Nairobi,Kenya: Standard Chartered Plc will start offering Islamic banking services in Kenya as a springboard into the rest of Africa.
The bank said it may also expand services in Indonesia, its global head of Islamic consumer banking has said.
Shariah-compliant banking makes up two per cent of Kenya’s banking industry. It is split between two Islamic lenders and conventional banks with Shariah-compliant products, like Barclays Kenya.
“We are looking at Africa as the next frontier for the Islamic banking sector,” Wasim Saifi told reporters in Nairobi, where he attended an Islamic finance conference.
He said the bank would offer the services through its Islamic banking brand, Standard Chartered Saadiq.
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The services target Muslim population of four million people —10 per cent of the total, as well as non-Muslims.
“One of the main reasons for doing that is primarily because the local market place for Islamic banking is already well developed,” he said.
There are two Islamic banks operating in Kenya — Gulf African Bank and First Community Bank, licensed in 2008. A Takaful insurance company has also begun operating in the past two years. Saifi said the new products will first be launched in Kenya before rolling it out in other East African countries and west Africa.
“We are looking at numerous countries for extending our Islamic banking footprint. One market that excites us a lot is Indonesia,” he said.
Standard Chartered currently offers Islamic banking in Indonesia through associate Bank Permata.
With the biggest Muslim population in the world, the country has a five per cent penetration rate for Islamic finance, which is set to triple or quadruple in the next five-ten years, Saifi said.