Mwalimu National DT Sacco, Africa's largest savings and credit co-operative society by assets, officially launched a Shariah-compliant financial window named 'Mualim' on Wednesday, November 5, 2025, in Nairobi. This strategic initiative is designed to cater to the Sacco's substantial Muslim membership and tap into the burgeoning demand for ethical financial products in Kenya.

A Move Towards Financial Inclusion

The launch of Mualim, which means 'teacher' in Arabic, is a direct response to requests from members for financial products that align with Islamic law, which prohibits interest (riba). Mwalimu Sacco CEO, Kenneth Odhiambo, stated during the launch that the primary goal is to enhance financial inclusivity for all Kenyans. He noted that the innovation was part of a strategy developed two years prior to serve members who felt excluded from conventional financial products.

The Sacco's National Chairman, Joel Gachari, revealed that a significant number of their Muslim members, who constitute about 17% of the Sacco's 167,000 members, previously withdrew their deposits at the end of the year to avoid receiving dividends derived from interest-based loans. The Mualim window aims to rectify this by offering an alternative that allows members to save and access financing without contravening their faith.

To ensure strict adherence to Shariah principles, Mwalimu Sacco has established a separate business unit for Mualim, complete with its own bank accounts and a dedicated core system. An independent Shariah advisory council has also been instituted to oversee the operations and ensure all products are fit for purpose. The Sacco has invested in training its staff across its 22 branches and 14 satellite offices to manage the new products effectively.

Product Details and Market Context

While Mwalimu Sacco has confirmed the launch of the Mualim window, specific details regarding the features of the savings and financing products offered are yet to be publicly released. FURTHER INVESTIGATION REQUIRED. The Sacco's leadership anticipates that over 20% of its membership will adopt the new products within the first year.

The entry of Mwalimu Sacco, a titan in the cooperative sector with an asset base of over Ksh 64.43 billion as of the SASRA 2023 Annual Supervision Report, into the Islamic finance market is a significant development. This move is set to increase competition among Saccos offering Shariah-compliant products. Key players in this niche market include Taqwa Sacco, which was established in 1998 and offers a range of products including business loans, mortgage finance, and asset finance. Another notable competitor is Stima DT Sacco, which launched its 'Yasar' range of Shariah-compliant products, including Mudarabah, Murabaha, and Musharakah financing.

The broader Islamic finance sector in Kenya has been gaining momentum, supported by a regulatory framework that has evolved since the first fully-fledged Islamic banks began operations in 2008. Amendments to the Co-operative Societies Act and the Sacco Societies Act have paved the way for Saccos to offer these products, deepening financial inclusion for Kenya's Muslim population, which is estimated to be around 11% of the total population.

Future Outlook and Regional Significance

The global Islamic finance market is on a significant growth trajectory, with projections indicating it could reach between $6 trillion and $13.89 billion by 2026-2029, up from around $7.99 billion in 2024. This growth is fueled by a rising global Muslim population and increasing demand for ethical and socially responsible investments. Mwalimu Sacco's entry into this market aligns with Kenya's ambition to become a regional hub for Islamic finance.

The Sacco Societies Regulatory Authority (SASRA), which approved Mwalimu Sacco's new product line six months prior to the launch, is reportedly in discussions with the Sacco to build more regulatory capacity for this expanding segment of the financial market. The success of Mualim could serve as a blueprint for other large Saccos in Kenya and the East Africa region, potentially leading to a wider array of ethical and faith-based financial products for millions of co-operative members.