President William Ruto has officially launched Kenya’s first shariah-compliant bond, the ‘Linzi Sukuk,’ on the Nairobi Securities Exchange’s (NSE) Unquoted Securities Platform (USP). This groundbreaking initiative aims to finance the development of 3,069 affordable housing units, addressing a critical need for accessible housing in the country.
Valued at Sh3 billion, the Islamic security underscores President Ruto’s commitment to fostering a dynamic and inclusive capital market. He highlighted that the sukuk bond has the potential to positively impact various sectors, emphasizing the importance of crafting such landmark asset-based securities.
President Ruto commended the response and commitment from stakeholders, praising their efforts in developing this innovative financial instrument. He noted that sukuk bonds, unlike traditional bonds, do not involve the payment of interest, making them compliant with Sharia law. Instead, investors receive a share of the profits generated by the underlying assets.
The launch of the Linzi Sukuk bond is anticipated to attract a diverse pool of investors, particularly those interested in Sharia-compliant investment opportunities. This development is seen as a significant step towards enhancing efficiency in delivering priority projects through optimal financial costs.
The Linzi Finsco Trust was granted approval by the Capital Markets Authority of Kenya (CMA) last year to float the country’s inaugural Islamic bond. This move aligns with the government’s Affordable Housing project, a key pillar in President Ruto’s development agenda, aimed at addressing the housing deficit by providing affordable units.
President Ruto expressed confidence that financing affordable housing through such innovative financial instruments would create numerous job opportunities for Kenyans. This initiative is expected to stimulate commerce through public-private partnerships, further contributing to the country’s economic growth.
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