Again, the answer depends critically on whether there is some kind of asymmetry, whereby the eventual increase in spreads either is more abrupt, or has a larger effect on the real economy, than the initial compression. In table 1 and figure 2, I present some new evidence that bears on this asymmetry.
At the local level too, Sharia compliant banking is notably beginning to take root. Kenya currently has two fully fledged shariah compliant banks and a number of conventional banks have been granted approval to roll out Shariah Compliant Products. Kenya has also pioneered in the sharia compliant insurance and re-insurance segments.