Kuwait Finance House (KFH), last updated on
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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 BankingIslamic 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 Islamic Difference
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