Bank to launch more Islamic services

Kenya could soon have Sharia compliant bonds if proposals being prepared by the First Community Bank are accepted by the regulator.

“We are preparing proposals to be taken to the Central Bank of Kenya on introduction of Sharia bonds and we hope they will be in the market soon,” the bank’s chief executive officer, Mr Nathif Adam announced on Thursday.

He said the bank would also consider introducing Sharia compliant insurance (Takafol) in the future. Speaking during a seminar on Islamic banking organised by the Institute of Certified Public Accountants of Kenya, Mr Adam said the bonds called Sukuk, were among services the bank intended to introduce in the country.

He said First Community Bank has been overwhelmed by the number of clients who have opened accounts with the bank since it started operations about a month ago. Among them, he said, were religious organisations adding that so far, non-muslims constitute about 50 per cent of the accounts opened.

Mr Adam said it was impressive that Kenya was the first in east and central Africa to allow the establishment of Islamic banks, which are growing rapidly in other parts of the world.

Central Bank has also licensed Gulf African Bank along the same lines with a number of conventional banks introducing Sharia compliant products. Islamic Banks prohibit charging of interest, which they refer to as usury.

Tanzania and Uganda, Mr Adam said, had also showed interest in Islamic banks. The chief executive said First Community will officially open a new branch in Mombasa on Saturday to increase their branch network to three.

The other two are operating in Nairobi. “We intend to have not less than 17 branches in our second year of operation,” Mr Adam said.

Among those present during the seminar were commercial banks, savings and credit societies and power generating and telecommunications firms.