Kenya issues first-ever Islamic bond to support affordable housing agenda
Kenya’s Capital Markets Authority (CMA) has allowed the issuance of the first-ever Islamic bond in the country, which will be used to build affordable housing units.
The sukuk bond, issued by Linzo Finco Trust, will raise Ksh3 billion ($20 million) at a return of 11.13%.The bond is a milestone in efforts to diversify the country’s capital markets and provide inclusive investment avenues for both local and foreign investors. It is also a significant step towards addressing the housing deficit in Kenya.
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The regulator’s chairman Ugas Mohammed said the new instrument will further open up the country’s capital markets to groups of “ethical investors who want to participate in our capital markets but have not had an opportunity.”
Sukuk bonds are governed by Islamic law (Sharia), which forbids charging or receipt of interest or investment in businesses considered undesirable or unlawful. It also forbids any form of uncertainty or transactions that involve speculation.
The issuance of the sukuk bond is a positive development for Kenya, as it will help to diversify the country’s capital markets and provide a new investment opportunity for both local and foreign investors. It is also a significant step towards addressing the housing deficit in Kenya.
