State urged to expand Shariah compliant financing to Muslims

As coronavirus pandemic continues to disrupt businesses in the country, the Muslim community has been urged to take advantage of financial institutions offering affordable Shariah compliant financing to jump-start their businesses.

Mr Khalfan Abdallah an expert in Islamic financing has urged the government to rethink how to accommodate Muslims in various financial support programmes such as Youth and Women Fund among others as they are excluded in the current financing structures.

"The government should allow Muslims to take financing in this difficult time according to Islamic financing principles," said Mr Abdallah who is a board member of Momentum Sahih's Shariah Supervisory Board.

Mr Abdallah said the government should borrow a leaf from Momentum Credit Micro Finance which has started offering Shariah compliance financing to Muslims using logbooks as collateral.

"Momentum Credit finance Sahih has proved it is possible and the government should explore ways in which it can offer financing solutions that are Shariah-compliant manner during this Covid-19," said Mr Abdallah.

The official said to bail out Muslims during these hard times, such affordable financial services which are shariah compliant are required.

Mr Abdallah said the new product will allow Muslims and non-muslims to do business and access financing under Shariah Islamic laws.

He observed that Muslims and non-Muslims have different demands on finances saying "the major challenge facing Muslims during this Covid-19 period is how to access financing without paying interest in accordance to the Islamic financing law."

According to Momentum Credit Chief Executive Officer, Job Muriuki the product will allow the Muslims to use their assets like vehicles to get financing while still using the vehicle under the principle of Ijara Mutanhia Bitamleek (lease to own).

Last Thursday, Momentum Credit opened its first Shariah compliant branch at Eastleigh which was also the eighth branch in the country. 

Mr Abdallah said he will use his position to ensure the community reaps big from this unique product and cushion their business against the effects of Covid-19.

"This is a new product and many people want to know how it works, and as Muslim leaders, we shall sensitise the community to take advantage of the new product," added Mr Abdallah.

He urged the Muslim business community who are affected by Covid-19 pandemic to take advantage of Momentum Sahih products.

"These are difficult financial times and for Momentum to come up with a new product at this moment it allows its Muslim clients to use their vehicle as surety to give their businesses a shot in the arm," said Mr Abdallah.

He said the end of Covid-19 pandemic is unpredictable with the rising positive cases in the country.

"The Muslims should seize this rare opportunity and turn around their businesses and uplift their living standards," he added.

Mr Muriuki said the launch of Sahih which is the new product was a game-changer in the Islamic financial landscape in Kenya.

"We want to support Muslims in their commercial activities as they play a significant role in Kenya's economy," said Mr Muriuki.

He noted that there 5.2 million Muslims in Kenya today which translates to about 11 per cent of the Kenya population.

"This is a market that has been underserved, ignored for too long and I am optimistic Momentum Sahih will change this narrative for the better of the community," said Mr Muriuki.

He thanked Lawyer Ali Mohammed, Islamic finance expert Khalfan Geituk and Prof Mohamed Salim Badamana for being instrumental in developing financing Islamic products for Momentum Credit.

Prof Badamana who is a member of the Amana Bank and the Gulf Bank said that Sahih logbook financing alongside the opening of the Eastleigh branch of Momentum Credit in Shariah compliant manner will boost the Muslim community in the region.

He urged the Muslim community to take advantage of this product as it is Shariah compliant and also the charges are fairly low and it is user friendly.