The initiation of fully -equipped Islamic Banking in Kenya has been willingly expected by the Muslim society. They have seen establishing of Islamic banking windows by a number of conventional banks for laşt two years. Both the Barclays Bank (Kenya) Limited and Kenya Commercial Bank Limited perform Islamic windows with the former branding its services, “LARIBA Banking”.
The Access of both Gulf African Bank and the First Community Bank into the market is awaited to show the first 100% Shari’ah complaint financial foundations with a range of products for their clients. There is presently a number of expectations from both Muslims and non-Muslims for this alternate form of banking that will bring in a new type of partnership and interest free banking. The public has badly affected for too long by high interest rates and vaporizing wavering of interest rates by conventional banks.
Current market surveys show that a large portion of the Muslim society stays untapped by the banking sector because of either non availability of riba-free banking or low returns. The research also shows that potential moneymaking markets for Islamic banking will be the trade society in Nairobi, Mombasa and other towns with respectable Muslim societies. However, the dispute will be to persuade the Muslim community that these are really fully-equipped Islamic banks with respectable Shari’ah advisory boards of global standards. Both Muslim and non-Muslims expect to interest-free banking service that is sufficient, modern, stable, clear and client friendly. These banks will be needed to invest greatly in the latest state of the art technology to diminish costs and remain competitive with conventional banks.
The government and the Central Bank of Kenya have the challenge of initiating the market and altering the Banking Act and Prudential Guidelines to show this new fact as has seen in South Africa, Europe, the United States, Canada, the Middle East, Far East and Australia. Kenya has the potential of being like Bahrain, the centre of Islamic banking in that area. The participation of the Islamic Development Bank, PTA Bank, IFC and Islamic banks and investors in the Middle East is very important to change this into a reality. The regional market is enormous as both Muslims and non-Muslims greet this form of banking that is clear, and offer caring partnership and free from the doubtfulness of interest rate waverings.