NAIROBI, Kenya – The Islamic Development Finance Corporation [IDFC] predicts that global Islamic finance assets could reach $3.8-trillion by 2024, up from the current $2.7-trillion.
This kind of projection has driven the demand for sharia complaints products across the continent.
IDFC research also reveals that Muslims in Africa are gaining access to credit and insurance as conventional lenders and underwriters are joined by their sharia-compliant counterparts offering Islamic banking products and services.
East African region is among the areas where the demand for Islamic products. Kenya Commercial Bank Tanzania is the latest player within the financial sector to embrace Islamic products.
The lender has floated its first Islamic bond worth $4.4 million aimed at funding its Sahl banking asset portfolio. The Sharia-compliant paper was opened on November 9 and closes on December 5.
According to Cosmas Kimaro-Managing Director -KCB Tanzania, “KCB Fursa Sukuk will provide opportunities for Tanzanian and non-Tanzanian individuals, retailers, corporations and institutions to invest in the capital markets for three years at an expected return of 8.75 percent per annum, quarterly.”
Those interested can invest as little as $ 218.KCB Tanzania plans to list the paper at the Dar es Salaam Stock Exchange once the completion of Initial Public Offer process is.
The lender now joins the league of NMB Bank and the National Bank of Commerce in offering bonds this year.
NMB floated an $11 million Jasiri bond targeting women enterprises while NBC’s Twiga bond targeting to raise $131 million for funding SMEs across Tanzania.
The rise of demand for non-Muslims within the East Africa region market for interest-free Islamic banking services has been driven by a mix of high-interest rates and poor banking facilities.
Fintech is also another driver for the high uptake of Islamic products in the EAC region.
The high smartphone and internet penetration in the Sub-Sahara African region has facilitated bringing credit and insurance closer to the underserved Muslim group.
Growth of Islamic products in Africa
Earlier this year, East African biggest telco-Safaricom plc inked a deal with Gulf African Bank (GAB) that unveiled the Sanctified Pesa Halal – telco market’s first Shariah-compliant mobile financing service amid a growing need for digital financial inclusion.
Sanctified Pesa Halal is a financial mode of saving that helps Muslim and non-Muslim customers alike access micro-savings and investment solutions that adhere to Islamic laws on earning halal (permissible) profits.
GAB’s CEO- Abdalla Abdulkhalik, “Our strategy is focused on digitization for financial inclusion. Our aim is to provide instantaneous access to interest-free credit through Halal Pesa.”
The Safaricom and GAB move comes years after Kenya’s biggest bank by assets, the Kenya Commercial Bank launched an Islamic banking unit dubbed “KCB Sahl banking.”
In South Africa, Islamic banking — which had a bumpy start in 1980 due to apartheid and general ignorance — is witnessing a steady rise in adoption thanks to investment from the Gulf.
In late 2014 the country’s treasury issued a record $500-million Sukuk (Islamic bond) — a first — hoping to tap into funding from Gulf Arab and Southeast Asian liquid capital markets to revamp the country’s ports, roads, hospitals, and schools.
The Banking Association of South Africa’s figures now show deposits in South Africa’s halal banking top $ 2 billion and advances amounting to $ 824 million.
According to Fitch Ratings, the Islamic-finance industry in Nigeria is expected to continue its moderate growth trajectory in 2022-2023.
“Growth will be driven by top-down government support for the sector, Sukuk issuance by the federal government, asset growth by newly-established Islamic banks and enabling regulations,” it said in its January rating.
Sharia banking has also continued to enjoy moderate growth in Ethiopia since 2008 when its conservative central bank authorized interest-free banking.
GAROWE ONLINE
Advertise with GaroweOnline and expose your brand to a global audience of loyal visitors from across the world
Videos
29-11-2020
Videos
16-11-2020
Videos
01-11-2020
Videos
23-10-2020
The head of state also revealed that his administration is working to ensure that 80 percent of all government services shifted online.
Business
10-11-2022
It added that the overall deficit on a cash basis declined from 8.2 percent of GDP in FY2020-2021 to 6.2 percent of GDP in FY2021-2022.
Business
09-11-2022
Business
07-11-2022
Business
06-11-2022
Business
06-11-2022
Business
05-11-2022
Copyright © GAROWONLINE All Rights Reserved
Advertise with GaroweOnline and expose your brand to a global audience of loyal visitors from across the world
To manage your cookie choices now, including how to opt out where our partners rely on legitimate interests to use your information.
