Barclays Bank of Kenya yesterday launched another Sharia-compliant product for corporate customers.
The La Riba Asset Finance is aimed at enabling corporate customers to acquire moveable assets both locally and internationally.
The new product is based on the Murahaba, a cost plus profit Islamic finance instrument, whereby customers identify the assets they want to acquire upon which Barclays buys it and sells to the customer at an agreed price.
Barclays Kenya managing director Adan Mohamed said the new product has no maximum limit of access to financing since the facility is based on the customer's ability to repay the facility.
However, the minimum financing that customers can get is Sh500,000. Mohamed said the customers can also choose to acquire the assets through a five-year period in installments.
"This new product is not restricted to the people of Islamic faith only. Anyone can enjoy it regardless of the religion you profess," said Mohamed during the launch at Aga Khan Hall in Mombasa.
"Before now its predominantly been personal customer-focused. Somebody wanted to buy a saloon car, small canter for transporting things, but excluded business customers. It excluded companies who are borrowing from us," said Mohamed.
Mohamed said the Islamic finance industry is in the middle of a phenomenal expansionary phase. He said it is exhibiting rapid growth with Islamic finance assets projected to reach USD1.6 trillion by the end of 2012.
In Kenya, the bank now deals in USD 30 million in Islamic asset projects worldwide.
Former chief kadhi Kassim Hamad, who is in the Shariah advisory board, said Muslims were at first left out when banks dealt with loans.
He said the launch is a great step towards ensuring equal opportunities for all religions in the country. According to Islamic faith, it is wrong for one to ask for interest on loans.
The Shariah advisory board chairman Sheikh Ahmed Musallam said Islamic banking is now not only felt in Kenya but also 'lived'.
He said this has created opportunities for business owned by Muslims to expand just as their counterparts in other religions.