Policy Dialogue on Deepening Islamic Finance in Kenya
Kenya has over the years witnessed the steady growth of Islamic finance, especially in the banking sector, insurance and in Savings and Credit Cooperatives Societies (Saccos).
To further understand Islamic finance, its principles and contribution to the national development goals, KIPPRA hosted a policy dialogue encompassing players in the banking industry, the Capital Markets Authority, insurance industry, Saccos and the National Treasury. The enlightening discussions took place at Fairview Hotel on 7th September, 2017.
KIPPRA Executive Director Dr Rose Ngugi acknowledged all the institutions represented at the forum and welcomed all participants, noting that the forum would contribute to policy debate on financial inclusion. Dr Ngugi highlighted the growth of Islamic finance in Kenya, various developments in the country’s financial sector as well as issues of concern and challenges affecting Islamic finance.
To shed more light on Islamic finance industry in Kenya was KIPPRA Policy Analyst Mr Adan Shibia. He highlighted its foundation, history, principles and role in Kenya’s development agenda.
Speaking on regulatory and risk management for Islamic finance, Mr Jared Osoro from the Kenya Bankers Association said the Kenyan financial system is largely bank-led, explaining the dominance of Islamic banking in Islamic finance.
Dr David Wanyama discussed the concept of Takaful insurance in Kenya while Mr Justus Agoti from the Capital Markets Authority underscored the importance of understanding Shari’ah principles in ensuring capital market products are compliant. Mr Jeremiah Were from the Sacco Societies Regulatory Authority (Sasra) highlighted the Islamic finance products offered by Saccos as well as the challenges facing their growth.
The last two presenters, Mr. Gachanja Samuel and Mr. Dunstone Ulwodi from the National Treasury focused on the Sukuk market as an alternative source of development financing. They defined the Sukuk concept, the importance of complying with Shari’ah principles and the process of issuing a Sukuk.
The presentations were followed by a lively discussion and deliberations on various issues in relation to Islamic finance. The two sessions were moderated by KIPPRA Policy Analyst Anne Gitonga.
The closing comments and summary of key issues discussed were presented by the acting head of the KIPPRA Private Sector Development Division Mr Moses Njenga