CRDB’s Sukuk democratises country capital markets

DAR ES SALAAM: CRDB Bank’s Al Barakah Sukuk is tipped to democratise the country’s capital markets, as the landmark dual-currency Islamic bond aims to expand inclusive investment opportunities in the country.

Mr Kikwete said during the launch event that the bond is a milestone in the country’s financial market landscape as will expand participation in the capital market and help to unlock capital for projects.

“It enables participation from a previously excluded segment of our population due to religious beliefs, by creating a shariah compliant investment avenue,” said Mr Kikwete who was the chief guest in the event.

The landmark dual-currency Islamic bond seeks to raise 30bn/- and 5.0 million US dollars, with green-shoe options that could bring the total to 40bn/- and 7.0 million US dollars.

The five years Sukuk adheres to Islamic finance principles and is aimed at promoting inclusive financial access and investment in ethical and socially responsible enterprises in Tanzania and the East African region.

“This is not just a win for financial inclusion, but a win for ethical development. I am confident that this bond will exceed expectations, just as CRDB’s previous landmark issuances have,” said Mr Kikwete.

The CRDB Al Barakah Sukuk is the third tranche under CRDB Bank’s five-year Medium Term Note Programme worth 300 million US dollars, approved by the Capital Markets and Securities Authority (CMSA). The Sukuk follows the Kijani Bond and the Samia Infrastructure Bond, both of which were oversubscribed.

CRDB Bank Group CEO and Managing Director Abdulmajid Nsekela said the bond reflects the belief that finance must be inclusive and responsive to the needs of every Tanzanian.

“Through this Sukuk, we are opening doors for more people to participate in capital markets without compromising their faith or values. It is also a catalyst to unlock capital for projects that are ethical, sustainable and beneficial to communities,” said Nsekela.

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He said the proceeds will fund ventures that are ethical and non-harmful to human well-being, in accordance with Sharia principles, including healthcare, halal agribusiness, education and environmentally friendly manufacturing.

The bond offers a return of 12 per cent per annum for shilling investors and 6.0 per cent per annum for dollar investors, with profit distributions made quarterly. The minimum investment is 500,000/- or 1,000 US dollars and the investment window closes on September 12.

The British International Investment (BII) is the anchor investor. British High Commissioner to Tanzania, Marianne Young, said this financing further strengthens the economic ties between the UK and Tanzania.

“The UK is proud to stand alongside Tanzania in driving innovation in sustainable finance. Through British International Investment, we are supporting CRDB’s bold leadership in introducing Tanzania’s first Islamic bond at scale,” said the High Commissioner.

The bond is also BII’s first Islamic finance product globally.

“This Sukuk will create new pathways for inclusive growth by offering ethical, accessible investment options that benefit the real economy,” said Ms Young.

CRDB Bank Chairperson, Professor Neema Mori said more importantly, the bond opens a legitimate path for those who have long been excluded from traditional investment vehicles due to religious principles.

“This is financial inclusion in its purest form,” Prof Mori said.

The Chairman of the Bank’s Sharia Advisory Board Abdul Van Mohammed said the bond offers a bridge between faith and finance.

“It reflects the depth of CRDB’s commitment to Sharia governance and ethical investment,” Mr Van Mohamed said. BII Director of Investment Jumai Mohammed said the Sukuk aligns with the institution’s commitment to responsible investing and expanding access to finance in Africa.

“This Sukuk exemplifies how capital markets can serve a greater purpose – driving inclusive and values-based economic growth,” said BII Director.

In a joint statement, CMSA CEO Nicodemus Mkama and Dar es Salaam Stock Exchange CEO Peter Nalitolela said the launch and listing of the CRDB Al Barakah Sukuk represent a significant leap forward in diversifying the country’s capital markets.