Islamic finance is a relatively new concept in postmodern Kenya. Having come to the market five years ago, it was primarily started by Muslim banking professionals and lawyers who lobbied the government for four years before finally being granted licenses to operate.
Kenya is a financial powerhouse in East Africa and has geared itself to be the Islamic financial hub of East Africa. With high literacy rates and a sizeable Muslim population 10 to 11 percent, the potential for growth is immense. Coupled with this is the relative enjoyment of peace and stability that the county has enjoyed, except for the 2007–2008 violence.
Islamic finance as it stands in Kenya is primarily concentrated in the commercial banking sector and has just recently begun to penetrate Islamic capital markets with the entry of FCB Capital and Genghis Capital.
There is still a great need for the creation of an awareness of Islamic finance: what it is and what its potential is, but some positive efforts have been made in that direction in the recent past with a yearly Islamic conference sponsored by Gulf African Bank. Islamic banks have also been quite proactive in lobbying regulators to work on changing the banking environment to be more favorable to them.
For centuries, Muslims traded with other nations and among themselves, from Indonesia to Morocco and from Spain to different ...