Stakeholders in Islamic financing have expressed concerns that Nigeria is lagging behind peers in Islamic financing, explaining that the model is the best bet to drive the country’s economic growth and diversification goal.
Speaking at the maiden edition of Islamic finance outreach organised by the Institute of Islamic finance professionals at the weekend in Abuja, stakeholders said Islamic financing is a better source of funding for the government to diversify the economy, explaining that it has a governance structure put in place to ensure that funds are not diverted but channelled appropriately, and produces clearly seen results, unlike other alternatives.
Attahiru Maccido, the managing director/CEO of One17 capital limited, said Islamic financing can also drive investment in agriculture and other non-oil activities by ensuring access to credit. He added that Islamic financing can change the dynamics of small and medium enterprises (SMEs) by providing interest-free loans without collateral which is often a challenge to entrepreneurs, through intermediaries like the bank of industry among others.
He said, ” Access to funding plays a major role that can make or mar whatever government is trying to do, that is where Islamic financing can play a key role. We have seen historically, what the government have been doing with respect to the bonds they have been issuing out and many people have concerns over what the government has been doing with the funds that they have raised with the respect to the bond, you cannot clearly see it.
But, when they decided to go for Sukuk, we can see it visibly on all the roads, you’ll see a signboard that tells you the beginning of and end of the road that has been constructed. It shows that Islamic financing has integrity, whatever you say, you will do.
Deputy registrar, institute of Islamic financing professionals, Abdulakeem Akinbode, stressed that there are many opportunities in Islamic financing for both Muslims and non-Muslims hence, the institute have resolved to embark on public sensitisation and training to deepen the adoption of the model in Nigeria.
He said unlike in Nigeria, Islamic financing is well established in other parts of Africa, including countries that are predominantly Christians. Hence Nigeria needs more participants, operations and investors in the space.
“Islamic financing basically ensures that people’s interests are well covered and protected. It is based on mutual sharing of both the risks and the profits.
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Non-interest financing does not push the risk to clients, it shares the risks and opportunities with clients, thereby ensuring that your interest is covered, unlike the conventional,” he added.
In other parts of the world, Islamic finance is an established market. It is for all, this is an economic activity. Zambia is a predominantly Christian country, and Takaful which is insurance is adopted by 95 percent of the populace. It is still emerging in Nigeria, we need more participants.
Currently, we have four operators, we can have bigger numbers to play in the space, in the Islamic takaful, we have less than 10, we can have bigger operators to allow for easy accessibility. The number of people that have adopted Islamic finance is still low, which is signalling opportunities for investors, participants to match with other players in the world.
“We are here to sensitise the public of the opportunities in Islamic finance and also, as practice, how they can focus on Islamic finance to build their career.
Ibrahim Abdulakdir, the president Muslim lawyers association of Nigeria, argued that Islamic financing have continued to show resilience despite the challenges in the world in financial matters.
“Remember the 2008 global economic meltdown and even in the recent times, the reason is that their ethical base that IF does not go below. You don’t just sell things on paper, you have to be realistic, funds v to be invested in the real sector of the economy,” Abdulakdir added.
Acting president of the institute, Tajudeen Yusuf informed that the institute carries out four basic tasks including training of members to be up to date with Islamic finance knowledge skills and experiences, research, advocacy and consultancy for non-interest finance.
