Kenya get first Islamic bank
Posted on Friday 14 March 2008
Maina Waruru, Africanews reporter in Nairobi, KenyaTwo branches of the first fully Sharia compliant bank in Kenya, the Gulf African Bank (GAB), have opened Nairobi. The bank’s officials say they will offer services to all while observing the rules of credit and interest as subscribed in the Holy KoranThe GAB will initially operate a branch in the city centre and another at the city suburb of Eastleigh an crowded estate dominated by refugees from Somalia and Kenyan Somalis now , an area that does booming business dealing with imports from Dubai and the far east.The bank according to it’s managers will later open another branch in Mombasa a town with huge Muslim population before moving to other places in the coast and northeastern province where the Muslim presence is big.
With an estimated population of nearly 5 million Muslims in Kenya GAB hopes to do booming business in the country with hopes being high that most of the religion’s faithful will operate account there as opposed to ordinary commercial banks.
It’s coming to Kenya has been on pipeline over the past 2 years and is in response to popular demand by some strict adherents of the faith, who refuse to take loans from commercial banks for fear of contradicting the teachings of Islam.
The result has been that a lot Muslims in the country refused operate bank accounts taking the risk of keeping their money under mattresses .
GAB while in a class of it’s own will enter a crowded banking sector, with nearly 60 banks operating in the country.
Though it experienced instability marked by collapse of some banks in the 1980s to the mid 1990s ,the sector is currently as it’s stablest state since independence, with only2 banks going under since 1999.
The sector has also recorded some of the biggest profits of all sectors of the economy , with Kenya commercial Bank, Standard Chartered and Barclays Banks making profits in excess of Ksh 4 this year .
The entry of GAB into Kenya is being interpreted as an expression of confidence in country coming out of it’s worst crisis ever since independence, after violence broke out in January over disputed presidential poll results.
GAB hopes to well it’s niche of Islamic banking being a monopoly in Kenya where it will face little competition from the many players in the sector.
Keywords: business kenya religion