Kenya has seen the emergence of Islamic financial institutions in recent years, including two Islamic banks, five Islamic banking windows offered by traditional commercial lenders, insurance firms and a unit trust fund.
Islamic finance is therefore seen as a feasible complement and alternative to conventional banking and an office dedicated to oversee the Islamic finance industry has been established to, among other matters, help prepare for the issue a debut sovereign shariah-compliant bond, known as a sukuk.
This is among measures taken by the Kenyan government to build the Islamic finance industry as part of a long-term plan to turn Nairobi into an International Financial Centre.
Stakeholders believe there are numerous opportunities in Islamic banking for investors which if tapped would steer Kenya towards the country’s long-term plan to turn Nairobi into an international financial hub.
Kenya, which has aspired to become a member of the International Islamic Financial Services Board, is carrying out legal and policy reforms to facilitate the growth of the industry.
Among challenges facing Islamic finance are low levels of technical capacity in areas of information technology, human capital, knowledge in Islamic finance and regulations.
Currently, Islamic banking accounts for just two per cent of Kenya’s banking business.
Source: NAM NEWS NETWORK.