The launch paves the way for the full roll-out of Sharia’h compliant products under the proposition dubbed “KCB Sahl Banking”, after getting all the necessary regulatory approvals.
KCB Group Chairman Mr. Ngeny Biwott said the launch is part of the Bank’s long term vision to diversify its product offering while riding on technology as it reaches out to more citizens across East African and beyond who feel left out by the conventional banking system.
“This chapter is a milestone for our financial inclusion and deepening agenda for the banking and financial services sector to be accessed by everyone in the region,” said Mr. Biwott. “Looking ahead into the next three years, this 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.
The KCB Sahl Banking (easy banking) roll out 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.
The KCB Group Chief Executive Joshua Oigara said that with everything in place, the Bank is ready to revolutionize the Islamic Banking space in the country.
“As a Bank, we are continuously looking for ways in which we can offer the best services to our customers. This is the reason why we are constantly innovating our products so that they meet their financial needs. The offering we are launching today is a Shariah compliant bank account designed to address the sensitivities of this group of customers”, said Mr Oigara.
The Islamic form of banking which targets both Muslims and non-Muslims has continued to gain traction globally with latest statistics from the 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, Sharia’h banking products account for 2 percent share of the market share in Kenya.
Speaking during the launch, Cabinet Secretary National Treasury, Henry Rotich said that the government will continually review the Banking Act and Prudential Guidelines to reflect this new reality as is the case in South Africa, Europe, the United States, Canada, the Middle East, and Australia.
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 Hurlingham 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.
The Bank has so far created various asset and liability products under the Sahl Banking proposition among them Mudharaba, Qard Hassan, Wadia, Murabhaha, Musharaka and ijara.
