KBA CEO CHAT - Islamic Finance Business Expansion Opportunities

CEO | Peter Makau, DIB Bank Kenya, CEO
MONTH | March 2022
Chat Admin
Good morning everyone! Welcome to today's My Chat with a Bank CEO live chat. We are pleased that you could join the session
Chat Admin
Today's topic is Islamic Finance Business Expansion Opportunities and we are honoured to have Mr. Peter Makau, DIB Kenya, CEO as our host this morning.
Chat Admin
We look forward to your questions and thoughts around the topic Islamic Finance Business Expansion Opportunities and are prepared for a great learning session this morning.
Chat Admin
Please feel free to start posting your questions and thoughts on the topic and our host will take them from 10am.
Fredrick Juma
Good morning Admin. Glad to be here and fired up to learn some more about Islamic finance and the opportunities.
Fredrick Juma
My first question to Mr. Peter Makau would be; How is Islamic Financing different from conventional banking?
Maryann Kibatha
I am here to learn. Basically I have no questions because this is a new topic I haven't heard before today
Maryann Kibatha
However, how can the common mwananchi benefit from it? How worth it is it for small businesses?Kindly put into light what Islamic banking is too
Chat Admin
Thank you Fredrick for the questions. Maryann, thanks for this this will be a great session to learn
Dorine Mukhongo
Is Islamic finance only for Muslims?
JOHN KACHIBO
What are some of the financing frameworks available under Islamic Banking?
Nyamboga Ogaro
Is Islamic finance better than conventional banking?
Rahma Twahir
SMEs play such an important role in the economy, yet struggle to gain access to capital. What steps are being taken as an Islamic bank, to ensure the design of a range of products and/or services relevant to these SME's?
JOHN KACHIBO
Kindly expound on modes of Islamic banking finance.
Chat Admin
We note many people have already logged in and joined the chat. Karibuni sana!
JOHN KACHIBO
What are the reasons for the success of Islamic banking and finance in Islamic countries ?
Lynet Awino
Good morning ... So am really pumped up to know more about this topic as a whole. I would want to ask Mr Peter about the status of the Islamic Finance uptake in kenya so far
Chat Admin
Ladies and gentlemen, help me welcome Mr. Peter Makau, DIB Kenya, CEO; our host for today's topic
maina NJUGUNA
Hello...
maina NJUGUNA
Is DIB Bank an purely Islamic banking institution?
Nyamboga Ogaro
Kindly expound briefly on the issue of legal and regulatory framework for Islamic financing/banking
Peter Makau
Good morning all...my name is Peter Makau, i am CEO at DIB Bank Kenya and I take this opportunity to welcome all participants to today' s session of My Chat with a Bank CEO titled Islamic Finance Business Expansion Opportunities and facilitated by the Kenya Bankers Association...
Peter Makau
This session is part of the banking industry and Kenya Bankers Association continuing efforts to enhance awareness of Islamic Finance in Kenya...which is important for enhancement of financial inclusion and for providing alternative sources of finance to the public.
Maryann Kibatha
Pleasure to chat with the CEO. Thank you for teh welcome
Peter Makau
John Kachibo, the growth of Islamic Banking is mainly attributed to the growing availability of Islamic financial services by Islamic banks to meet the needs for banking services that are not provided by conventional banks. More specifically, banking services that are consistent with Islamic laws
Korir Issa
The Islamic banking system differs from that of commercial banks. Although this banking system copied most if its products and services from the commercial institutions, I believe there are regulatory frameworks guiding it. On that note, what are some of the financing frameworks available under Islamic Banking?
Peter Makau
Lynet Awino, we are happy to note your interest on this topic. Islamic banking has been growing in Kenya since its debut in 2005. However, market share within the banking industry in Kenya is still low, estimated at 2 percent of total banking industry net assets. However, it needs to be recognised that Islamic banking in Kenya is a relatively new concept of banking compared to conventional banking that has been around for a long time. It is notable that Islamic banking has progressed and today we have multiple banks that provide Islamic banking products and services.
Peter Makau
Good morning, Maina. Yes, DIB Bank Kenya provides exclusively Islamic Banking products and services. It is one of three banks in the market that provide exclusively Islamic banking products and services.
Chat Admin
..."Good morning Admin. Glad to be here and fired up to learn some more about Islamic finance and the opportunities."
Chat Admin
..."My first question to Mr. Peter Makau would be; How is Islamic Financing different from conventional banking? "
Chat Admin
..."I am here to learn. Basically I have no questions because this is a new topic I haven't heard before today"
Chat Admin
..."Is Islamic finance only for Muslims?"
Chat Admin
..." ..."Good morning Admin. Glad to be here and fired up to learn some more about Islamic finance and the opportunities.""
