Kenya’s first fully Shariah compliant bank Gulf African is banking on a Shariah compliant insurance premium financing facility in the country to boast growth.
The regular Insurance Premium Financing (IPF) enables businesses and individuals with short-term loans to cover costs of immediate insurance premiums while spreading repayment over an agreed period.
This Shariah compliant IPF enables the lender to enter into an agreement with both the insurer and the insured, where the bank pays the full insurance premium of the insured immediately while operating under the Tawarruq model.
The lender says this model allows clients to raise money easily with non-interest benefits.
“We are leveraging our financial expertise to ensure customers do not have to liquidate necessary assets or spend key funds as their policies will readily be funded by Gulf African Bank. The policy will act as security for the bank.
“Customers will also enjoy effortless renewals as agreed upon,” said Gulf African Bank Managing Director bdalla Abdulkhalik.
GAB will also act as the billing and collecting agent.