Why there is slow uptake of Islamic banking in Kenya
INNOVATION: Traditional norms and cultural practices are still holding back the drive for more innovation in the Islamic banking sector in Kenya, experts says.
Islamic Finance lawyer and advocate for economic justice in Africa, Rahma Hersi, says one distinct factor of Islamic finance is that there are restricted investments.
“One cannot go contrary to Islamic finance principles. Another thing that makes Islamic finance unique is the concept of risk and reward sharing which is different from conventional finance,” she added.
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Hersi spoke during the Kenya Diaspora Mapping Study Report Validation Workshop that was convened by Pangea Trust as a way of a creating a platform to revolutionise startup and SME funding by providing an opportunity to the diaspora to become a key players in the ecosystem. The engagements sought to find avenues through which Kenyans in the diaspora can invest locally and the opportunities available. In Kenya there are currently only four banks offering exclusive Islamic Banking services among the 42 lenders in the country
In the diaspora
Anne Lawi, Pangea Trust MD said they are looking to increase the share of remittances from 25 to 30 per cent even as it emerged that a greater percentage of the cash sent back home by Kenyans in the diaspora is not invested. From the report by Pangea, Shh3 billion was remitted by Kenyans abroad last year with 50 per cent covering food, medical expenses and school fees.
This comes in the wake of a 20 per cent increase in the remittances as reported by the Central Bank of Kenya.
