Corporate News
By Bernardo Vizcaino
In Summary
- The lender will initially roll out Islamic banking services through seven branch centers, beginning from next month.
- KCB already offers Islamic banking services in Tanzania.
Kenya Commercial Bank
(KCB), the country's largest lender by assets, plans to offer Islamic
banking products through its entire branch network, accelerating the
expansion of sharia-compliant banking in Kenya.
The move comes after Kenya's Capital Market Authority
proposed a separate regulatory framework for Islamic finance, part of a
broader strategy designed to boost the country's capital markets.
KCB has received all necessary approvals to launch
Islamic banking across its 182 branches in the country, chief executive
Joshua Oigara said in a statement. "In the long term, the product will
promote development in the marginalised areas of our country," Oigara
said.
The lender will initially roll out Islamic banking
services through seven branch centers, beginning from next month. KCB
joins Standard Chartered in offering Islamic banking services in Kenya,
after the British lender launched its "Saadiq" brand in March.
Islamic finance, which follows religious principles
such as bans on interest payments, accounts for roughly 2 per cent of
total banking business in Kenya, where Muslims make up about 15 per cent
of the population of 40 million.
There are currently two full-fledged Islamic banks
in Kenya - Gulf African Bank and First Community Bank (FCB) - as well as
Islamic banking services at several conventional lenders.
KCB, which operates across east Africa from Burundi
to South Sudan, already offers Islamic banking services in Tanzania.
Islamic finance is also being developed by several other sub-Saharan
countries in Africa such as Nigeria and Djibouti.
In June, Kenya's finance minister said the
government would consider issuing Islamic bonds, or sukuk, after a
successful debut $2 billion Eurobond.
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