Stima Sacco Launches Shariah Compliant Banking Products

Stima Sacco becomes the first Conventional Licensed Saving and credit cooperative society in Kenya to launch new Shariah Compliant products in the Kenyan market in a bid to increase shareholder returns and grow its business. This will see a growth in Membership especially from the Muslim communities both locally and in the Diaspora that have been reluctant to join local Saccos due to non-compliance with Sharia Banking principles.

The Launch was graced by Mr. Ali Noor Ismail the Principal Secretary, State Department for Co-operatives, Ministry of Industry, Trade and Co-operatives. This Occasion was attended by Muslim delegates drawn from various regions across Kenya. All the delegates and guests present applauded the Stima Sacco’s effort to see the full implementation of Sharia banking.

Among the products launched include:

A.  Yasar Membership ( Partial and Full individual membership )

Yasar Membership (Shariah Compliant) is open to all Kenyans 18 years and above who reside both locally and in the diaspora. Eligible members are required to Complete Shariah membership application form and attach: Copy of National Identity card/ valid East African/ Kenyan Passport, Recent colored passport Photo, Copy of KRA PIN Certificate. Payments include; Registration Fee- 500/-; Minimum Yasar Share capital 25,000/-; and Minimum monthly Yasar Mudarabah alpha deposit contribution 1,000/- Kenya shillings. Financing eligibility after 3 months.

B.  Saving Products

1.   Yasar Share Capital- Which represents a member’s ownership of the equity. The nominal value for each Share is Ksh. 500/-. Every member shall hold at least one share in the Society, subject to the minimum shares as shall be stipulated in the Membership Policy. The current Minimum amount for Individual membership categories is Kshs 25,000/-. Members earn annual profits.

2.   Yasar Mudarabah Alpha Deposit Accounts - Deposit accounts (non-Withdrawable) shall be patronised by Stima Sacco Shariah account holders in accordance with the regulations and policies of the Society. These deposits may be used as collateral against accessing financing from Stima Sacco and shall only be refunded when a member withdraws from his/her membership provided the member has fully repaid his/her debts and is free from guarantorship. Deposits shall be contributed on a monthly basis and in such amounts as stipulated in the Sacco policy. Current Minimum Monthly deposits is Kshs 1,000 for Individual membership category. The deposit accountholder shall sign a Mudarabah contract and in particular the Mudarabah shall be al-Mudarabah al- mutlaqah (unrestricted Mudarabah). Members earn annual profits.

3.   Yasar Qard Prime/Current Account - This account is a transactional current account that allow salary, facility processing, cheque clearing, Electronic funds transfers, real time gross settlement, and standing orders. Accountholders will enjoy zero ledger fees. Minimum balance is Kshs 500/-. Account shall be accessible by ATM, Cheque book, M-PAWA mobile banking service. Accountholders will enjoy free access to account statements via the web portal. The member shall sign a Qardh contract.

4.   Yasar Mudarabah Investment Account- Minimum amount to invest shall be Kshs 5,000/-. Savings is done for 1, 3, 6 or 12 months, with an option for renewal. The accountholders will enjoy zero monthly charges. Profit shall be determined at the end of the period based on income generated from the Sharia Compliant investments. The products will also provide an opportunity for the member to save and borrow wisely in a just, fair and transparent manner.

C.  Financing Facilities

1.   Yasar Murabaha Personal Finance Facilities – This will enable our members access facility to purchase tangible items such as: Auto Finance (includes Motor Vehicles Accessories and Spare parts) Plot Finance, Personal Finance for various assets, Stock/ Working Capital Finance, Asset Finance, Building materials, Farm equipment & inputs among other tangible assets. Facility shall be given to individuals who have been members of the Sacco for at least three (3) months. The Sacco shall include its mark-up on the facility based on the CBR rate plus a margin of 4.0%.

2.   Yasar Diminishing Musharakah Finance - This product targets members who want to purchase new / used motor vehicles, home/commercial premises and for asset financing. This product is a Diminishing Musharakah based on Shirkat Ul Milk. The percentage of financing shall /is proposed at 80% for new vehicles and 70% for used vehicles not more than seven (7) years old with a repayment period of 48 months and 36 months for new vehicles and used vehicles respectively. For other assets maximum repayment period shall be 60 months. Stima Sacco shall include its mark-up on the facility based on the CBR rate plus a margin of 4.0%.

3.   Tawarruq based Yasar Products- This product targets members who want to access personal finance that might not be necessarily asset backed. The product shall finance the following: take-over of interest-based loans, finance educational and medical expenses, restructuring existing Murabaha/Financing deals to provide liquidity, bill encashment/discounting for corporate clients, genuine business requirements such as salaries & taxes which cannot be financed by other modes, paying creditors or debt and financing Insurance premium. Stima Sacco shall include its mark-up on the facility based on the CBR rate plus a margin of 4.0%. Maximum facility repayment period is 60 months.

4.   Salam based Yasar Products- This product targets members who want to access personal finance that might not be necessarily asset backed. This is similar to Tawarruq and uses the same commodity platform, however with Salam the disbursements occurs immediately after approval of the facility. The Sacco then procures through its agent a Salam commodity via an international exchange platform, the agent then sells the Salam Commodity at Cost plus a mark –up. The Customer through another agent then disposes the Salam Commodity through and the proceeds of sale are credited into the Customer’s account at the Sacco. Stima Sacco shall include its mark-up on the facility based on the CBR rate plus a margin of 4.0%. Maximum facility repayment period is 60 months.

1. Other Products in the pipeline: Future Istisna & Ijarah based Yasar Products