By FREDRICK OBURA
The Gulf African Bank has announced a sharia Auto Finance Plan to help people tied by certain religious beliefs own a car.
The bank said the new scheme launched Tuesday would enable its customers receive auto finance offering under ijara or leasing option.
"Most banks offer auto financing schemes for new and used vehicles. This has worked well to many currently receiving superior products under fewer restrictions on security and fast turnaround times on loan application," said Gulf African Bank Chief Executive Officer Najmul Hassan.
"There is a segment of the population that has not been served due to religious conviction."
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He said the bank would be targeting people who do not believe in paying interest on loans or may not be comfortable with the terms and constitutions constituting normal loans.
Ijarah is a form of borrowing intended to finance specific assets for instance plant and machinery, vehicles or office equipment.
"The ownership remains with the lessor," said Walid Khalid, Head of retail and Liabilities.
The offer comes at a time the local motor industry looks vibrant. In August 2009, Kenya became the largest importer of Japanese vehicles in Africa overtaking South Africa.