Govt moves to develop and regulate Islamic finance sector
Customers at the Gulf African Bank in Nairobi. Currently, the country does not have a standardized legal framework to guarantee standards and compliance with Sharia finance provisions. PHOTO | FILE
What you need to know:
Treasury PS Kamau Thugge says move will help in facilitating the growth of Sharia compliant finance in Kenya.
Kenya is in the process of establishing a regulatory framework to ensure uniformity and compliance of Islamic financial products with global standards.
Speaking at the 6th Global Islamic Microfinance Forum Tuesday, a representative of Treasury Principal Secretary Kamau Thugge said the Ministry of Foreign Affairs is seeking to join the Islamic Development Bank - an international Islamic financial institution - on Kenya's behalf while the Capital Markets Authority (CMA) has applied to become a member of the Islamic Financial Services Board (IFSB).
“The National Treasury is in the process of developing and operationalising the institutional and regulatory environment that will help in facilitating the growth of Sharia compliant finance in Kenya,” a statement from Mr Thugge read.
Currently, the country does not have a standardised legal framework to guarantee standards and compliance with Islamic finance provisions.
Last month, an Islamic Finance Project Management Office (PMO) was launched with the mandate of coming up with proposals on policy, tax, legal and regulatory framework as well as how reforms can be designed and implemented to ensure rapid growth of the sector in the country.
The government said that with assistance from development partners, it will develop a critical mass of expertise to work in the Islamic finance industry.
The Kenya Islamic finance market has already witnessed substantial growth over the past few years with several key financial sector institutions adopting Islamic products.
