October 14, 2016 / 9:17 AM / 9 months ago

Kenya sets up body to manage push into Islamic finance

2 Min Read

NAIROBI, Oct 14 (Reuters) - Kenya launched an office dedicated to oversee its fledgling Islamic finance industry and help prepare for the issue a debut sovereign shariah-compliant bond, known as a sukuk.

With the government estimating that 11 percent of the population is Muslim, Kenya has seen the emergence of Islamic institutions in recent years, including two banks, five Islamic banking windows offered by commercial lenders, insurance firms and a unit trust fund.

The government in the East African nation wants to build up the industry as part of a long-term plan to turn Nairobi into an International Financial Centre.

"We have a real opportunity to attract local investment and capital inflows both from Muslim and non-Muslim locally and internationally," Kamau Thugge, the principal secretary at the Treasury, said in a statement.

The statement called the new body the Islamic Finance Project Management Office.

Finance that complies with Islamic sharia law shuns payment of interest rate in favour of sharing profit.

Kenya, which has applied to become a member of the Islamic Financial Services board, is carrying out legal and policy reforms to facilitate the growth of the industry.

"After the implementation of these reforms, among other things, the government will consider issuing a sovereign Sukuk," Thugge said. (Reporting by Duncan Miriri)

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