Kenya licences first ethical Islamic finance fund

Kenya has licensed its first ethical fund, an Islamic fund issued by FCB Capital, a sharia-compliant investment bank. It is a fully-owned subsidiary of First Community Bank and the first to offer a Collective Investment Scheme geared towards ethical investing under Islamic capital markets product range.
“Kenya has ambitions of becoming the Islamic finance hub of East Africa as part of our wider aspiration to become an international financial centre,” said Stella Kilonzo, Chief Executive Officer of the Capital Markets Authority, at the licencing of First Ethical Opportunities Fund on 7 March, according to press reports in Xinhua and Coastweek. She said the CMA will continue to encourage stakeholders in Islamic finance to explore opportunities available for structuring, issuance and investment shariah-compliant products such as Real Estate Investment Trusts (REITs) and bonds.
She also called on Islamic finance institutions to work with CMA and the joint financial sector regulators in Kenya towards the establishment of a full-fledged single Shariah Advisory Council/ Board to enhance the consistent application of Shariah rulings. She said the council could provide guidance on product authenticity within the entire Islamic finance industry in Kenya.
Stakeholders in Islamic finance should also work together to develop the skills of professionals with expertise in Islamic financial advisory services and investment. CMA is also focusing on broad market education, tax harmonisation and formulation of policy and legal frameworks to help accelerate the growth of these new products. First Community Bank has participated in shariah-compliant components of infrastructure bonds issued by the Government of Kenya from 2009.


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