Tanzania gets first Islamic brokerage firm

Dar es Salaam. A new company was unveiled in Tanzania to deal with the brokerage of Islamic bonds and provide investment advisory services related to Sharia-compliant products.

Known as Yusra Sukuk Company Ltd, the firm is the first Islamic brokerage company in Tanzania and sub-Saharan Africa, according to its chairman, Mohammed Issa.

“Our company has two licences for both dealing with securities and operating as an investment advisor,” Mr Issa said during a press conference on Wednesday.

“One important point is that Yusra Sukuk is not competing with companies in the industry but aiming to accelerate the growth of the sector by partnering with other players,” he said, adding that it will only deal with sharia-compliant businesses and provide an avenue for Halal investment.

Although they follow Muslim criteria for Halal dealing, the Sharia-compliant services are open to all people regardless of the differences in their religions.

“We will screen all businesses using the Sharia criteria, but the investment opportunities are open to all people. Our role is to advise those who need Halal investment in both primary and secondary markets,” added Mr Issa.

The company comes at a time when Tanzania is experiencing a rise in the provision of Islamic financial services, which require professional advisors.

Currently, Tanzania has one fully-fledged bank, Amana Bank, that provides only sharia-compliant financial services and some other conventional banks have accommodated a window for Islamic banking.

On the capital markets and securities, Tanzania has only Islamic bonds known as Sukuk which have been allowed since 2020. Sukuk, which normally can be issued by governments or corporates to raise money from investors for a period of time, is a sharia-compliant bond-like instrument that is part and parcel of the Islamic financing system.

However, up to the end of 2022, the value of issued Sukuk had reached Sh44.6 billion, Mr Issa said.

Global Sukuk issuance was set to hit $185 billion in 2022 and was projected to reach $257 billion by 2027, with the data suggesting that the market is there for Tanzanian investors to tap.

The recent issuance of the Sukuk in Tanzania has shown a high appetite for Sharia-compliant services. Last year, KCB Bank Tanzania also issued its first Islamic bond worth Sh10 billion, which was successful by 110 percent.