Diese Präsentation wurde erfolgreich gemeldet.
Wir verwenden Ihre LinkedIn Profilangaben und Informationen zu Ihren Aktivitäten, um Anzeigen zu personalisieren und Ihnen relevantere Inhalte anzuzeigen. Sie können Ihre Anzeigeneinstellungen jederzeit ändern.

IFN guide 73 Kenya's emerging landscape of Islamic Finance

45 Aufrufe

Veröffentlicht am

Kenya a regional hub of Finance embraces Islamic Finance. A frontier market with immense potential and oppourtunites

Veröffentlicht in: Wirtschaft & Finanzen
  • Als Erste(r) kommentieren

  • Gehören Sie zu den Ersten, denen das gefällt!

IFN guide 73 Kenya's emerging landscape of Islamic Finance

  1. 1. December 2017 73 country report Mohamed Ebrahim is a partner at Ace Associates, a member firm of McMillan Woods Global. He can be contacted at mebrahim@acegroup.co.ke. Kenya is the latest African country to hop onto the bandwagon of countries wishing to issue Sukuk and create a regional hub for Islamic financial services. With this in mind, an Islamic Finance Project Management Office (PMO) has been set up in December 2015which encompasses the Capital Markets Authority and other financial services regulators. The PMO is overseen by the National Treasury with technical and financial assistance from Financial Sector Deepening Africa and under the mandate delegated to it by Kenya’s Financial Sector Regulators Forum. The PMO is led by Islamic Finance Advisory and Assurance Services, an international consultancy firm specializing in Islamic finance, in collaboration with international law firm Simmons & Simmons. This development is due to Kenya’s thrust to become an international financial services hub by setting up the Nairobi International Financial Center. Furthermore, Nairobi Securities Exchange and NASDAQ Dubai have signed an MoU to collaborate in establishing a Sukuk market in Kenya. Through the MoU, both parties will work together to assist Kenyan entities including the government, private businesses and government-related firms in issuing and listing Sukuk. According to a joint statement, the two exchanges will also jointly promote Islamic capital market products and exchange information and experiences. Review of 2017 The Capital Markets Authority (CMA) of Kenya has been admitted by the Council of the IFSB as an associate member of the board. This will give the capital markets regulator the capacity and capability to regulate the growing Islamic finance market, which has great potential due to a significant Muslim population in certain areas of the country. Currently, Kenya has three fully-fledged Islamic banks – First Community Bank (FCB), Gulf African Bank and DIB Kenya, a subsidiary of Dubai Islamic Bank – plus five conventional banks offering Islamic windows; one full insurance company (Takaful of Africa); two credit unions/savings and credit cooperatives; one Takaful company; one re-Takaful window; one capital market unit trust fund as of June 2017 and one non-deposit taking micro- finance institution (Hazina Development Trust). All of these are still very small compared to the potential. In terms of the broader Islamic financial services market, the Central Bank of Kenya has to date licensed two Islamic banks: Gulf African Bank and FCB, while various other banks are offering Shariah compliant services and products through Islamic windows. Similarly, FCB has been authorized to act as an Islamic insurance (Takaful) broker for General Takaful products. In addition, Takaful Insurance of Africa, the first fully Shariah compliant insurance company in Kenya, was launched in January 2011. In 2014, the launch of the first re- Takaful insurance (Islamic reinsurance) is expected as Kenya Reinsurance Corporation ventures into Shariah compliant business. The local reinsurer already has a presence in West Africa and Middle East markets and hence has the potential to provide a regional platform for this product. Amendments to Finance Act No 15 of 2017 The Finance Act No 15 of 2017 paves the way for the taxation and regulatory harmonization of Islamic finance with conventional finance by leveling the playing field that is expected to spur the issuance of sovereign Sukuk by the government of Kenya, the pricing of which is important as it will be the benchmark (risk-free) cost of finance for the issuance of Sukuk by county governments and corporates. This involved amendments to the Income Tax Act, Value-Added Tax Act, Public Financial Management Act (paving the way for the issuance of sovereign and sub-sovereign Sukuk) and Stamp Duty Act. Preview of 2018 With a vision themed ‘The heart of African capital markets’, the Capital Markets Master Plan envisions that the Kenyan capital markets will become sufficiently deep and dynamic to stimulate domestic development, while simultaneously providing a gateway to Middle Africa for regional and international capital flows. By 2023, it is expected that Kenya will have been transformed into the choice market for domestic, regional and international issuers and investors looking to invest and realize their investments in Kenya, within East Africa and across Middle Africa. The market will be the center of excellence for the real sectors of the economy in which Kenya already has significant capacity and potential, including agriculture, infrastructure (including real estate) and technology, while also leveraging the strength of Kenya’s financial sector to develop innovative products and services, including derivatives, asset management and Islamic finance. In the capital markets, the CMA has also licensed FCB Capital, which offers Islamic asset management services. In addition, Genghis Capital has been approved to operate an Islamic collective investment scheme. The CMA has also introduced new regulations relating to REITs and these regulations provide for the creation of Shariah compliant REITs. These developments have enabled the formerly unbanked Kenyans and specifically the Muslim communities in the country to have access to financial services, adding to wealth creation in the economy. However, to develop a center of excellence in Islamic financial products underpinned by a formal framework, a concerted program of regulatory reform and recognition as well as broader capacity-building will have to be undertaken so that Islamic financial services become a sector in their own right capable of attracting international business. To achieve this outcome, the following actions should be taken: • Create a regulatory framework for Islamic capital markets • Develop a separate policy, legislative and regulatory framework for Islamic products and services • Leverage existing relationships to develop Islamic finance expertise, and • Identify and make policy proposals to facilitate the development of Islamic finance in the annual Memorandum of Policy proposals to the National Treasury and implement programs through industry coordination and relevant partnerships. Conclusion These changes have significantly changed the landscape of Islamic financial services in Kenya and it is our hope that the Kenyan public will benefit from them and they are implemented well by professional service providers. Kenya’s emerging landscape of Islamic finance KENYA