In a quest to tap into the growing demand for Islamic financial products across the East African region, KCB has today launched its Islamic Banking Unit dubbed ‘KCB Sahl Banking’, after getting all the necessary regulatory approvals.
The rollout is part of the bank’s long term vision to diversify its products offering while riding on technology as it reaches out to more citizens across East Africa and beyond who feel left out by the conventional banking system.
The KCB Sahl Banking launch aims to provide Shariah compliant banking product that prohibits the giving or receiving of interest and ensures that money is invested ethically in accordance with the Islamic faith.
For a start, KCB will roll out the Islamic Banking products in six of its branches as ahead of a national roll-out. The branches are KCB Eastleigh, Kimathi Street and Hurlinghan in Nairobi; Mwembe Tayari and Town Centre in Mombasa; Garissa and Wajir in North Eastern and Lamu. These satellite branches will serve as an operating model as the Bank seeks to enhance quality growth to create sustainable shareholder value.
Islamic form of banking targeting both Muslims and Non-Muslims continues to gain traction globally with the latest statistics from World Bank indicating that global Shariah compliant financial assets have increased significantly over the past three decades, reaching about US$1 trillion in 2010 up from about US$5 billion in the late 1980s.
It is expected that Islamic banking assets will grow at a 19.7 per cent over 2013-2018 to reach US$1.6 trillion by 2018. Currently, Shariah banking products account for 2 percent 0f the market share in Kenya.
Thus far, KCB has created various asset and liability products under the Sahl Banking proposition among them Mudharaba, Qard Hassan, Wadia, Murabhaha, Musharaka and Ijara. The bank has also expressed anticipation in the next three years hoping the product will progressively facilitate development in the marginalized areas and deepen financial coverage.
In addition to the Kenyan operation, KCB Bank Tanzania is offering Islamic Banking services which is well supported with the regulatory framework that is in place.