The Capital Markets Authority is working to set up rules and regulations that will allow development of Shariah-compliant products.Speaking during the unveiling of a new name by ApexAfrica Investment Bank to ApexAfrica Capital, CMA chief executive Stella Kilonzo, said her team has already visited Mauritius to study how Shariah-based investment products are operated and regulated.
“There is a lot of potential for Shariah-based investment products and we will work together to develop them,” said Ms Kilonzo in appreciation of announcement of the intention by ApexAfrica Capital to launch such products.
During this year’s budget speech, Finance minister Uhuru Kenyatta urged the market regulators, CMA and Central Bank, to introduce Shariah-compliant products as a way of offering Muslims investment options.
By religion Muslims are prohibited from investing in interest earning products in preference for profit sharing.
They are also forbidden from investing in alcohol and gambling industry.
Speaking at the event, ApexAfrica managing director Kassim Bharadia said his company has developed Shariah products and was in process of launching them once the regulatory mechanism is in place.
“Demand for Shariah-based products in financial services is growing, we now have Shariah banking, and Shariah insurance products have also been developed. The area that is lagging is Shariah-based investments products, a business in which ApexAfrica Capital has planned products,” said Mr Bharadia.
Earlier in the year Central Bank of Kenya launched a Shariah-compliant bond during the second infrastructure bond to raise money for construction of roads, water and sewerage systems.
“We see Shariah investment products as an area with great promise, we have not only seen local interest but we have attracted a lot of interest from international organisations,” he said.