Hot on the heels of releasing a circular on sustainable finance for the banking industry, Central Bank of Kuwait (CBK) has announced that priority will be given in its regulatory sandbox to test fintech products and services that support the sustainability agenda.
It is hoped that by prioritizing ESG finance solution testing in the sandbox, the Kuwaiti financial system would benefit from more innovative sustainable fintech solutions which would subsequently enhance the adoption of social and climate-related financial instruments.
The circular, which serves as guidelines on sustainable finance for the banking industry, was released this month. The document, which has been designed in line with the New Kuwait Vision 2035 and integrates the principles of the UN SDGs, defines sustainable finance as well as outlines ESG benchmarks and forward principles.
CBK’s steely ESG focus coupled with its robust Islamic banking system and digitalization ambitions may be a boon to its Islamic fintech sector. Like the traditional Islamic banking sector, Islamic fintech start-ups are increasingly leveraging and integrating ESG into their business proposition to appeal to a wider audience.