Surging demand for Islamic finance expertise untapped by Kenyan varsities

Higher education institutions in the country are yet to tap into the growing and lucrative demand for Islamic finance professionals needed by the rapidly-expanding multi-billion shillings niche sub-sector.

While Kenya is gradually consolidating its position as the hub of Islamic finance in the region,  local educational and training institutions are yet to respond to or anticipate  the need for a critical mass of professionals needed by the sub-sector.

“The government has made ambitious commitments to nurture Islamic Finance and make Kenya a regional hub.  But without developing the necessary local human resource capacity, it would be difficult support the growth of the sub-sector,” said Jaafar Abdulkadir, Head of Islamic Banking at the Kenya Commercial Bank.

Currently, only a few educational institutions offer an Islamic finance course, all at basic certificate or Diploma level. The Kenya School of Monetary Studies has been offering a certificate since 2014 in collaboration with the Malaysia-based International Centre for Education in Islamic Finance (INCEIF).

Umma University, based in Kajiado and Thika, also offers a one-year basic Diploma in Islamic Banking and Finance while the Mombasa-based Coast International College plans to roll out a Diploma in Islamic Finance after inking a deal with INCEIF last month.

Curricula in some local universities offering Business, finance and law at Bachelors and Masters Levels only mention Islamic finance in passing as one of the alternatives to the conventional financial systems.  

This scenario is amidst the backdrop of a shortage of well-trained Islamic Finance professionals in critical areas such as regulation, auditing, dispute resolution, taxation, accounting, shariah compliance, and corporate governance and product innovations. Other areas are Islamic Commercial Law, Banking and Insurance (Takaful), and Islamic Capital Markets

As a result of the shortage, the government has had to tap consultants from the United Kingdom and other countries to lead the ongoing process to craft an enabling regulatory and policy structure to oversee the sub-sector. Auditing of Islamic financial institutions by the Central Bank of Kenya has been a challenge partly due to shortage of local expertise.

This means that the foreseeable future, Kenyans will continue to rely on foreign-training institutions in Asia and Europe for specialized training on Islamic finance and economy.  

In the United Kingdom, for instance, more than 60 institutions are cashing in on the demand for Islamic finance training including MBAs that specialize on Islamic Finance. Malaysia is also drawing a growing number of people seeing expertise in the field.

Kenyans and their regional counterparts are also relying on regular workshops and conferences locally or abroad organised by International training institutions to develop and hone their expertise in Islamic finance.

Last week, the General Council for Islamic Banks and Financial Institutions (CIBAFI), the global umbrella of Islamic financial institutions, conducted a Technical Workshop in Nairobi on Governance, Risk and Compliance for Islamic Financial Institutions  in collaboration with the Kenya School of Monetary Studies (KSMS) of the Central Bank of Kenya.

The well-attended three-day workshop targeted middle-level professionals in financial institutions, regulators from continent including Kenya, Sudan, Nigeria, Burundi, Tanzania and other neighbouring countries.

“Capacity building is key for the orderly development of the industry for all levels of responsibilities within the Islamic financial institutions and regulatory bodies. The frontier markets are key to further growth of Islamic Finance for next 5-10 years,” said Aziza Yarlaeva, a CIBAFI senior official.

Mr. Abdulkadir challenged higher educational institutions in Kenya to exploit the growing demand for professional expertise in the Islamic Finance sub-sector to offer appropriate training in all levels. He said Kenya should strive  to be the training hub for Islamic finance in the region.

 “For instance, the local MBA and Executive programmes should have components or even specializations in Islamic finance to boost the pool of human resources to support growth of the sector,” he said.

He also challenged professional bodies like the Law Society of Kenya, Kenya Institute of Bankers, Institute of Certified Public Accountants of Kenya and others to integrate Islamic finance in their professional disciplines and development.

“Developing the critical mass of professionals in the sub-sector should be a collective responsibility including the government, financial and educational institutions and practitioners among others,” he said.

On his part, Dr. Ahcene Lahsasna, an international Islamic Finance consultant and Shariah Advisor with the Malaysia-based advisory firm Salihin said that in Malaysia, the leading centre of global Islamic finance, the central bank has established specialized training institutions to develop the requisite professional capacity in the subsector.

He added that the central Bank is also supporting private training institutions by posting specialized accredited training staff to enhance their capacity.

“Kenya can establish collaborations with Malaysia and Gulf Countries to boost training of professionals in the sub-sector through workshops, Executive and exchange programmes as local training capacity is steadily enhanced,” he said.