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Kenya's regulator joins global Islamic financial board to spur growth

Xinhua, December 16, 2016 Adjust font size:

Kenya's financial market regulator said Thursday it has been admitted by the Council of the Islamic Financial Services Board (IFSB) as an associate member, an important progress in positioning Nairobi as the premiere Islamic finance hub in Africa.

The move to admit the Capital Markets Authority (CMA) into Malaysia-based IFSB is believed to help boost Islamic finance uptake in the country.

"This admission is a key step towards the development of Kenya as an Islamic finance hub in the East African region, which is a critical component in the establishment of Nairobi as an International Financial Center," CMA Chief Executive Paul Muthaura said in Nairobi.

Muthaura said Kenya's Islamic finance market has also witnessed substantial growth over the last few years with several financial sector institutions of Islamic orientation operating today, including two fully fledged Islamic banks and five Islamic windows including two credit unions.

He observed that based on the global trends, the Islamic finance industry in Kenya remains largely untapped based on the significant real economy funding needs, particularly in the infrastructure space, that are well aligned to Islamic or alternative financing structures.

"As an aspiring Islamic finance hub, with the right facilitative environment, we have a real opportunity to attract investment and capital inflows both from Muslims and non-Muslims locally and internationally," Muthaura said.

He said Kenya is in a unique position and only needs to implement policies that will further facilitate Islamic Finance, for it to reap the benefits of such efforts.

The IFSB is the global standard setting body which promotes the development of a prudent and transparent Islamic financial services industry through introducing new, or adapting existing, international standards consistent with Shariah principles, and recommends them for adoption.

Muthaura observed that Vision 2030 identifies financial services as a priority sector expected to play a central role as a key facilitator in the achievement of the Vision.

The economic pillar has, as one of its main strategies, the broadening of the product offering in the financial markets to both domestic and foreign investors.

To help diversify the product portfolio, Kenya has for some time now been laying the foundation for making the country a financial services hub, with one of the focus areas being its emergence as an Islamic Financial Hub. Endit