Africa’s First Sukuk Fully Repaid by KCB Tanzania

KCB Bank Tanzania Limited has announced the successful full repayment of its historic KCB Fursa Sukuk, the first publicly listed Shariah-compliant bond in the history of the African continent’s financial sector.

The announcement by the bank, which was approved by the Capital Markets and Securities Authority, disclosed the successful repayment of the Sukuk in full upon the scheduled maturity date on the 22nd of December 2025.

The bank announced the successful repayment of the Sukuk as a fulfillment of its financial obligations to the investors.

KCB announced that the Sukuk generated consistent returns for the investors over the period of time the investors had invested in the Sukuk.

The announcement disclosed that the repayment of the Sukuk marks the end of a successful three-year investment period.

“KCB is pleased to announce that the KCB Fursa Sukuk was successfully repaid in full to all participating investors following its scheduled maturity date on 22nd December 2025,” the announcement disclosed.

Strong Investor Uptake and Market Performance

The Sukuk, approved on October 25, 2022, was issued with a three-year tenor and a profit return of 8.75 percent annually on a quarterly basis.

According to the bank, the offer was a success as it raised TZS 11 billion against a target of TZS 10 billion, indicating a 110 percent subscription rate.

“The bond raised TZS 11 billion, compared to a plan of TZS 10 billion, a success of 110 percent,” KCB said, emphasizing a strong investor appetite for Shariah-compliant financial products in the region.

KCB Fursa Sukuk was listed on the Dar es Salaam Stock Exchange on January 13, 2023.

The listing made it the first Shariah-compliant Sukuk bond to be listed on a Sub-Saharan African exchange.

This move made Tanzania a pioneer in increasing Shariah finance products within the region.

Supporting SMEs and Financial Inclusion

The funds raised from the issuance of the Sukuk were used to finance small and medium-sized enterprises that were Shariah-compliant, which is a priority for the country’s economy.

The bank further stated that the funds were used to support entrepreneurship and business growth in the country.

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“Proceeds from the Sukuk were deployed to finance small and medium-sized Shariah-compliant enterprises (SMEs), thereby supporting entrepreneurship, business expansion, and inclusive economic growth,” the bank stated.

The move is also in line with the country’s Third National Financial Inclusion Framework (NFIF II) 2023-2028 strategy, which aims at increasing access to various financial products and deepening the country’s financial system.

Regulatory and Institutional Support

KCB acknowledged the role of multiple institutions in ensuring the success of the Sukuk issuance and repayment.

The bank credited the Capital Markets and Securities Authority for regulatory oversight and market facilitation.

“KCB acknowledges the pivotal role played by the Capital Markets and Securities Authority (CMSA) as a key enabler of innovation and market development,” the statement said.

Additional recognition was extended to the Bank of Tanzania and the Dar es Salaam Stock Exchange for their guidance, alongside transaction advisors and partners including financial, legal, and reporting entities that supported the issuance process.

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Investor Confidence and Market Impact

KCB thanked investors for their participation and trust in the institution, stating that it was a testimony to investor confidence in Sukuk securities as well as Islamic banking products.

“The appreciation is also extended to valued Sukuk investors for the trust and confidence in KCB,” said the bank, adding that it strengthens the capital markets ecosystem.

The bank also stated that it issued the Sukuk through its Islamic banking window, KCB Sahel Banking, as a strategy to diversify its products.

Looking Ahead

With the successful closure of the KCB Fursa Sukuk, market analysts expect increased interest in Islamic finance instruments across East Africa, particularly as governments and financial institutions explore alternative funding mechanisms.

“KCB would also like to extend its gratitude to all other parties involved in making KCB’s first Sukuk issuance a success,” the statement concluded.

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KCB Group PLC during the unveiling of it KCB Fursa Sukuk bank in Tanzania. PHOTO/ KCB