By Amoto Dennis
Kenya Bankers Association Chairman Habil Olaka has observed that banks offering Islamic sharia complaint products face challenges in meeting rising demands for the products.
He noted that the Kuala Lumpur based Islamic Financial Services Board demands that banking services and products must comply with sharia law to grow the products at about 15% of annual output.
‘’We expect more conventional banks to realize the gap in the market and start coming in to ensure they fill it,’’ Olaka said.
He revealed there are three fully fledged Islamic banks in Kenya: First Community Bank founded on May 29th 2007; The Gulf Bank that followed suit the following year and the new kid on the block Dubai Bank,: born last year in April.
He noted that other commercial banks like KCB and NIC etc. long opened Islamic banking windows, specialized in operational entity rolled out by conventional institution.
The conventional window only aims to meet the demand of customers.
‘’The lenders often offer deposits and withdrawal services and other trade finance,” he noted.
Accordingly Islamic banking and finance products emphasize the sharing of profit between the bank and customer, safekeeping of savings ,joint ventures like buying a car or being built a house for, and leasing which are also available in conventional banking .