The Capital Market Authority (CMA) of Kenya is intensifying its efforts to develop its Islamic financial capital market. Through its engagement with its Islamic finance focused stakeholders, the CMA has identified the key focus areas of; broad market education; tax harmonization and the formulation of policy and legal frameworks to help accelerate the growth of such capital markets products.
Stella Kilonzo, the chief executive of the CMA, further challenged Kenya’s Islamic finance institutions to work with the CMA and the joint financial sector regulators in Kenya towards the establishment of a fully fledged single Shariah advisory council to enhance the consistent application of Shariah rulings and product authenticity across the Kenyan financial landscape.
As part of its market development role, Kilonzo further stressed that the CMA will continue to encourage stakeholders in Islamic finance to explore opportunities available to them in the collective investment vehicle space. She added that Islamic finance and the ethical products market offer a key opportunity for growth for the Kenyan capital market and its financial institutions.
To back up this assertion, First Community Bank took the opportunity to launch Kenya’s first and only fully fledged Shariah compliant investment bank, FCB Capital. Through their First Ethical Opportunities Fund, FCB Capital became the first Kenyan Islamic financial institution to tap the collective investment vehicle market.
The government of Kenya continues to pursue policies that create an enabling environment for Islamic financial products and the Shariah compliant banking sector is being prioritized as a means of promoting greater financial inclusion across the country.
There remains a dearth of Shariah compliant investment products in the country required to create a tangible Islamic capital market with unit trusts, corporate and sovereign Sukuk, Takaful products and Shariah compliant treasury bills, all necessary requirements.
However, it is encouraging to note the ongoing efforts by the Central Bank of Kenya, the CMA and the Insurance Regulatory Authority in supporting the industry players to come up with ways to resolve the issues and to broaden the range of Islamic products in the country.
source: Islamic Finance News