Dubai: A consortium of investors including a Bank Muscat unit and Dubai government investment agency Istithmar will open an Islamic bank in Kenya this April, the bank's chairman said.
Bank Muscat International (BMI), which plans to sell a 40 per cent stake in an initial public offering this year, will own 20 per cent of Gulf African Bank, Abdul-Malik Al Khalili told Reuters in Dubai.
Other shareholders in the bank, which Al Khalili termed as Kenya's first sharia-compliant lender, include Istithmar, which will hold 30 per cent, and International Finance Corp, which has taken a 10 per cent stake, said Khalili, chairman of both Bank Muscat and BMI.
Sharia, or Islamic law, bans receiving interest, which the religion equates with usury. Saudi investors and the Free Trade Area bank are also shareholders, Al Khalili said. 
 
Gulf African will start with $25 million in capital and could expand to other African countries, where Islamic finance is still underdeveloped, he said.
Around 26 per cent of Kenya's population is Muslim but there is a dearth of banking services that comply with sharia, he said.
"Africa is an attractive emerging market for growth of Islamic finance. There is a lot of liquidity in the Gulf and we are making a bridge between the two," Al Khalili said.
Kuwait's Al Madina for Finance and Investment said in September it would set up an Islamic bank in Kenya with other investors, which it did not name. It called Kenya the gateway to East and Central Afric