The Birthplace of Modern Islamic Banking: Mit Ghamr

Imagine a small town in Egypt sparking a financial revolution that would eventually spread across the globe! That's exactly what happened in Mit Ghamr, a town in the Dakahlia Governorate of Egypt, where the seeds of modern Islamic banking were sown. In 1963, the visionary economist Dr. Ahmad El-Naggar established the Mit Ghamr Savings Bank, marking the inception of interest-free banking based on Islamic principles. This pioneering initiative was driven by the need to provide financial services that aligned with Islamic law, which prohibits the charging of interest, known as "riba."

Dr. El-Naggar's experiment in Mit Ghamr was a response to the socio-economic challenges faced by the local community, where traditional banking systems were either inaccessible or incompatible with Islamic beliefs. The bank operated on a profit-sharing model, where depositors would earn returns based on the bank's profits rather than fixed interest rates. This innovative approach not only adhered to Islamic financial principles but also encouraged savings and investments among the local population.

The success of the Mit Ghamr Savings Bank was evident as it attracted a significant number of depositors and borrowers, demonstrating the viability of Islamic banking. Although the bank was eventually nationalized and integrated into the Egyptian banking system, its legacy lived on. The principles and practices developed in Mit Ghamr laid the groundwork for the establishment of Islamic banks worldwide, including the Dubai Islamic Bank in 1975, the first official Islamic bank.

Today, Islamic banking has grown into a global industry, with assets exceeding $2 trillion, serving millions of customers across the Middle East, Asia, Africa, and beyond. The story of Mit Ghamr is a testament to how a small, innovative idea can transform into a global movement, reshaping the financial landscape and offering an alternative to conventional banking systems.