By Dr Gamaliel Hassan, CEO, Stima DT Sacco
Stima DT Sacco Society Limited is celebrating a moment of great achievement – the official launch of Shariah-compliant products and services. This opens a new chapter in the Sacco’s business. Things can only get better with the addition of this unique business stream.
Islamic finance is founded on Shariahprinciples, which express an utmost intent of meeting the financial needs of participants in a manner that is just, fair, trustworthy, and honest, while ensuring equitable wealth distribution. It upholds the principles of good governance, risk-sharing, transparency, integrity and trust in business dealings. It also encourages activities that generate fair and legitimate profit, in which transactions are derived from genuine business. Islamic finance is thus highly comparable with both the cooperative and operative principles.
Naturally, we are excited that Stima DT Sacco has made a giant step of including Islamic finance in our array of products and services. This is a moment of great delight at the Sacco and among our well-wishers and people of goodwill.
Most recently, we celebrated when we launched our instant ATM card. That was last year, amid the ominous mist of the Covid-19 pandemic. The story of success continues, and we wish to give members many more such moments.
I am happy to report that the Islamic finance products are open to all members of Stima DT Sacco regardless of gender, social, racial, political or religious affiliation. The introduction of these products and services is in line with the Sacco’s commitment to redefine the financial wellness of members through innovative services.
The Sacco has introduced the full range of Shariah-compliant investments, accounts and financing products available under the Yasar banner. Yasar is a word derived from Arabic, that means wealth or prosperity. This is what we want for our members. Whether you want to gain equity, save, invest or get finance under Shariah-compliant principles, Stima DT Sacco has a product to suit your needs. Some of these products are conventional, but we have restructured them to adhere to the principles of Islamic finance.
Launching Shariah-compliant products and services supports Stima DT Sacco’s strategic objectives and goals towards mobilising savings and according our members financing at fair and reasonable rates.
The central feature of the Islamic financial system is the prohibition of paying and receiving Riba (interest). Money is therefore deemed as a medium of exchange, a storage value and a unit of measurement, thus the prohibition of interest. In this regard, the society shall provide Yasar equity based finance transactions, including Mudarabah, Murabaha, Musharakah, Salam and Tawaruq.
The legal environment in Kenya has changed since the first fully-fledged Islamic banks commenced operations in 2008. Amendments were done in the Banking Act in 2008 to cater for Islamic finance. Subsequently, as per the Finance Bill 2017, changes were made on the Capital Markets Act, Co-operative Societies Act, Sacco Societies Act, and others, to make them Shariah-compliant.
The amendments concerned the inclusion of various definitions and Shariah-compliant products in the substantive laws to facilitate the operationalisation of Islamic financial products in Kenya.
We at Stima DT Sacco are grateful to the Government, the Ministry through the State Department of Cooperatives, and Sacco Societies Regulatory Authority, for creating an enabling environment for Saccos to do business and empower members.
Stima DT Sacco members now have the opportunity to benefit from this alternative way of providing Sacco services. This is an opportunity worth seizing with both hands as we seek to empower our members for life.