Speaking on the sidelines of this week's East Africa Islamic Finance Summit in Nairobi, Mr Muigai confirmed that Kenya will review the entire legal and regulatory framework surrounding its nascent Islamic finance industry to help facilitate the issuance of the country's debut sukuk in the 2016/2017 financial year. Kenya is joining a host of African countries who are changing their laws in order to expand their finance options by opening their doors to burgeoning investment and trade flows from the Middle East. Mr Muigai has said that, with the reforms, Kenya hopes to position itself as East Africa's Islamic finance hub. 'We realise the significance of this market and that is why we need to tap it and tap it fast,' he said.
Widespread reform needed
Though Kenya already boasts two Shariah-compliant banks, lawyer Mona Doshi of Kenyan law firm Anjarwalla and Khanna confirmed that widespread legal and regulatory reform is needed if the Islamic finance industry is to flourish in Kenya. 'The current legal framework isn't conducive,' she said. 'Though adjustments have been made for the special nature of Islamic banks, the basic framework is the same as [for] conventional banks.' Islamic finance tailors financial products and services for investors wishing to avoid activities considered usury under Shariah law, including receiving direct payment or earning interest. Sources: The Journal of Turkish Weekly; Reuters; Citizen TV