Faith-based or value-based investing is a subset of socially responsible investing (SRI), which is a broader
term that encompasses various investment strategies that consider the environmental, social, and
governance (ESG) impact of the companies or funds that they invest in.
Faith-based investors may avoid or seek certain industries or businesses based on their faith, or follow religious principles of finance. For example, some Christian investors may avoid investing in companies that are involved with tobacco, alcohol, gambling, or adult entertainment, as they believe these activities are sinful or harmful to society.
Some Muslim investors may follow the Islamic law of sharia, which prohibits interest, speculation, gambling, and
investing in industries that are considered haram, such as pork, alcohol, or weapons. Some Jewish investors
may adhere to the Jewish law of halakha, which forbids investing in companies that violate the Sabbath,
exploit workers, or harm the environment.
Faith-based investing can have several benefits for the investors and the society. First, it can help the
investors achieve both financial and spiritual goals, as they can align their investments with their values and
support the causes that they care about. Secondly, it can reduce the risk of investing in unethical or
unsustainable businesses that may face legal, regulatory, or reputational challenges in the future.
Thirdly, it can create positive social or environmental impact by encouraging businesses to adopt more responsible practices and by supporting the development of sectors that contribute to the common good, such as clean energy, health care, or education.
However, faith-based investing also faces some challenges and limitations. One challenge is the difficulty of
measuring and verifying the impact of the investments, as there may be a lack of reliable data, standards, or
ratings on the ESG performance of the companies or funds. Another challenge is the diversity and complexity
of the religious views and preferences of the investors, as there may be different interpretations, opinions, or
levels of tolerance among the followers of the same faith or denomination.
Another factor that can influence the value of the investments in a company is the charismatic leadership of
the management. Charismatic leaders are those who have a strong vision, charisma, and personal abilities
that enable them to inspire, motivate, and influence their followers. Charismatic leaders can have a positive
or negative effect on the value of the investments, depending on how they use their power and position.
On the positive side, charismatic leaders can enhance the value of the investments by creating a clear and
compelling vision for the company, by fostering a culture of innovation and excellence, by attracting and
retaining talented and loyal employees, and by building trust and confidence among the stakeholders.
On the flip side, charismatic leaders can diminish the value of the investments by pursuing risky or unrealistic
strategies, by ignoring or suppressing dissenting voices, by engaging in unethical or illegal behaviors, or by
creating a cult of personality that alienates or exploits the followers.
The impact of religion on the Kenyan investment landscape is significant, given that Kenya is still in a
superstitious and religious phase. According to the Pew Research Center, Kenya is one of the most religious
countries in the world, with 88% of the population identifying as Christian, 11% as Muslim, and 1% as other
religions. Religion plays a major role in the social, cultural, and political life of the country, as well as in the
economic and financial activities.
Religion can affect the Kenyan investment landscape in several ways. Religion can create opportunities for faith-based investing, as there is a large and growing demand for products and services that cater to the religious needs and preferences of the consumers, such as Islamic banking, Christian microfinance, or halal food. Second, religion can create challenges for foreign or secular investors, as they may face cultural or legal barriers to enter or operate in the Kenyan market.
Lastly, religion can create uncertainty and volatility for the investment climate, as it may fuel political or social conflicts, such as the ethnic violence that followed the disputed 2007 election, or the terrorist attacks by the Islamist group al-Shabaab.
