The Non- Interest Fund, one of the multi-fund structures on the Contributory Pension Scheme (CPS) due for launch in the last quarter of this year will deepen financial inclusion, Dave Uduanu, managing director/CEO, Sigma Pensions has said.
He said that given that large Muslim population which the product target, there is huge potential acceptability in that space.
The Non-interest Fund, which is Fund VI under the Multi-fund structure introduced by the National Pension Commission (Pencom), is for contributors who choose to have their pension contributions invested in Non-interest Money and Capital Market Products.
In his speech at a virtual conference to promote ethical investments in Nigeria on non- interest investing hosted by Sigma Pensions held recently, Uduanu stated that when launched, the Non-interest Fund will boost investments in the nation’s non-interest finance sector.
Uduanu said: “The Islamic finance global market has been expanding rapidly in recent years, recording 1520 per cent annual growth, and is estimated to be worth $3trillion, and the industry is gaining wider recognition in Nigeria.
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“The Non-interest Fund will take off in the fourth quarter of this year. It will boost interest in non-interest finance and also deepen financial inclusion in Nigeria given the country’s large Muslim population that are not participant yet in other ethical fund investments, so this is the right opportunity, he said.
The Sigma Pensions boss called on ethical investors to tap into the many investment opportunities which, according to him, abound in the country.
He stated that when it takes off, the Non-interest Fund will be a positive development for the pension industry, adding that Nigeria was probably the only country with a large Muslim population that does not currently have such an ethical Fund.
Also speaking at the conference, the guest speaker and MD/CEO, Lotus Capital, Hajara Adeola, commended Sigma Pensions for providing a platform for increasing public awareness about noninterest finance.
She stated that ethical investors in the country now have a lot of investment opportunities unlike in the early days of the industry when it was difficult for them to find such opportunities, adding that: “We cannot separate our faith from our finances.”
Adeola, who attributed increased public acceptance of non- interest finance to the support of regulatory authorities, such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission ( SEC), the National Insurance Commission ( NAICOM) and Pencom, predicted that the sector would enjoy even wider acceptance when the Non-interest Fund takes off.
She, however, stated that in order to ensure continued expansion of the Non-interest finance market, operators in the industry should step up their investments in educating members of the public and raising their awareness about the alternative financial system.
Umar Farouk Aminu, commissioner, Administration at the National Pension Commission (PENCOM) disclosed that the Commission was: “Currently fine-tuning an operational framework on Non Interest Fund with the objective of establishing standard and procedures for the management of Fund VI.”
He added: “The Financial Regulatory Advisory Council of Experts (FRACE) had formally certified the draft framework as being in compliance with non- interest (Islamic) finance principles.”
Abdulkadir Abbas, head of Department, Securities and Investment Services at SEC, , said that the commission was looking at how to deepen and encourage product development and innovation in the non- interest finance market. He disclosed that SEC was currently reviewing several sukuk proposals
