Friday, August 28, 2020 / 1:00 PM / Bukola Akinyele for WebTV / Header Image Credit: WebTVNG
To support the growth of Islamic finance in Nigeria, financial experts have noted that collaboration, affordability, accessibility, simplicity and an enabling environment are ingredients to sustaining a viable Halal business ecosystem. The observation was made by, Mr. Abdul Azeez Oguntoyinbo, the Founder & CEO of Esusu Africa, while speaking as a guest on WebTV's programme, Islamic Finance Weekly.
Oguntoyibo noted that the COVID-19 pandemic had adversely affected several sectors of the economy, and many businesses and financial service providers. He was of the opinion that to address the problems the needed strategy was a digital transformation of the financial service sector including the Islamic finance segment.
He explained that the coronavirus-induced lockdown hurt several financial service providers in Q1 and Q2 2020 with many having to shut down. This has been responsible for the perceived decline in financial inclusion.
The Esusu Africa CEO noted that as of August 2nd 2020 over 42 million people had Bank accounts with registered BVNs, the registration target of Bank accounts by December 2020 has been put at 70m. He urged the government to look into improving the domestic savings culture.
Looking at the EFINA report, which stated that the North-West and North-East regions which have a large Muslim population account for the highest distribution of financially excluded adults. How Can Islamic Finance Fintech Companies help to broaden financial services to the unbanked in these regions.
The ESUSU Founder believed Islamic Finance and fintech Companies can collaborate to develop products that will adhere to their religious beliefs and are well protected.
He expressed the opinion that this can be addressed by strategic collaboration amongst the different stakeholders and non interest financial institutions, who will work together with the community leaders such as Imam/ religious leaders and also Islamic organizations and institutions.
Oguntoyinbo believed this will bridge the gap of financial exclusion particularly in the northern part of Nigeria.
He said that there are dedicated platforms for Halal invest which is a digital market place to facilitate Halal savings, Halal investment, Takaful and Zero interest and loans.
He noted that Esusu was collaborating with non-interest financial Institutions, and asset management firms, such as Suntrust Bank and Cornerstone Takaful. He said the App was easy to download and provides access to Islamic financial product and services.
The Islamic fintech operator emphasized the need for collaboration, affordability, accessibility, simplicity and appropriateness to be integrated in products designed for Islamic Finance, that can boost financial inclusion.
According to him, to achieve Financial Inclusion in Nigeria there was a need for robust technology and a responsive agent network.
Looking at the potential of the Global Islamic Financial Market with a market size worth over $2trn, he said that instruments in the Islamic financial ecosystem were strategic to improved domestic financial penetration.
He cited the Sukuk Bond which was oversubscribed by 500% in Nigeria which was similar to the experiences in other countries who have adopted the sukuk bond, such as non-Muslim countries also have the opportunity to tap into Islamic Finance.
He concluded by calling on Islamic finance practitioners to intensify investments in the financial ecosystem. He cited the UK and Malaysia as countries that leveraged Islamic Finance to grow their economies and urged the Nigerian government to emulate these countries.