Home ECONOMY CMA , KNBS Release Islamic Finance Report

CMA , KNBS Release Islamic Finance Report

by biasharadigest

The Capital Markets Authority in collaboration with the Kenya National Bureau of Statistics recently released a report on Islamic/Participatory finance. The report which establishes findings from a survey targeting respondents from sectors including banking, Insurance, Cooperatives, pension funds, capital markets and others, was designed to gain insight into stakeholders’ perception of Islamic/Participatory capital markets products & services.

Participatory Finance is a rapidly growing system of finance that encompasses common ethical principles that among other things prohibit charging of interest and speculation while encouraging mutual risk sharing

Major Islamic/Participatory finance products include :

  1. Murabaha (cost plus profit) – A financing structure in which the seller provides the cost and profit margin of an asset.
  2. Musharakah – partnership.
  3. Mudarabah – a form of business contract in which a party brings capital while the other provides personal effort.
  4. Islamic Funds
  5. Shariah Auditors.
  6. Ijarah – lease agreement.
  7. Takaful – Insurance.
  8. Sukuk – financial certificates commonly related to bonds.

In order to enhance growth of Islamic/Participatory finance, the report proposes :

  1. increase in public awareness through public participation forums.
  2. Marketing of the products & services to improve on brand visibility.
  3. Strengthening of regulatory and legal framework.
  4. Aligning of policy frameworks with the Islamic shariah concept and principles.
  5. Establishment of a central shariah board.

Latest 2018 statistics show that the global islamic finance industry grew by 11% in 2017 to reach US$ 2.4 trillion in assets compared to 2016 with growth expected to reach US$3.8 trillion by 2023.

In the strategic plan 2018/2023 the Capital Markets authority is set to facilitate issuance of Islamic capital markets products in an effort to facilitate the development, diversification and uptake of capital markets products and services.

See Also:

Gulf African Bank Receives Best Islamic Bank in Kenya 2017 Award

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