Kenya's first Islamic re-insurance product to be launched this year
The first Islamic re-insurance product in Kenya will be launched by the Kenya Reinsurance Corporation in 2014, the Capital Market Authority (CMA) announced last week.The first Islamic re-insurance product in Kenya will be launched by the Kenya Reinsurance Corporation in 2014, the Capital Market Authority (CMA) announced last week.
"The market for Islamic financial services is still nascent in Kenya", the regulatory body said in its new master plan, but added that "given the country's geographical position, sizeable Muslim population, and infrastructure funding needs, there is great potential to develop a centre of excellence in Islamic financial products in the country and for the region."
It called for the creation of a regulatory framework for Islamic capital markets focusing on corporate governance, disclosures, a policyholder compensation fund and responsible pricing, The Star reports.
The CMA has in addition proposed the development of a separate policy, legislative and regulatory framework for Islamic products and services covering Islamic financial institutions, financial regulators, Islamic groups and the Ministry of Finance.
Kenya's large Muslim community and the growing demand for Islamic finance is forcing financial institutions to evolve and adapt in order to take advantage of this market.
Since the introduction of Islamic finance in the country in 2008, two Islamic banks (providing only Sharia-compliant products) were created, and many commercial banks and insurance companies now offer Islamic finance and insurance products, called Takaful.
Global Head of Islamic Banking at Standard Chartered Wasim Saifi told Ghana Business News in November that he believes this sector could reach 10 percent of bank assets in the near future in five or six countries in sub-Saharan Africa, particularly Kenya and Nigeria.