Islamic insurance is seeing gradual recognition in several countries in Africa, building on the lead set by Sudan where the world’s first takaful company started operations in 1979.
In Kenya, President Uhuru Kenyatta has signed into law the Insurance (Amendment) Act 2016 which provides for the licensing and regulation of takaful business in the country.
The new law is set to enhance Kenya’s position as the premier Islamic financial hub on the African continent, reported Daily Nation.
The signing, which took place in the last week of 2016, came a week after the Capital Markets Authority (CMA) was admitted by the Council of the Islamic Financial Services Board (IFSB) as an associate member of the board. The IFSB, based in Kuala Lumpur, is a global standard setting body, which promotes the development of a prudent and transparent Islamic financial services industry.
Islamic financial institutions operating in Kenya included two fully fledged Islamic banks and five Islamic windows, two credit unions, one takaful company, one retakaful window and one unit trust fund, at the end of last September.
In Uganda, the Uganda Insurers’ Association (UIA) has signed a memorandum of understanding with the AlHuda Centre of Islamic Banking and Economic (CIBE) to develop takaful in the country, reported the AllAfrica news website.
UIA CEO Miriam Magala said: “Our partnership will extend to, among others, capacity building, product development, design and distribution, appropriate models for this market and advice on suitable regulatory frameworks.”
She added: “Takaful will allow for, among others, diversification of the products that the industry can provide to its ever-changing and growing market and given that insurance penetration in Uganda is less than 1%, we are confident that more and more Ugandans will take up insurance with the introduction of takaful.”
Ms Magala said insurers are cognisant of the fact that many people are still unaware about insurance in general, much less about takaful.
Meanwhile, Morocco is also promoting Islamic finance. The central bank has approved five requests to open Islamic banks in the country and allowed three French banks to sell Islamic products, reported Reuters. Morocco will issue its first ever Islamic bond in the domestic market in the first half of 2017. However, Parliament has yet to approve a Bill regulating takaful.