Interview: Abdulwahab Iesa Al Rushood

How do you assess the progress of economic diversification efforts, and in what ways might local Islamic banks contribute to this end?

ABDULWAHAB IESA AL RUSHOOD: The government has taken key steps to diversify the economy, enhance budget efficiency and work towards its transformation goals. These efforts include increased investment, the expansion of major development projects and the promotion of public-private partnerships (PPPs). Within this context, Islamic banks are well positioned to efficiently finance largescale development projects. They benefit from ample liquidity, which does not compromise profitability.

The Islamic finance industry has gone beyond core banking to become a driver of growth and economic diversification. KFH, for example, participates in the financing of major government projects, securing substantial funding for a diversified portfolio spanning critical sectors like energy, water, power, infrastructure and construction. Furthermore, our sponsorship of the second Kuwait PPP conference aligns with our strategy to support initiatives that facilitate the execution of mega-projects in line with the government’s directives and the pursuit of sustainable development goals.

Where do you see opportunities for Islamic banks to further support the private sector and promote the use of PPPs across the local economy?

AL RUSHOOD: The Kuwaiti market has significant potential in terms of development projects that align with the implementation of New Kuwait 2035. Islamic banks can play a pivotal role in various development priorities, including financing infrastructure projects, fostering the industrial sector, updating capital market regulations and investing in artificial intelligence. Moreover, the Islamic finance industry is well equipped to play a key role to support short- and long-term development priorities for Kuwaiti infrastructure, with many anticipated projects in the coming years – particularly with regards to small and medium-sized enterprises.

KFH actively supports and finances the Islamic banking industry through its Islamic banking operations and solutions. This contributes to economic diversification, employment opportunities for youth and participation in financing for large-scale projects.

In what ways can the domestic market attract further international investment?

AL RUSHOOD: To attract more international investors, it is essential to see more issuances from entities beyond banks. Large businesses and the companies operating under Kuwait Petroleum Corporation’s umbrella should consider utilising sukuk (Islamic bonds) for their funding needs. Hosting an annual investors’ event to facilitate interactions between institutional investors and potential issuers could boost international interest. Furthermore, efforts to enhance the business environment and bolster the country’s position in global competitiveness indices are essential to attracting international investment. This can be achieved by inviting foreign companies with significant capital to participate in mega-development projects, fostering partnerships and expanding tender invitations.

What are your projections for how Kuwait’s market share of the global Islamic finance industry will evolve in the medium to long term?

AL RUSHOOD: The Islamic finance segment is expected to sustain its growth in the coming period, with local banks playing a key role, as evidenced by the increase in the customer base of sharia-compliant banks. Islamic banks have demonstrated resilience by employing asset-backed approaches, enhancing their ability to withstand market risk and volatility. Kuwait ranks sixth globally in Islamic assets by value – totalling $153bn – which includes banks, takaful (Islamic insurance) companies, sukuk and Islamic funds. With advancements in the Islamic finance industry, it is likely that Kuwait’s market share will continue to expand.