Good Morning, Salaam Aleikum,
It is a great pleasure for me to join you this morning on this important occasion as you officially launch KCB Shari’ah Banking in the market. I wish to express my sincere appreciation for the invitation to this important occasion which I believe is a positive step towards the transformation of the Banking industry in Kenya which has experienced exponential growth over the past decade.
The entry of Islamic banking institutions in the country is an initiative that my ministry has been advocating for and encouraging industry players to venture into it, because of the enormous potential that this form of banking holds for our economy. I am glad that more conventional banks are following this path to enable formerly unbanked Kenyans, specifically those in the Muslim community and rural areas, to access financial services that support their religious faith.
Ladies and Gentlemen;
As you may be aware, Kenya and the East African Region has increasingly become an attractive destination for investments from various economic players who want to tap in to the Islamic Banking portfolio. With our sound economic base, the future can only be bright for investors who wish to invest in this area of banking.
Kenya’s economic blueprint Vision 2030 envisions Kenya as a premier financial services hub in the region with a wide range of competitive products and services. One of the ways of achieving this goal is ensuring that Kenya becomes the gateway for Shariah-compliant financing, through establishment of an enabling environment that supports the development of Shariah-compliant financial services and products.
This can only be achieved when industry stakeholders come together to address some of the challenges that Islamic Banking faces which include inadequate qualified personnel who have knowledge on Shariah Banking and inadequate Islamic Banking products to serve the interests of the different customers. The onus therefore is on us to look at ways in which we can address these concerns progressively and in a comprehensive manner.
Ladies and Gentlemen;
The government is in the final stages of issuing its debut sukuk component of infrastructure bonds which we see as being an important tool through which we shall be able to raise cash to fund our development projects. We are also putting in place prudent Islamic Banking guidelines that will guide the operations of Islamic financing in the country. We shall continue to support the Islamic banking framework for conducting financial transactions which we believe has the potential to change the overall economic outlook for the country.
Globally, the Islamic finance market is growing. Islamic finance investments are now worth $1.6 trillion and are forecast to increase to $2.5 trillion by 2015. I am happy to note that in Kenya, Shariah-compliant products, command a market share of 2 per cent of the banking sector with most Kenyans now taking up these products. It follows therefore that institutions providing Islamic banking products need to come up with products tailor-made to suit the need of their customers. This is in line with our development goals to ensure accelerated and inclusive economic growth for all Kenyans.
In conclusion I wish to reiterate my Ministry’s willingness to work with all stakeholders to create an enabling environment for the successful operations of Shariah banking in the country. I congratulate KCB Board and management for spearheading this initiative and also the Sharia Advisory Board for supporting the Bank in its implementation.
With those remarks, it is now my humble duty to declare KCB Sahal Banking officially launched.