Gulf African Bank, the new Shariah compliant bank in Kenya will introduce a special bank account for Muslim pilgrims.
Chief executive of the bank Najmul Hassan said the Hajj Savings Account would allow one to save money for Hajj, one of the fundamental pillars of Islam. He said the bank has partnered with Qatar Airways to enhance the account package by making available additional benefits for the Hajj traveller, including special fare. The airline operates five weekly flights to Jeddah via Doha.
"The partnership will provide our customers with a convenient way to save and travel to Mecca and simplify travel and accommodation logistics," said Mr Hassan.
Hassan was speaking during the launch of the Hajj product in Nairobi. He said customers would also benefit from pre-travel information sessions, fees waiver on Hajj banker’s drafts and a special information desk in Mecca. "The partnership will deal with logistics surrounding the pilgrimage to allow the individual focus on what is important – fulfillment of the once in a lifetime pilgrimage," he said. "To differentiate ourselves in the competitive market, we must relentlessly come up with innovative products as customers are demanding more choice in what is offered," said Hassan.
Recently, the bank said it would step up its branch network from three to 11 before the end of the year. The bank now has four branches in Nairobi. It is believed that Muslims have not opened accounts with and avoid financial arrangements with conventional banks for fear of going against the dictates of their religion which forbids charging of interest (usury).“Residents will gain access to a partner who shares their values, integrity and transparency.
The bank will provide extensive Sharia compliant and innovative products and services,” bank chairman Suleiman Shahbal said during the opening of the Mombasa branch.Mr Hassan said Sharia banking was based on the principles of ethics and fairness instead of undue enrichment at the expense of customers.
“By the end of 2009, we hope to have set up 25 fully operational branches in Kenya then we will extend our footprint to Tanzania, Uganda and Djibouti in the next five years” Mr Shahbal said. Preparations for starting a business in Tanzania are already under way.
Huge potential “Based on the few months’ experience the bank has had in Kenya, there is a huge market potential that will steer this growth,” he added. Under the Sharia concept, banks work under the principle of sharing returns in a partnership. When a customer deposits money in the bank for instance his contribution is an entitlement to share in the bank’s profit.Conversely when one seeks financial assistance from the bank, the bank first becomes an investor in the assets that one seeks to finance. Despite the bank having products similar to those in conventional banking, the business is more inclined in dealing with goods (tangible items) rather than money.
For instance, the bank would buy the properties for its customers and sell the same at a small profit margin, Mr. Najmul said. The GulfAfrican Bank is promoted by gulf based financial institutions including Istithmar, a company belonging to Dubai World along with prominent institutional and individual investors.
