Kenya’s First Sukuk Bond Receives Regulatory Approval

Kenya’s Capital Markets Authority (CMA) has granted approval for the issuance of the nation’s inaugural Sukuk Bond by Linzi Finco Trust. This Sukuk aims to raise KSh. 3 billion, with the proceeds earmarked for the development of 3,069 institutional housing units. Investors can anticipate an attractive internal return of 11.13%.

Sukuk, also referred to as Islamic bonds, adhere to the principles of Shari’ah law in their structure and operations.

Kenya faces a substantial housing demand, estimated at 250,000 units annually, while the current supply only adds 50,000 new houses per year, resulting in an annual housing deficit of 80 percent. To bridge this gap, the government has initiated collaborative efforts between the national government, counties, and the private sector to deliver 200,000 housing units annually. Over the past three months, three projects have been launched, promising a total of 7,800 units to help address this critical issue.