Chat Admin
..." ..."Good morning Admin. Glad to be here and fired up to learn some more about Islamic finance and the opportunities.""
Chat Admin
..."Good morning Admin. Glad to be here and fired up to learn some more about Islamic finance and the opportunities."
maina NJUGUNA
What products do you at DIB Bank Kenya have for individuals and MSMEs?
Maina Karanja
Hello there, My name is maina karanja.
JOHN KACHIBO
Are non Muslims safe in an Islamic economy system ?
Maina Karanja
Honoured to engage in the platform. My concern is, does the platform cater for promotion and provision of funding startup SMEs particularly in the green and clean circular flow economic models
Victor Chumba
My question is, what is the role of Shari'ah governance with regards to Islamic Banking?
JOHN KACHIBO
What is the ultimate objective of Islamic economics? What then happens to non Muslims? It is strictly for Muslims alone?
Peter Makau
Thanks for your questions Nyaboga Ogaro. Central Bank of Kenya has accommodated Islamic Banks by exempting them from provisions of the CBK Act that prohibit trading or investment in consideration of Islamic banking business model. Islamic banks are, therefore, exempted from Section 12 A and C of the Banking Act. The Finance Act was amended in 2017 to provide for Islamic finance by way of introduction/recognition of Islamic terminologies e;g Islamic Finance Arrangement, Islamic Finance Return and Sukuk.
Victor Chumba
Is Islamic Banking only applicable in Islamic nations
Benson Wainaina
Good Morning Peter, good learning points right there, always a pleasure learning from you.
Benson Wainaina
What needs to be done to open the Sukuk market in Kenya?
Peter Makau
Thank you Twahir for your question. Actually, Islamic banks in the market do provide for the needs of SMEs and their client base is composed of a material portion of SMEs. Perhaps the issue is more a need for increased creation of awareness by banking industry stakeholders and the more reason forums like this are important.
Peter Makau
Dorine, thanks for your question. No, Islamic finance is available to anyone who may want to use interest-free banking and anyone of any religious background can obtain Islamic financing.
Peter Makau
Kachibo, some of the Islamic financing options available include financing for working capital, assets financing, and savings and investment products and services.
Peter Makau
Kachibo, definitely non Muslims are safe in an Islamic economic system as Islamic banking does discriminate against non Muslims.
maina NJUGUNA
Can Islamic Banking work under the Movable Property Security Rights Act of 2017, and if it can, what products do you have for individuals and MSMEs?
Peter Makau
Maina, for both individuals and corporates, which include SMEs, we have a comprehensive spectrum of Islamic banking products and services that cover, among others, current account services, savings account, investment products, financing products for working capital and asset finance as well as treasury and trade finance products, and services.
Peter Makau
Victor, the role of Sharia Governance is to ensure that Islamic banks provide Sharia-compliant products and services.
Peter Makau
Fredrick Juma, Islamic finance is an interest-free finance system and in Islamic finance money itself has no intrinsic value and people are forbidden from lending with profit. Interest cannot be charged. Wealth can only be generated through legitimate trade and investment and any gain relating to this trade must be shared between the parties concerned.
Peter Makau
Good question, Benson. As earlier alluded, Sukuks have been provided for by the Finance Act No.15 of 2017. It is only a matter of time before we see issuance of Sukuks in the Kenyan market.
Chat Admin
Great learning session. Time has gone fast and our chat session is almost coming to a close. The host will soon wrap up the session
Peter Makau
Njuguna, yes Islamic Banking is compatible with the Moveable Property Rights Security Act of 2017.
Peter Makau
In closing, I would like to thank all the participants and Kenya Bankers Association for today's session and, I affirm that Islamic banking promotes and focuses on trade transactions and partnerships with the objective of developing an all-inclusive economy and allowing for spread of wealth. It fosters financial inclusion and strengthens financial stability and also serves as an incentive for economic development and diversification.
Peter Makau
Thank you and have a good day.
Chat Admin
Ladies and gentlemen, please join me in thanking our host Mr. Peter Makau, DIB Bank Kenya, CEO for an insightful chat session. He has unpacked so much for us on Islamic Finance Business Expansion Opportunities. Asante sana!
Chat Admin
We are also very grateful to all participants for the engaging questions and comments on the topic. You have all helped in making the session insightful.
maina NJUGUNA
Thank you Mr. Makau for your time and the admin for today.
Chat Admin
If you joined late do not worry, you can find a transcript of the chat session on this website.
Chat Admin
We look forward to having you once again on the chat next week. Our topic will be Intellectual Property as Possible Collateral for Youth Loans
Chat Admin
We shall close the chatroom but the transcript will stay available on this page. Have a blessed day and weekend ahead.