Mwalimu National DT Sacco has launched a Shariah-compliant product known as Mualim.
Shariah-compliant product means adhering to Islamic law, which involves avoiding interest (riba).
The sacco said the product, which targets both Muslim and non-Muslim members, came after several requests by members.
“What we are looking for is basically to be more inclusive in our finance and products offering and also to expand our operations in terms of not only looking at what we earn, but also serve as many Kenyans as possible and be more financially inclusive,” said Kenneth Odhiambo, chief executive officer of Mwalimu National DT Sacco.
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He added: “Mualim, actually, is one of the innovations that we thought of when we were developing our current strategy two years back. And what we thought of was that a lot of our members who actually believe in Islamic finance were left out and they kept on asking in terms of what is in it for them, because they actually don’t believe in our conventional financial products.”
Odhiambo said before launching the product, a lot was put in place, including a Shariah advisory council, getting the professionals who understand Islamic finance and how to introduce it, and preparations have been pretty good and very resilient.
“The council has looked at it, and they are actually satisfied that it will meet, it is fit for the purpose in terms of offering this financial product,” he said.
The CEO said, looking at their membership segments of around 167,000, they have about 17 percent Muslim, who will benefit from the product, in addition to non-Muslims who believe in ethical finance without interest.
The sacco said it has already put in measures to segregate operations with a strategic business unit, separate bank accounts and a core system that will be headed by Muslim staff and the advisory council will have an oversight on how the funds are used and dispensed.
Mwalimu Sacco joins about two other saccos in the country that are now offering Shariah-compliant products.
Odhiambo said they are in discussion with Sacco Societies Regulatory Authority (SASRA), which gave them approval to offer the product six months ago, on how the regulator can build more capacity to be able to regulate that segment of financial offering.
Mwalimu National DT Sacco national chairman Joel Gachari said majority of their Muslim members have been withdrawing their deposits towards the end of the year to avoid dividends, which are earned from interest rates charged on loans and which Shariah is against.
“Since they do not want to partake loans on the conventional way and do not want to get or earn a dividend, you find the majority of them are not able to patronise the Front Back Office Services Activity (BOSA),” said Gachari.
He added: “You will find they only patronise the Save as You Earn Account (SAYE) at FOSA. Those who patronise BOSA product only do so for 11 months, then they withdraw their deposits because they do not want to wait until the end of the year so that they can be able to earn a dividend.”
Gachari said they have trained all their senior management staff, staff at the 22 physical FOSA branches and around 14 satellite branches all over the country on offering Shariah-compliant products.
“We look forward that in the next close to around six months or even one year, over 20 percent of our members, will be part and parcel of this product offering that we are launching today,” he said.
Chief Kadhi Hassan Omari welcomed the launch of the product, saying it is another opportunity for the Muslim community to enjoy.
“This is another opportunity for us especially our teachers who have been members of this sacco but prevented because of ethical issues due to their faith and I am sure the Muslims all over will embrace it and the product will get massive support,” he said.
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Mwalimu National DT Sacco has launched a Shariah-compliant product known as Mualim.
Shariah-compliant product means adhering to Islamic law, which involves avoiding interest (riba).
The sacco said the product, which targets both Muslim and non-Muslim members, came after several requests by members.
“What we are looking for is basically to be more inclusive in our finance and products offering and also to expand our operations in terms of not only looking at what we earn, but also serve as many Kenyans as possible and be more financially inclusive,” said Kenneth Odhiambo, chief executive officer of Mwalimu National DT Sacco.
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channel
on WhatsApp
He added: “Mualim, actually, is one of the innovations that we thought of when we were developing our current strategy two years back. And what we thought of was that a lot of our members who actually believe in Islamic finance were left out and they kept on asking in terms of what is in it for them, because they actually don’t believe in our conventional financial products.”
Odhiambo said before launching the product, a lot was put in place, including a Shariah advisory council, getting the professionals who understand Islamic finance and how to introduce it, and preparations have been pretty good and very resilient.
“The council has looked at it, and they are actually satisfied that it will meet, it is fit for the purpose in terms of offering this financial product,” he said.
The CEO said, looking at their membership segments of around 167,000, they have about 17 percent Muslim, who will benefit from the product, in addition to non-Muslims who believe in ethical finance without interest.
The sacco said it has already put in measures to segregate operations with a strategic business unit, separate bank accounts and a core system that will be headed by Muslim staff and the advisory council will have an oversight on how the funds are used and dispensed.
Mwalimu Sacco joins about two other saccos in the country that are now offering Shariah-compliant products.
Odhiambo said they are in discussion with Sacco Societies Regulatory Authority (SASRA), which gave them approval to offer the product six months ago, on how the regulator can build more capacity to be able to regulate that segment of financial offering.
Mwalimu National DT Sacco national chairman Joel Gachari said majority of their Muslim members have been withdrawing their deposits towards the end of the year to avoid dividends, which are earned from interest rates charged on loans and which Shariah is against.
“Since they do not want to partake loans on the conventional way and do not want to get or earn a dividend, you find the majority of them are not able to patronise the Front Back Office Services Activity (BOSA),” said Gachari.
He added: “You will find they only patronise the Save as You Earn Account (SAYE) at FOSA. Those who patronise BOSA product only do so for 11 months, then they withdraw their deposits because they do not want to wait until the end of the year so that they can be able to earn a dividend.”
Gachari said they have trained all their senior management staff, staff at the 22 physical FOSA branches and around 14 satellite branches all over the country on offering Shariah-compliant products.
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“We look forward that in the next close to around six months or even one year, over 20 percent of our members, will be part and parcel of this product offering that we are launching today,” he said.
Chief Kadhi Hassan Omari welcomed the launch of the product, saying it is another opportunity for the Muslim community to enjoy.
“This is another opportunity for us especially our teachers who have been members of this sacco but prevented because of ethical issues due to their faith and I am sure the Muslims all over will embrace it and the product will get massive support,” he said.
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By James Wanzala