Kenya

MICROCAPITAL BRIEF: Kenya-based Gulf African Bank, African Guarantee Fund Partner to Lend $1.2m to Small, Medium-Sized Businesses

The African Guarantee Fund (AGF), reportedly has agreed to guarantee an unspecified portion of KES 100 million (USD 1.2 million) to be loaned by Gulf African Bank (GAB) to SMEs in Kenya. After the signing of the agreement, GAB Managing Director Asad Ahmed reportedly expressed his belief that the deal will help to increase the bank’s financing and risk management capabilities. AGF was established in Kenya in June 2012 with initial capital sufficient to issue partial guarantees of loans totaling USD 50 million. AGF has branches in nine African countries as of March 2013. As of March 2011, GAB had total assets of KES 9.6 billion (USD 112.3 million) and customer deposits of KES 8.2 billion (USD 96 million).

Takaful: TIA to expand operations in East Africa

Kenya's only Shariah-compliant insurer Takaful Insurance of Africa Ltd (TIA) plans to expand its operations into five East African nations, according to its Chief Executive Officer Hassan Bashir. Under TIA’s five-year plan it will expand into Ethiopia, Tanzania, Uganda, Somalia and the autonomously governed enclave of Somaliland, where it was granted a license this year. CIC Insurance Group (CIC) is one of the largest investors in TIA with about 22 percent, while four investment companies also have stakes. In Kenya, TIA has four outlets and 80 agents in Nairobi and Mombasa. The company plans to add at least two more outlets this year and double the number of agents, Bashir said.

Kenya's Takaful Insurance plans East Africa expansion

Kenya-based Takaful Insurance of Africa Ltd. plans to expand into five East African countries, including Tanzania, Somalia, Uganda, Ethiopia and the self-declared sovereign state Somaliland, as part of the insurer's plans for the 2013-2017 period, CEO Hassan Bashir said.

Kenya’s Sole Shariah-Compliant Insurer to Expand in Region

Takaful Insurance of Africa Ltd. plans to expand its operations into Ethiopia, Tanzania, Uganda, Somalia and the autonomously governed enclave of Somaliland under its five-year plan 2013-2017. In Kenya, Takaful Insurance has four outlets and 80 agents in Nairobi and Mombasa. The company plans to add at least two more outlets this year and double the number of agents, according to its CEO Hassan Bashir. Takaful’s premiums totaled 430 million shillings last year.

Takaful seeks to diversify product range

Takaful Insurance of Africa is banking on product diversification and opening of more shops to establish itself better in the region. The insurer has already acquired an operating licence from the Retirement Benefits Authority to start a Shariah-compliant pension scheme while the Insurance Regulatory Authority (IRA) allowed it to transact long-term insurance business or family Takaful known in conventional insurance as life insurance. Moreover, TIA is planning its expansion, especially in regions of Kenya with a high Muslim population. The company posted profits of Sh26 million for the year 2012.

Islamic banks break even and post growth in profit

The two Islamic banks in Kenya posted growth in their profits last year as the faith-based banking concept becomes entrenched in the country's financial sector. Gulf African Bank and First Community Bank were able to break even in a fairly short time — Gulf African in two years and First Community in three years. Last year, Gulf African registered 154 per cent after-tax profit growth to Sh242 million. First Community Bank, on its part, recorded 239 per cent growth in profit-after-tax to Sh241.3 million last year. According to the Central Bank, by December 31, 2010, the two Islamic finance banks collectively commanded 0.9 per cent of the banking sector net loans and advances of $115 million (Sh9.7 billion) and deposits of $171 million (14.5 billion).

Sharia insurance policyholders paid dividend

In line with the Sharia law on insurance of sharing profits and losses, Takaful Insurance of Africa company has shared Sh15.6 million surplus from its premium pool with clients. The company on Saturday issued 2,000 clients who contributed to the company's premium pool over the last one year with cheques for various amounts depending with the money they paid for various covers. The three highest paid customers took home Sh240,000, Sh150,000 and Sh100,000 respectively. According to its five-year plan, the company plans to spread its wings all over the country and to establish networks in Nyanza, Western and also Isiolo county.

IFC Makes First Islamic Finance Investment in Sub-Saharan Africa

IFC has announced the investment of $5 million equity in Gulf African Bank, one of Kenya’s two Islamic Banks. The bank will use IFC’s financing to increase finance for retail and corporate customers, develop programs for women entrepreneurs and extend more services to small and medium businesses. Jamal Al Hazeem, Chairman of Gulf African Bank, welcomed IFC’s decision to take up a 15% shareholding stake in Gulf African Bank. In addition to the equity investment, a further $3 million trade line will be made available to Gulf African Bank under IFC’s Global Trade Finance Program.

