How Shariah financing is reshaping SME expansion in Kenya’s high-impact sectors

For years, Kenya’s Muslim entrepreneurs, many of whom run the country’s active small and medium-sized enterprises (SMEs), have navigated a financial system that did not fully reflect their values or business realities.

Today, however, Shariah-compliant financing is gaining traction, offering not just ethics-based alternatives but increasingly competitive and flexible financial solutions.

It is also emerging as a structurally supportive option for high-impact sectors such as transport, construction and agriculture.

To paint a picture of the above scope, The Eastleigh Voice interviewed Ismail Soliman, the Chief Executive Officer of Almasi Financial Services, one of the country’s fastest-growing Shariah-compliant financial providers for corporations and SMEs.

Since its establishment in 2021, the firm has emerged as a critical player in bridging the long-standing financing gaps for underserved businesses, especially new firms, first-time equipment buyers and the Muslim entrepreneurial community.

Ismail says Almasi’s model was built to respond to a gap that mainstream financial institutions have not sufficiently addressed.

While conventional banks have slowly introduced Islamic products, he reckons that the pace has not matched the rapid growth of Muslim-led business segments.

This mismatch, he notes, has forced many high-potential enterprises to either seek expensive alternative financing or operate outside formal systems altogether.

When asked what distinguishes Shariah’s offering from conventional business loans, Ismail explains that they differ in terms of structure and mission.

In asset financing, for instance, he says the firm uses the hire-purchase model anchored on Islamic principles similar to Ijara wa Iqtina.

“In this arrangement, Almasi retains ownership of the asset as the owner (the lessor), while the customer acts as the hirer (the lessee). Under this arrangement, the customer makes rental (Ijara) payments over an agreed period, and at the end of the term, ownership of the asset is transferred through a separate sale contract,” Ismail said.

He adds that such products remain free of early settlement charges or late penalties, unless directed entirely to charity, ensuring continued compliance with Islamic finance rules.

Notably, Ismail says it is a model that has now resonated strongly in the market.

“We take pride in the confidence that the Muslim business community in Kenya has placed in our Sharia-compliant solutions. This segment now represents approximately 50 per cent of our total portfolio.”

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• Islamic Banking
• Shariah
• Shariah-compliant listed funds
• Shari’ah-compliant bank
• Shariah-compliant financing
• Almasi Financial Services
• How Shariah financing is reshaping SME expansion in Kenya’s high-impact sectors
• Business

Shariah, a driver of financial inclusion

For Kenya’s Muslim entrepreneurs, adherence to Shariah principles in finance is not a preference; it is a necessity.

Many operate sizable transport fleets, construction firms, logistics companies and retail businesses, yet hesitate to take on conventional debt that involves interest (riba).

This has historically narrowed their access to capital, thereby limiting business expansion.

Ismail says this gap presents a compelling opportunity, a chance to expand inclusion by giving entrepreneurs ethical financing that mirrors their values.

He believes this has enabled more firms in transport and construction, two sectors that form the backbone of Almasi’s portfolio, to formalise operations and scale sustainably.

But compliance alone does not explain the firm’s traction.

Almasi has intentionally embedded structural value-adds into its products, recognising that many SMEs face operational volatility, seasonal cash flows, and unpredictable market cycles.

According to Ismail, the firm structures every product around a business’s unique operational realities.

This includes flexible payment schedules, moratoriums where needed, and financing terms that accommodate seasonal income patterns.

“We conduct detailed analyses of cash flows, operational cycles, and sector dynamics,” he explained.

Ideally, this is intended to allow the company to design instruments that do more than fund assets; protect SME’s cash position, support smoother project execution and reduce financial strain during the early months of business growth.

Beyond lending, Almasi also provides ongoing advisory support before and after financing, guiding clients on decisions that strengthen sustainability and profitability.

Trust builder

Even as demand for Islamic financial solutions rises, concerns around authenticity and governance remain key.

Ismail acknowledges this and says the institution is taking steps to reinforce credibility.

The firm plans to have all its products independently reviewed and certified by Shariah scholars representing Kenya’s diverse Muslim communities by 2026.

It has also begun forming an independent Shariah Committee to supervise compliance from product development to implementation.

Ismail describes their approach as a commitment to transparency and inclusivity.

“Our vision is to establish a robust, transparent, and inclusive framework that guarantees full compliance and strengthens customer confidence.”

This aligns with the country’s recent move to bolster its Islamic finance ecosystem through the launch of the Association of Shari’ah Compliant Service Providers of Kenya.

Spearheaded by Absa Bank, the new umbrella body seeks to close regulatory and operational gaps that have long slowed the sector’s growth.

According to Tego Wolasa, the head of Islamic Banking at Absa Bank Kenya, Islamic finance has expanded steadily over the past 20 years in the country; however, progress has been hampered by fragmented legal frameworks and limited awareness.

“Over the last 20 years, we have had Islamic Banking, which was pioneered by Absa. However, despite making a lot of strides forward, we've had huge gaps,” Wolasa said.

“In Kenya, we do not have an Islamic banking Act or any law governing Islamic finance in general, from banking to insurance, to Islamic pensions, to the Islamic capital market,” he added.

A key mandate of the new association is to lobby for a dedicated legal and regulatory framework that recognises the unique operating model of Islamic finance.

Partnerships that expand SME capacity

Almasi’s strategic alliances have been central to its growth, particularly its longstanding collaboration with equipment dealer Mantrac.

Since 2021, the two companies, both under the Mansour Group, have jointly supported dozens of SMEs acquiring Caterpillar machinery.

The partnership integrates Mantrac’s technical expertise with Almasi’s tailored financing, giving customers a smooth experience from equipment selection to final ownership.

The scale of the partnership is notable.

Mantrac accounts for about 20 per cent of Almasi’s financing portfolio, while Almasi supports nearly one-third of Mantrac’s annual machine sales.

As part of this broader ecosystem-building, Mantrac recently facilitated a technical experience in Málaga, Spain, for customers across Africa, including 11 from Kenya, reinforcing the value of partnerships in upskilling SME clients and exposing them to global technologies.

Looking ahead

Almasi is now preparing to expand into new growth sectors.

Its real estate financing product awaits approval from the Central Bank of Kenya (CBK) under the upcoming Non-Deposit Taking Credit Provider license.

The firm has also begun building capacity for agricultural financing, with solutions expected by the second quarter of 2026.

Additionally, it is exploring green energy financing through partnerships with international funds aligned with the Mansour Group’s sustainability strategy.

For Ismail, these expansions reflect an overarching principle, growing alongside customers.