Nigeria: 'How Islamic Finance Can Succeed in Country'

AllAfrica.com:Professor Mohamed L. Bashar, an Islamic finance and economics lecturer and a board member, Lotus Capital Limited has advocated for a defined regulatory framework to propel the growth of Islamic financing in Nigeria.

Professor Bashar who spoke in Lagos at the first edition of the Lotus Capital seminar series with the theme: Islamic Finance: An alternative approach to project finance and infrastructure development noted that Nigeria represents a huge prospect for Islamic finance system but what is lacking to drive the sector is appropriate legislation.

He saod based on his experience, Nigerians are craving for the system that forbids interest regime and bars investing in immoral activities or businesses that are injurious to man.

The guest speaker at the occasion, professor Monzer Kahf however noted that legislation may not necessarily be the biggest impediment but political will.

According to him, some, if not all of the legislations for the conventional system doesn't necessary affect Islamic financing, arguing that Islamic financing by default meets all the requirements.

Professor Kahf an internationally acclaimed Islamic Finance guru and Chairman of the Sharia'ah Advisory Board of Lotus Capital also said Islamic finance remains the best and cheapest means to source funds to finance long term development projects.

Kahf, who took participants through the nitty-gritty of Islamic finance also said the system doesn't compromise on standards and right investment options.

He said the system doesn't accept debt rescheduling or buy back; it doesn't accept or give interest bearing loans that are speculative and the system always emphasis value addition.

The second speaker, Neo Miller, another Islamic finance expert from the UK also spoke of the usefulness of Islamic financing.

In the UK for instance, he said the vista has helped finance the biggest UK real estate deal, the £2.5 billion Chelsea Barracks deal.UK also, he said is leveraging on Islamic finance instruments to build the tallest building in Europe.

Miller who spoke on the legal concerns of the concept also noted that, Nigeria Islamic finance laws should be integrated into existing local laws for adaptability.

The Chairman of Lotus Capital Fola Adeola said Islamic finance presents fresh alternatives to financing here and thus Nigerians should take advantage of it.

Nigeria: IMFB Introduces Islamic Banking

Chris Agabi :: The Integrated Micro Finance Bank has introduced Islamic banking in its financial and investment products.

Speaking in Lagos, Wednesday, Managing Director and Chief Executive Officer of the Bank Mr. Simon Akinteye said one of its products which is shariah compliant is the Ijara. This, he said will be based on daily contribution from the leased products and the bank, as well as the investor's share in the profit.

He said it is leasing without interest but that the interest will be shared into three parts and the bank will take just one part while the customer takes two parts.

The other two Islamic products are: Musharaka Marana and Musharaka Nasat which would be the contribution of 12 weeks.

He said on this, the investor would be giving double the amount to invest and subsequently the profits would be shared with the bank and him.

He said the products would cater for Nigerians who wouldn't want to do conventional banking.

The bank also said it is deepening the capacity and finances of the over 70 million poor Nigerians most of which are women and youths.

She said women particularly are impoverished in Nigeria even though hard working, hence the need to improve their finances. Launching the products, the

Speaking on another new product that was launched, Mr. Akinteye said: "The Business equipment Leasing Account (BELA) product would be useful to anyone who is ready create economic value to the least income generating assets like wheel barrows, generators, refrigerators, hair dryers, barbing saloon complete kit, vulcanizing machines grinding machines etc."

Nigeria: N11tr Invested in Islamic Banks World Wide

Deputy Governor of the Central Bank of Nigeria (CBN) in charge of operations, Alhaji Suleiman Barau, has said that more than N11 trillion (150 billion US dollars) has been invested in Islamic banks in various parts of the world.

Barau disclosed this in Abuja in a paper entitled, "Quran: Basis for Investment", which he presented at the 5th Nigerian Muslim Merit Award presentation ceremony.

He said that the investments in Islamic banking had shown an upward trend that would grow from 10 to 15 per cent every year.

He said that "the Islamic banking differs from commercial banking because it does not allow interest charges".

According to him, more than 300 institutions now have Islamic banking windows across Europe, Asia, North Africa and America.

Barau, however, said that the Muslim community in Nigeria had not raised the

needed N25 billion to start an Islamic bank.
He said that the CBN was disposed to the idea of an Islamic bank that would be run based on Islamic tenets.

He said that the Muslim community had yet to raise the required capital base.

Barau said there was a need to create awareness on such an institution as it would

serve both Christians and Muslims without bias.

"Some Muslims do not patronise the commercial banks, and it is the financial sector that is worse off for it," he said.

The deputy governor spoke as a guest lecturer at the ceremony, organised by Al-Habibiyyah Academy.

The academy was established in January 2003 to encourage the study of the Quran and application of its principles to life.

The governor of Niger state, Dr Aliyu Babangida, who hosted the event, said that

most Muslims had not taken time to study the Quran and live by its principles.

Babangida said that the Quran must be read and internalised by all Muslims, and it must reflect in their behaviours.

The proprietor of the institution, Imam Adeyemi Ademola, said the award was designed to further encourage the reading and internalisation of the Quran.

Those who received awards included Alhaji Musilu Smith, a former Inspector General of Police; Alhaji Abubakar Sodangi and Malam Yusuf Ali, a lawyer.

Investors Await CBN’s Rules On Islamic Banking

Strategic foreign investors, eyeing stakes in Nigeria 's financial sector, have requested from Central Bank of Nigeria (CBN) details of regulations governing operations of Islamic banking.

Some of the investors, who visited the country from the United Kingdom, expressed eagerness to establish a new Islamic banking system in the country.

Speaking during a visit to the Nigeria Investment Promotion Commission (NIPC), the leader of the delegation and managing director of Jaiz International Plc, Mr. Mohammed Mustapha Bintube, stressed that the team was convinced that there were enormous opportunities in the nation's financial sector.

He said that they visited Nigeria because its assessed economic friendliness and potentials for growth. He also stated that the nation's economy is open to all, irrespective of race or religion.

The executive secretary of the Nigeria Investment Promotion Commission (NIPC), Mr. Mustapha Bello, while addressing the team, stressed that the commission was committed to encouraging foreign investors.

He stressed that Nigeria would do whatever it could to support the realisation of the Islamic banking system, because he could foresee most of the other banks in the country embracing the idea.

Bello stated that it would be like the case of micro-finance that was spear-headed by the NIPC, when it was managing the World Bank Micro-Small and Medium Enterprises (MSME) facility, which was one of the components of micro-finance.

He said that the CBN drafted some regulations, which resulted in many commercial banks embracing micro-finance and so paved way for the small scale petty traders to have access to micro-finance.

Bello was optimistic that the project would prove something similar with other banks wanting to embrace Islamic banking or wanting to create a section of their branches that would have to do with Islamic banking.

He said, "I can foresee something happening, most of the other banks in Nigeria will definitely embrace it by the time the Central Bank comes out with details of the regulations governing operations of Islamic banking in Nigeria .

"It is like the case of micro-finance which was spare-headed by us. We are managing the World Bank micro-small and medium enterprises facility and one of the components is micro-finance."

Speaking further Bello said that Nigeria needed investment in the mining industry, the transport sector and in refineries, oil and gas and in the manufacturing industry.