Vunderkind
Social Member
Nigeria is finally warming up to the idea of Islamic banking with its non-interest advantage which will be available to the more than 80 million Muslims in the country. It is projected that this new development would make Nigeria one of Africa’s thriving banking sector.
Nigeria, home to the highest population of Muslims in sub-Saharan Africa aims to become the central African hub for Islamic finance. The Islamic finance model has its own peculiarities, such as the forbiddance of interest and market speculation.
The past months have been dedicated to the setting of foundations upon which Islamic finance would float in the country. Products like Islamic bonds (sukuk) insurance (takaful) as well as interbank lending products will serve as regulatory initiatives.
According to the Special Adviser to the CBN governor on Noninterest banking, “The potential is there but the market is negligible in Nigeria because we have only one Islamic bank and one window — but it has potential to grow”.
Meanwhile, the regulators in Nigeria have ensured that they have the right to determine what Islamic products come into the market, similar to the regulations observed in countries like Malaysia and Oman.
The Central Bank of Nigeria has, in the meantime, set up an advisory committee to regulate the Sharia Compliance. The Insurance regulator has issued the necessary guidelines for takaful operators in April.