What Is Islamic Finance And What Does It Mean For Kenyans?

Kenya is one of the most advanced countries when it comes to banking. The country has more than 42 banks and financial institutions offering various products and services.

For more than 10 years, Kenya led other countries within and without Africa in financial inclusion. The country’s financial inclusion drive has been made easy by banks and mobile banking systems.

Among the banking products offered in Kenya is Islamic banking (Islamic Finance). Initially, Islamic banking (finance) was only meant for Muslims but with time, banks have diversified to accommodate others outside the faith.

Under Sharia law, it is not permitted to charge interest as the money isn’t allowed to generate more money by being put into a bank account or lent to someone else.

Instead, banks make their money by sharing the risk of their investments with investors, operating on a profit-loss basis.

Putting the numbers into perspective, the global Islamic financial services industry reached an overall total value of more than USD 3.2 trillion by 2021.

It is important to note that the Islamic finance industry in Kenya remains largely untapped, despite the desire to turn Kenya into an Islamic finance hub for the East African region. There is a huge potential but let utilized.

In 2016, the International Monetary Fund found that African countries accounted for only 1 percent of global Islamic finance assets.

And according to The Economist’s Intelligence Unit report, Islamic banking represented only 2 percent of Kenya’s total banking assets.

There is a silent evolution in Kenya as the country works towards developing a sustainable real economy.

Ambitious changes affecting all Kenyans are being rolled out, the benefits of which will be felt for generations to come. This is the long-term development blueprint that aims to create “a globally competitive and prosperous country with a high quality of life by 2030.”

As part of the vision, the Kenyan regulators are working towards developing financial markets that offer Islamic products and services aimed at providing an inclusive financial sector focus.

So, what does Islamic finance mean for Kenyans and what are some of the opportunities that come with it in Kenya?

This Friday, the Kenya Bankers Association (KBA) will be continuing with its quarterly series of #CEOChat where Kenyans get an opportunity to have a one-on-one with a CEO from one of the top banks in Kenya.

This Friday, the CEO of DIB Bank Kenya, Mr. Peter Makau will be answering questions on Islamic Finance, Business, and Expansion Opportunities.

DIB Bank Kenya is one of the few financial institutions in Kenya that offer Islamic finance products to Kenyans. The session is virtual and it takes one hour.

To be part of  #MyChatWithABankCEO, one needs to register through https://chat.kba.co.ke/ This process takes less than 15 seconds then log in on Friday to ask questions on the subject.