Capital Markets Authority Greenlights Kenya’s Inaugural Sukuk Bond

Nairobi, 20 September 2023… In a groundbreaking development for Kenya’s capital markets landscape,
the Capital Markets Authority (CMA) has granted approval for the issuance of the country’s first-ever Sukuk
Bond (“Sukuk”). Linzi Finco Trust, the Issuer of this pioneering Sukuk, named Linzi Sukuk that offers an
internal return of return at 11.13%, is set to raise KSh. 3 billion with the primary aim of developing 3,069
institutional housing units, in alignment with the Government’s ambitious Transformative Agenda.
Sukuk, also known as Islamic bonds, are financial instruments that comply with the Shari’ah principles,
making them a unique and inclusive investment avenue. This momentous approval by the CMA marks a
significant milestone in Kenya’s capital market diversification, providing both investors with an alternative,
socially responsible investment opportunity.
The issuance of the Linzi Sukuk bond underscores Kenya’s commitment to addressing the pressing need
for affordable housing through the provision of affordable financing, a pivotal component of the
Government’s transformative agenda. The Housing demand in Kenya is estimated at 250,000 units
annually. With a supply of only 50,000 new houses annually, there is an 80 per cent annual housing deficit.
The Government has a plan to deliver 200,000 housing units annually through collaboration between the
national government, counties and the private sector. To this end, there has been at least three projects
launched in the past three months, with 7,800 units in the offing.
This landmark Sukuk will contribute significantly to expanding the availability of affordable housing and
positively impact the lives of many Kenyan citizens. This innovative financing mechanism is expected to
attract both domestic and international investors seeking ethical and socially responsible investment
options.
The CEO, Mr. Wyckliffe Shamiah stated, “We are thrilled to embark on this pioneering journey with the
issuance of the first Sukuk bond. This financial initiative represents not only a new investment opportunity
but also a significant step towards addressing the housing deficit in Kenya and supporting the
Government’s transformative agenda.”
The Sukuk bond issuance is anticipated to set a precedent for further innovative capital markets
instruments in Kenya, demonstrating the Authority’s commitment to economic growth and development.
It also signifies CMA’s dedication to fostering an inclusive and diverse capital markets market that caters
to a broader spectrum of investors.
ENDS
BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY
The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets
Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair,
and efficient capital markets in Kenya with the view to promoting market integrity and investor
confidence. CMA also regulates the structured commodity markets and online forex trading. The
regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and
supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory
framework by all market participants; Regulating public offers of securities, such as equities and bonds &
the issuance of other capital market products such as collective investment schemes; Promoting market
development through research on new products and services; Reviewing the legal framework to respond
to market dynamics; Promoting investor education and public awareness; and Protecting investors’
interest. For more information, please contact: Antony Mwangi, Manager Corporate Affairs &
International Relations on amwangi@cma.or.ke