President William Ruto has officially announced the listing of the country’s inaugural Islamic bond, known as the Linzi Sukuk, on the Nairobi Securities Exchange (NSE).
This occasion was marked by a formal Linzi Sukuk Bell-Ringing Ceremony held at the NSE headquarters in Westlands, Nairobi.
A Milestone in Financial Innovation
During the ceremony, President Ruto emphasized the groundbreaking nature of this financial instrument, stating:
“With today’s listing, the Linzi Sukuk joins a portfolio of innovative financial instruments on the NSE, including the Elam Fahari real estate investment trust.”
Addressing Challenges in Islamic Finance
While celebrating this achievement, President Ruto also acknowledged existing hurdles in the broader implementation of Islamic finance in Kenya. He highlighted a key issue:
“However, the absence of a centralized Sharia governance board remains a significant barrier to the broader admission of Islamic finance.”
To tackle this challenge, the President has directed the National Treasury and the Central Bank of Kenya to expedite the establishment of such a board. He further elaborated on his vision:
“To address this, I ask our financial regulators to collaborate with the national treasury and Islamic finance stakeholders to develop a robust technology framework that will support the growth of Islamic finance in Kenya, which has tremendous potential to unlock our investment resources and boost our economy.”
Linzi Sukuk: Bridging Finance and Social Development
The Linzi Sukuk is not just a financial instrument; it’s also a tool for social development. The bond aims to raise funds specifically for the construction of affordable housing units, addressing a critical need in Kenya’s urban areas.
This aligns with the government’s broader agenda of providing accessible housing solutions to its citizens.
Linzi Finco Trust, the entity behind the Sukuk, plans to utilize the proceeds from this bond to finance the construction of these much-needed housing units.
Early Success and Market Response
The launch of the Linzi Sukuk has already shown promising results. According to Business Daily Africa, this pioneering Shariah-compliant bond successfully raised 3 billion Kenyan Shillings.
This strong initial performance indicates significant investor confidence and interest in this new financial product, potentially paving the way for more Islamic financial instruments in Kenya’s future.
