Islamic finance has gained traction globally as an alternative source of financing for real economic development. The industry is expected to grow globally from $2.4tn in 2017 to $3.2tn by 2020. In Kenya, the Islamic finance industry remains nascent, despite recognition of Kenya’s potential as an Islamic finance hub for the East African region.
FSD Africa is currently supporting work on Islamic finance, with a focus on enabling policy and regulatory reforms and building capacity of key stakeholders.
FSD Africa’s support to regulators in the Kenyan financial sector has already resulted in several legal amendments and the development of new regulatory frameworks, which will create greater access to these financial products. The benefits of this work are already being felt. The domestic market has also been stimulated, with market stakeholders eager for the expansion of Islamic finance products into mainstream retail, commercial and corporate segments.