Kenya Re launches Sharia compliant product

Kenya Reinsurance Corporation ( Kenya Re) is one of several local firms to venture into the Islamic re-insurance business with establishment of a Sh50 million Re-Takaful (or Sharia compliant reinsurance) window. Managing Director Jadiah Mwarania said demand for Shari’ah-compliant products has been growing and Kenya Re is seeking to ensure it retains existing business and expand into new markets. Kenya Re also launched a newly appointed board that would guide, monitor and supervise the new venture to ensure compliance with Sharia rules and principles. Mwarania expressed confidence that rekakaful would enable Kenya Re increase market share and attain financial growth.

Kenya Re sets sights on Islamic finance

The Kenya Reinsurance Corporation is planning to venture in sharia-compliant business and confirmed that it will start ReTakaful insurance in the country and the areas where it already has a presence in West Africa and the Middle East markets. According to the firm’s managing director, Mr Jadiah Mwarania, the development is part of Kenya Re’s 2013-2017 core strategic areas that touche on market expansion and development of products. The firm elected a sharia-based supervisory board last year to advise the firm on acceptable aspects of the ReTakaful.

Genghis Capital to Launch Shariah Unit Trust

Genghis Capital, the investment arm of Chase Bank is planning to launch a Shariah-compliant unit trust called the Iman Fund in Kenya next month. The Fund is aimed at Muslim investors with an entry level for investments of minimum 500 Kenyan Shillings ($5.78).

Don’t grab land, invest in the locals

Multinational corporations and nations buy up land in foreign countries, most of them intending to export the production. Oxfam recently published a report about this phenomenon, called land-grabbing and its problems for the local societies. However, the Oxfam’s study also gives recommendations for a possible solution to the dilemma.

Genghis to launch Islamic unit trust

Genghis Capital plans to launch Shariah-compliant unit trust in February aiming to raise stakes in the nascent market mainly tailored for Muslim investors. The unit trust is named Iman Fund and is part of a money markets, equity, diversified and bond unit trusts which the company intend to launch in the very near future. According to the Genghis Capital unit trust consultant, there are many Kenyan investors willing to invest in ventures considered socially responsible. However, so far their options have been limited because religious beliefs forbid most of what is on offer.

Operations Risk Manager

Reporting to the Head of Risk and Compliance, the successful candidate will identify measure and analyze the various enterprise-wide operations risks that the Bank faces and formulate strategies on how to mitigate and minimize the risk exposures.

Bank unveils Sharia product

A further Sharia-compliant product for corporate customers was recently launched by Barclays bank. It is called La Riba Asset Finance and serves customers to buy assets locally as well as internationally. The product is meant for Muslim clients.

Read more on: http://www.the-star.co.ke/news/article-91394/bank-unveils-sharia-product

Barclays Kenya to Offer Shariah-Compliant Corporate Finance

Barclays Bank of Kenya Ltd. announced the beginning of Shariah-compliant asset-finance product offer for corporates companies. This way it attempts to meet the growing demand of those companies. Barclays set aside $30 million for the so-called Corporate La Riba Asset Finance product. The latter includes fixed pricing and repayment periods of up to five years.

Read more on: http://www.bloomberg.com/news/2012-10-16/barclays-kenya-to-offer-shariah...

IFC to invest $5 million in Gulf African Bank

International Finance Corporation (IFC) proposed an equity investment in Gulf African Bank (GAB) worth $5 million. The investment is expected to improve the bank's strength and provide additional capacity for growth. under IFC’s Global Trade Finance Program (GTFP), an additional $3 million trade line will be made available by IFC to the bank.

Diplomat to start Horn of Africa’s first stock market

Somali Ambassador Idd Mohamed wishes to establish a stock exchange in neighbouring Kenya in order to allow other east Africans access to companies in Kenya. This should encourage priavate capital to develop across the continent.

Kenya Re appoints Sharia board

In preparation to assume risks of firms offering Islamic Insurance cover known as ReTakaful, Kenya Reinsurance Corporation (Kenya Re) has decided upon a Sharia board. This way, the establishment of a dedicated ReTakaful window has been brought closer within the corporation. The board of Muslim scholars and people conversant with the Quran will contribute to the preservation of Kenya Re's responsiveness to requirements of its clients and to its development of solutions that satisfy the takaful industry demands for Sharia-Compliant reinsurance services.

Islamic banking in Africa

KFH Research made a report about the future of Islamic finance in Africa that shows that there are various promising opportunities for the growth and development of Islamic banking in Africa; especially North African countries, in addition to Kenya, Nigeria, Senegal and South Africa.
In addition, the report noted that Africa hosts 38 Islamic finance institutions, and stressed that most African countries have amended their legislations to allow Islamic institutions to operate.

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