The County Pension Fund (CPF) on November 9 launched a Shariah-Compliant pension scheme which will be rolled out in compliance with Islamic Law. The scheme is tailored for the muslim faithful who work in the counties.
“Salih” will be administered under the supervision and guidance of Shariah scholars to ensure CPF conforms to Shariah principles.
Speaking during the launch, Retirement Benefit Authority (RBA) CEO Nzomo Mutuku said Shariah compliant products are set to play a role to transform Kenya into an international financial hub.
“Such products have gained popularity in the financial markets around the international market and also in Kenya where regulators such as RBA, Capital Markets Authority and Central Bank of Kenya have frameworks to guide their roll out in the market,” said the CEO.
RBA licensed Kenya’s first Shariah compliant pension product in 2013, since then, a few other Shariah compliant products have been launched to meet the growing demand.
CPF’s Managing Director Hosea Kili noted that the Shariah compliant product will not only target those of the Islamic faith but also to persons wishing to invest in ethical investments.
“It is our belief that this product will not only serve those of the Islamic faith, but rather will cut across to all persons keen on ethical investments that do not have a harmful impact on our health and environment,” Kili said.
He further added that the product had gained over 6, 600 members, with a fund value of Ksh850 million after approval from RBA over a month ago.
Unlike conventional pension funds, Shariah compliant schemes are prohibited from the payment or receipt of interest which is referred to as “Riba” under Islamic Law.
Introduction of Salih will meet the demands for ethical investments within the financial space particularly financial services that conform to Islamic Law.