Source: Islam in Africa Newsletter, Volume 1 (2006), Number 2 (June 2006)
The Kenyan government will allow financial institutions to offer Islamic banking services that charge no interest. It is the first time the government has made credit access possible for those who have been left out of the financial services because of their faith. The first Islamic bank in Kenya will open its doors to the public in September 2006. The bank will give a wide range of Shari'ah-compliant banking services once it is operational. The bank will conduct its activities in a purely Islamic mode, which includes a stipulation that money must be invested ethically and that the giving or receiving of interest is forbidden. A Shari’ah supervisory body of scholars from the Middle East will partner with local counterparts to supervise the bank's activity.
Among the wide range of products expected to be tailor-made for Muslims will be interest-free banking services, mortgages, car financing as well as health financing schemes. However, the bank will not invest in businesses that are deemed "unethical', such as tobacco, gambling, alcohol and pornography.
In the first year of operations the bank will open branches in Nairobi and Mombassa, growing these to 14 in the next four years, targeting Muslim-dominated areas such as Malindi, Lamu, Wajir, Garissa and Mandera. The bank will also provide services to non-Muslims wishing to try the Islamic banking system.
A precursor to the Islamic bank was launched on December 21, 2005, when Barclays became the first bank to launch Islamic banking products to meet the discerning needs of its thousands of customers in Kenya. The bank launched La Riba Current Account, an interest-free bank account, designed to address the sensitivities of customers who adhere to the Muslim faith, which forbids the earning or payment of interest.
With the establishment of the Islamic financial institution, Kenya will join other African countries such as South Africa, Sudan, Egypt, Senegal and Nigeria, where the concept is already being implemented.
The Kenyan government will allow financial institutions to offer Islamic banking services that charge no interest. It is the first time the government has made credit access possible for those who have been left out of the financial services because of their faith. The first Islamic bank in Kenya will open its doors to the public in September 2006. The bank will give a wide range of Shari'ah-compliant banking services once it is operational. The bank will conduct its activities in a purely Islamic mode, which includes a stipulation that money must be invested ethically and that the giving or receiving of interest is forbidden. A Shari’ah supervisory body of scholars from the Middle East will partner with local counterparts to supervise the bank's activity.
Among the wide range of products expected to be tailor-made for Muslims will be interest-free banking services, mortgages, car financing as well as health financing schemes. However, the bank will not invest in businesses that are deemed "unethical', such as tobacco, gambling, alcohol and pornography.
In the first year of operations the bank will open branches in Nairobi and Mombassa, growing these to 14 in the next four years, targeting Muslim-dominated areas such as Malindi, Lamu, Wajir, Garissa and Mandera. The bank will also provide services to non-Muslims wishing to try the Islamic banking system.
A precursor to the Islamic bank was launched on December 21, 2005, when Barclays became the first bank to launch Islamic banking products to meet the discerning needs of its thousands of customers in Kenya. The bank launched La Riba Current Account, an interest-free bank account, designed to address the sensitivities of customers who adhere to the Muslim faith, which forbids the earning or payment of interest.
With the establishment of the Islamic financial institution, Kenya will join other African countries such as South Africa, Sudan, Egypt, Senegal and Nigeria, where the concept is already being implemented.
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