How Non-Interest Financial Institutions and Products Fair in Nigeria

Islamic Finance   940 VIEWS 

Thursday, April 07, 2022 / 11:15 AM / by Bukola Akinyele-Yisau for WebTV / Header Image Credit: EcoGraphics

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Since 2010 when the Central Bank of Nigeria issued the framework for non-interest banking, other financial and capital market regulators have expanded the frontiers to cover insurance, pension, capital markets, venture capital, and even fintech.

Non-Interest finance has supported the Nigerian economy in several ways, including;

  • Infrastructure
  • SME Financing
  • Housing
  • Financial Inclusion

In 12 years since establishing the framework for Non-Interest banking, there has been remarkable growth in the industry, from banking to investments.

The growth has allowed ethical investors to participate in the financial market and economy.

In this article, we capture the leading Non-Interest Finance Institutions and Investment Funds in the country;

Jaiz Bank Plc

Jaiz Bank Plc is a non-interest bank in Nigeria operating under Islamic banking principles. It is the first non-interest full-fledged bank established in Nigeria. Jaiz got licensed in 2011 but started its operation fully in 2012. It has 45 branches in Nigeria, including Lagos Abuja, among other states.   The current MD/CEO, Mr. Hassan Usman

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Taj Bank Limited

TAJBank Limited is a bank in Nigeria operating under Islamic banking principles and is a non-interest bank. It is the second non-interest bank established in Nigeria and headquartered in Abuja, the country’s capital city. Founded in 2019. The Current MD/CEO is Mr. Hamid Joda.

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Lotus Bank

LOTUS BANK is a Non-Interest Nigerian Bank deeply rooted in ethical banking, committed to ethical investing and ethical prosperity. The Head office is in Lagos, and other branches are in Abeokuta, Ilorin. Founded in 2021. The Current MD/CEO is Mrs. Kafilat Araoye.

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Alternative Bank limited – A subsidiary of Sterling Bank Plc 

Sterling Bank Plc has received the Central Bank of Nigeria’s (CBN) Approval-in- Principle for a stand-alone license for its non-interest banking business. The Bank will comply with Islamic principles in its dealings. Before receiving CBN’s approval to operate a stand-alone non-interest banking, Sterling has been offering Islamic or non-interest banking services such as Mudaraba, a partnership, under Sterling alternative Bank since 2014. Given the new CBN approval, the subsidiary can now operate as a full-fledged bank. Current MD/CEO, Mr. Abubakar Suleiman.

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Shariah Compliant Investment Funds

  1. Lotus Halal Fixed Income Fund
  2. FBNQuest Halal Fund
  3. One17 Capital Limited
  4. Marble Capital Limited
  5. United Capital Sukuk Fund
  6. Norrenberger Islamic Fund
  7. CapitalTrust  Halal Fund
  8. Stanbic IBTC Shari’ah Fixed Income 
  9. Cordros Halal Fixed Income

Non-Interest Microfinance Banks

  1. Tijarah
  2. I-care
  3. Halal-Credit Microfinance Bank 

Takaful Companies (Islamic Insurance)

  1. Jaiz Takaful Insurance Plc
  2. Noor Takaful Insurance Limited
  3. Hilal Takaful Nigeria Limited
  4. Salaam Takaful Limited
  5. African Alliance Plc 

According to Fitch Ratings, the Islamic-finance industry in Nigeria is expected to continue its moderate growth trajectory in 2022-2023. Growth will be driven by top-down government support for the sector, Sukuk issuance by the federal government, asset growth by newly established Islamic banks, and enabling regulations.

The size of the Nigerian Islamic finance industry is estimated to have reached USD2.3 billion at the end-2021, with outstanding Sukuk being the largest segment at 66%, followed by Islamic banks at 32% (total assets), and the remaining 2% between Islamic funds (total assets) and takaful (total contributions).  

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