Nairobi — President William Ruto has launched the country's first shariah-compliant bond, the 'Linzi Sukuk,' on the Nairobi Securities Exchange's (NSE's) Unquoted Securities Platform (USP).

The Islamic security, valued at Sh3 billion, is set to finance the development of 3,069 affordable housing units in what the head of state now says will address the critical need for affordable housing in the country.

President Ruto emphasized the importance of this initiative in fostering a dynamic and inclusive capital market with the potential to impact various sectors positively.

"I am delighted by the response and commitment and commend your efforts in crafting this landmark asset-based security which has the potential to enhance efficiency in the delivery of our priority projects through optimal financial costs," he said.

He expressed confidence that the financing of affordable housing through such innovative financial instruments would create numerous job opportunities for Kenyans, thereby stimulating commerce through public-private partnerships.

The Linzi Finsco Trust received a nod from the Capital Markets Authority of Kenya (CMA) last year to float the country's inaugural Islamic bond.

Unlike traditional bonds, a sukuk bond is compliant with Sharia law, which prohibits the payment of interest.

Instead, sukuk bonds provide investors with a share of the profits generated by the underlying assets.

The introduction of the Linzi Sukuk bond is expected to attract a diverse pool of investors, particularly those seeking Sharia-compliant investment opportunities.

The Affordable Housing project, which is a key pillar in Ruto's development agenda, aims to address the housing deficit in the country by providing what the government has defended as affordable units.