CMA hosts Islamic Finance Roundtable
Ms Rahma Hersi (Managing Partner-Awal Consulting-Left), Mr Yahya Aleem Rehman (Division Manager, Advisory services-Islamic Research and Training Institute-Centre) and Mr Paul Muthaura (Acting Chief Executive Capital Markets Authority-Right) during the Islamic Finance Strategic Roundtable organized by the Capital Markets Authority in collaboration with Awal Consulting and the Islamic Research & Training Institute, a member of the Islamic Development Bank, as well as the Malaysia International Islamic Financial Centre, 9-10 December 2014, at the Tribe Hotel in Nairobi.
Nairobi December 9, 2014…As part of the drive to unlock the potential of Shariah compliant investment to support infrastructure financing, the Capital Markets Authority (CMA) in collaboration with Awal Consulting Ltd and The Islamic Research & Training Institute (IRTI), a member of the Islamic Development Bank as well as the Malaysia International Islamic Financial Centre (MIFC), will today convene an Islamic Finance Strategic Roundtable.
Globally, the Islamic financial sector is a $2 trillion industry based on Islamic principles that discourage interest, speculation and empathize ethical investment.
The roundtable brings together stakeholders from the financial sector, Islamic financial services industry, government agencies and international experts to deliberate the development of Kenya as a centre of excellence in Islamic financial products. The Islamic finance strategic roundtable is intended to make recommendations and develop a plan of action towards developing a formal Islamic finance framework, a concerted program of regulatory reform, recognition and capacity building that will enable Shariah compliant financial services to respond to the investment diversification as well as funding needs of the economy. The development of a formal Shariah compliant financial sector will create a gateway for regional and international capital flows into the country with a particular focus on infrastructure project funding.
The Capital Markets Industry prioritized the development of Kenya as a centre of excellence in Islamic finance as a key priority under the Capital Markets Master Plan, the capital markets industry 10-year blueprint for the transformation of Kenya into the heart of capital markets investment on the continent. The roundtable, with the guidance of Shariah experts from Malaysia, which is the largest Islamic Financing Hub in the world, is expected to identify and refine policy proposals for the consideration of the National Treasury. The CMA Acting Chief Executive, Mr. Paul Muthaura, observed that the roundtable is part of the Authority’s strategy of leveraging relationships with regulators and financial market infrastructure providers to support the development of the sector.
Mr. Muthaura noted, ‘‘in the context of the recent announcement by the Government of Kenya that it will be seeking to issue its first Sovereign Sukuk in the near future, it is critical that the domestic financial markets are effectively prepared to leverage the opportunities arising from that increased visibility by providing a wider diversity of products to attract local, regional and global funds seeking ethical or Shariah compliant investments through the development of a globally competitive policy, legal and regulatory framework.”
Development of Islamic finance in Kenya over the last five years has been notable, with the licensing of two Islamic banks by Central Bank of Kenya, licensing of Islamic insurance (Takaful) company, registration of an Islamic Collective Investment Scheme, licensing of an Islamic asset manager, and the introduction of a Shariah component in the REITs regulations.
The roundtable is also expected to discuss the establishment of a national Shariah advisory board and the road map for the recognition of Islamic finance in the International Financial Reporting Standards.
