Kuwait Finance House (KFH) is a pioneer of the banking phenomenon known as Islamic Finance or Shari’a compliant banking. We were the first Islamic bank established in the State of Kuwait and today we are one of the foremost Islamic Financial Institutions in the world.
From its inception in 1977, KFH has grown into a robust banking and financial institution, as well as a leader in the Islamic financial industry. KFH is now a market leader not only in the Islamic banking industry, but also in the banking sector as a whole, providing a wide range of Shari’a compliant products and services covering banking, real estate, trade finance, investment portfolios and corporate, commercial and retail financial markets.
Concept of Islamic Banking
The Islamic Difference
Islamic banking refers to a system of banking, which is consistent with religous law called Shari’a, and guided by Islamic principles on economics. The cornerstone of Islamic banking and finance is fairness and mutually beneficial relationships. We at KFH provide services that exemplify those values.
The main differentiating factors of the Islamic banking system are the sharing of risk and the prohibition of “Riba” (usury/interest). Islamic law prohibits interest based dealings that tend to exploit those in financial need. Instead, transactions based on sharing of risk are promoted as a way of encouraging cooperation for mutual benefit and establishing more equitable terms and fair dealing.
A number of services have been modernized and standardized to meet the various needs of customers, while maintaining the ethical boundaries embodied in the tenets of the Islamic faith. Among these services are:
- Murabaha – trade with markup or cost plus sale
- Mudaraba – profit sharing agreement
- Musharaka – equity participation
- Leasing (Ijara Wa Iqtina) – renting for beneficial use
- Salam and Parallel Salam – deferred sale contracts
- Istisna’a and Parallel Istisna’a – project finance
- Sukuks – Islamic bonds
The Growth of Islamic Finance Industry
- 300+ Sharia’ compliant financial institutions worldwide.
- 1 Trillion USD in estimated managed assets as of end 2008.
- 23.5% Average growth in the last 5 years.
- 1.5 Trillion USD expected volume of managed assets by 2013.
- 4 Trillion USD potential for Islamic financial services by 2020 where Muslim population is expected to reach 2.5 billion worldwide & Islamic banks are expected to manage 40 - 50 % of the total savings.
Global KFH Awards
- Most Trusted Islamic Bank from World Finance
- Most Valuable Banking Brand in ME from The Banker
- Best Islamic Bank in the Middle East from Euromoney
- Best Islamic Real Estate Finance House from Euromoney
- Best Bank from The Banker (Financial Times)
- Best Deal from Global Finance
- Best Islamic Bank in GCC from Global Finance