Islamic banks carve niche in crowded market

NAIROBI, Thursday

Islamic banks have grown to account for nearly one per cent of gross assets in the banking sector since they first opened their doors early last year, the Central Bank of Kenya said yesterday.

The Islamic finance industry is seeking to grow outside its main centres in the Gulf Arab region and South East Asia to tap into Muslim minorities in Western and African countries.

Its banks cater for customers who want to follow Islamic rules on avoiding direct payment or earning of interest, which are viewed as usury under Islamic law.

Central Bank Governor Njuguna Ndung’u said the two Islamic banks operating in Kenya — Gulf African and First Community -— had a loan portfolio of 4.9 billion shillings ($64.3 million), deposits totalling 7.5 billion shillings and 27,270 deposit accounts.

—Reuters