM funding is intended to ensure the program’s stability in the face of inflationary pressures, not to generate profits. He added that a nominal interest rate, such as 5%, is meant to preserve the purchasing power of the allocated funds, allowing them to retain their worth over time.

Addressing the operational costs borne by Parish Saccos, President Museveni emphasized the significance of raising more funds to cover expenses like transaction materials. Saccos can manage their operational costs without depleting the allocated funds by charging a low interest rate, assuring the program’s long-term viability.

President Museveni contrasted the PDM funds’ approach with that of conventional money lenders, noting the latter’s exorbitant interest rates. He pointed out that, whereas typical money lenders may charge up to 3 percent interest per month, or 36 percent yearly, the PDM’s nominal interest rate is purely intended to protect the value of the allotted funds rather than make profits.

In response to Taqwa Islamic Sacco’s concerns, President Museveni extended his support by granting Shs200 million to the Sacco, underscoring the government’s commitment to empowering and supporting Islamic financial institutions.

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