Kenya is putting in place robust measures to enhance the growth of Shariah-compliant finance products.
This is part of the government’s efforts to reap big from this form of banking which promises to play a more prominent role in the financial sector going forward.
National Treasury Cabinet secretary Henry Rotich said Islamic banking has plenty of opportunities that the country can leverage on to achieve financial stability.
Last week, the country hosted delegates from East Africa for an Islamic Finance and Investment summit putting Kenya at the centre of the fast growing Sharia-compliant banking.
Mr Rotich said Kenya is set to implement measures to foster the growth of Shariah-compliant finance products.
“These activities illustrate the importance of the government’s effort in providing an enabling environment for Islamic finance to grow,” Mr Rotich said.
“The global Shariah-compliant assets have exceeded more than $2 trillion (Sh200 trillion), making Sukuk (Islamic bond) market attract more non-Islamic countries, thereby making Islamic finance the mainstream of global finance.”
Last Wednesday’s East Africa Islamic Finance Summit held in Nairobi was the second major Islamic finance event that the country has hosted in the capital city this year.
Kenya aims to bolster its fiscal stability by embracing the relatively less risky Sharia-compliant products.
The financial sector is considered key to the realisation of the economic blueprint – Vision 2030 which targets at least 10 per cent economic growth annually.
The country is banking on Islamic finance to create a vibrant and globally competitive financial sector that will promote a high level of savings and meet Kenya’s overall investment needs.
Kenya is currently considering the development of two key flagship projects for the financial service sector. One is the establishment of the Nairobi International Financial Centre which seeks to position Kenya as a regional financial hub or international financial centre. The other is the development and implementation of a Capital Market Master Plan.
Mr Rotich said the government needs to take advantage of the opportunities provided by Islamic finance to realize some of its flagship projects.
“The government is also exploring the possibility of becoming a member of Islamic Development Bank in order to leverage on various opportunities that are enjoyed by all the member States,” he said.
“We are now assessing the success of other African countries such Sudan, Gambia, Nigeria, Egypt and South Africa that have already issued a Sukuk as a source of funding for various infrastructural projects.”