IFC invests first $5m in Islamic banking in sub-Saharan Africa

For the first time in its history, the International Finance Corporation (IFC), has made an Islamic investment in sub-Saharan Africa.

The World Bank Group member, today March 28, 2013 announced it is investing $5 million equity in Kenya’s Gulf African Bank to support corporate finance and lending to small and medium businesses in East Africa.

This will make IFC take up a 15% shareholding stake in the Gulf African Bank which is one of Kenya’s only two Islamic banks with 14 branches offering a range of Sharia-compliant banking products and services.

The bank is expected to use the IFC financing to increase finance for retail and corporate customers, develop programmes for women entrepreneurs and extend more services to small and medium businesses.

Meanwhile, another $3 million trade line is expected to be made available to Gulf African Bank under IFC’s Global Trade Finance Programme.

Oumar Seydi, IFC Director for East and Southern Africa, said, “IFC is committed to helping expand access to financial services in Africa. In Kenya, new financial market segments like Islamic banks enhance competition and can help reach a greater number of small businesses and women entrepreneurs, who are often excluded from banking services”.

Jamal Al Hazeem, Chairman of Gulf African Bank, said, “We feel priviledged that this is the first investment by IFC in an Islamic financial Institution in sub-Saharan Africa.”

According to Hazeem, IFC’s involvement will open up more opportunities for Gulf African Bank’s growth and expansion  and “enhance our processes.”

By Ekow Quandzie