Press Release
Nairobi, July 31, 2024 – Linzi FinCo, which made history as Kenya’s first entity to float a Shariah-compliant SUKUK at the bourse, has been listed in the Nairobi Securities Exchange (NSE).
In May this year, the Linzi Sukuk, a Ksh3 billion Islamic Secured Residential Lease-Based Security, was admitted to the NSE's unquoted securities platform, issued by Linzi FinCo Trust.
The 15-year Sukuk offers an attractive internal rate of return of 11.13% and will fund the construction of over 3,000 affordable institutional housing units, supporting the government's affordable housing agenda.
Using the innovative financing mechanism, this construction is expected to create about 3,000 direct jobs and tens of thousands of indirect employment opportunities across the country.
Linzi FinCo is a subsidiary of the diversified financial services firm, Liaison Group.
"By tapping into the potential of pension funds and the growing Islamic finance market, we aim to revolutionize the housing sector and drive sustainable economic growth," said Liaison Group Managing Director Tom Mulwa, describing the listing as a pivotal moment for Kenya.
Mulwa emphasized the immense potential of infrastructure investments, particularly in housing, and highlighted the pension industry's role in unlocking over Ksh 1.5 trillion for housing development in the next five years.
“We see immense potential in infrastructure investments, particularly in housing, rail, roads, ICT, water and sanitation, and ports. By mobilizing pension investments, we can significantly contribute to these sectors and create lasting impacts.”
“The pension industry holds the power to unlock substantial investments in housing. We estimate that over Ksh1.5 trillion can be mobilized in the next five years, fundamentally transforming the housing landscape in Kenya,” said Mulwa.
Linzi FinCo is committed to integrating Sustainable Development Goals into its investment strategy, ensuring a positive impact on the community.
Sukuk bonds are Islamic financial certificates that comply with Sharia law. Unlike conventional bonds, which represent a debt obligation, Sukuk represents ownership in a tangible asset, service, project, business, or joint venture. This ensures that the investment is asset-backed and provides a return without involving interest, which is prohibited under Islamic law.
The listing of Linzi FinCo broadens the range of asset classes available on the NSE and attracts potential investors interested in Sharia-compliant products like Sukuk.
“We at CPF being the Lead Arranger for the inaugural Sukuk Bond at the NSE, are proud of this landmark achievement in ethical finance. This Sukuk issuance is a strategic milestone that strengthens our investment portfolio while fostering socio-economic development in our communities. By adhering to Islamic principles and Ethical investments, we are sure to deliver sustainable value to stakeholders and are enthusiastic about the opportunities this partnership creates. Furthermore, we remain committed to pioneering more innovative financial solutions in the market.” said CPF Group Managing Director/CEO - Dr. Hosea Kili, OGW
“By leveraging Sukuk for infrastructure and housing projects, issuers can tap into a broader investor base, align financing with ethical and sustainable principles, and benefit from the inherent stability and long-term nature of Sukuk financing,” Mr. Frank Mwiti, Chief Executive, NSE noted.
Boiler Plate
About Liaison Group
Founded in 1981, LIAISON GROUP is an independent non-banking financial services Organization that has been at the forefront of Risk & Insurance, Healthcare, Pensions and Investments Advisory. Through a comprehensive suite of service offerings in our Investment Advisory arm, we offer transaction advisory services on non-vanilla capital market offering such as Asset Backed Securities, Asset Based Securities, Municipal Bonds, Real Estate Investment Trusts and Sukuk offerings. The firm has a deep understanding of securitised structured finance and of Islamic finance and is committed to providing its clients with innovative funding solutions. The value we create is driven through by the personal determination of our highly motivated and skilled staff in Africa. At LIAISON GROUP we pride ourselves on our ability to provide a service built on expertise, responsiveness to clients’ needs and credibility in our business.
About NSE
The Nairobi Securities Exchange (NSE) is the principal securities exchange in Kenya. It offers a world class trading facility for local and international investors and issuers looking to gain exposure to Kenya’s and Africa’s economic growth. NSE plays a vital role in the growth of Kenya’s economy through mobilization of domestic resources and international capital. The NSE is a founder member of the African Securities Exchanges Association and the East African Securities Exchanges Association. It is a full member of the World Federation of Exchanges and the Association of Futures Markets, and also a partner Exchange in the United Nations Sustainable Stock Exchanges Initiative (SSE). NSE operates under the regulatory jurisdiction of the Capital Markets Authority of Kenya.
About CPF Group
The CPF Group offers a comprehensive range of services in Retirement Benefits Schemes Administration, Fund management, Technology solutions, Insurance Brokerage, Property Services, Trust Fund Services, Archival Services, Wealth Management, Payments Platform, Transaction Advisory, Training, and Management Consulting. As an Administrator, CPF Financial Services administers both private and public pension funds; notably - the Public Service Superannuation Scheme (PSSS); The Local Authorities Pensions Trust (LAPTRUST), the County Pension Fund, Taifa Pension Fund and CPF Individual Pension Plan. The Net Fund Value of the pension funds under the administration of CPF Financial Services is approximately Kshs 170 billion and have a total membership of just over 500,000 members.
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