Collaboration Between Industry and Academia, Key To Developing Islamic Finance In Nigeria

Friday, July 31, 2020 / 1.00PM / Bukola Akinyele for WebTV / Header Image Credit: @UmarOseni

Collaboration between Islamic finance practitioners and academia will be vital to the development  of Islamic Finance Law in Nigeria. Dr. Umar Oseni, Chief Executive Officer and General Counsel, International Islamic Liquidity Management Corporation (An Intergovernmental Financial Institution headquartered in Kuala Lumpur, Malaysia) said this at a recent Islamic Finance Law webinar organized by Amofin Solicitors Lawfirm.

He noted that in every aspect of life, understanding concepts is very important. In his explanation, he said aside having the understanding of the laws of Islamic Finance, there is a need to know the roles lawyers play.

In his presentation, he said western models dominate financial markets and that conventional banking has existed for over 200 years, while the Islamic finance re-emerged towards the end of the last century with Tabung Hajji, West African Muslim Bank, and IsDB which was established in 1975  and this has brought improvement in the Islamic finance industry.

Giving historical details, Oseni said Prophet Mohammed (SAW)  succeeded in pioneering an economic reform called "Culturation"  which was the foundation of Islamic Finance.

The IsDB, according to him, has contributed immensely to the growth and development of the non-interest financial market across the globe, with related agencies covering insurance and other segments of the industry.

Oseni cited the example of Malaysia as a nation with a robust Islamic finance legal system. He explained how the country introduced Islamic banking in 1983 and established legal frameworks that covered the insurance industry and Islamic finance services act.

At the moment Malaysia is rated among the world's leading destinations for the advancement of Islamic Finance with regulations supporting the growth of the ecosystem from investment banking to insurance.

He highlighted the following as challenges facing the development of Islamic Finance Law in Nigeria;

• When it comes to Islamic finance understanding litigation is very important.
• Nigeria has few non-interest banks and this reflects a relatively  small market, which is a big challenge for lawyers specializing in Islamic finance
• Dearth of experts in Islamic finance
• Skepticism within the Muslim community which means some do not believe in Islamic finance
• Religious sensitivities and NBA's Institute for Continuing Legal Education - Islamic Finance Law.

The General Counsel of the ILMC also recommended a path for the evolution of Islamic Finance which would include;

• Developing a core team for thought leadership and innovative product development
• Proactive engagement with Halal Firms to structure corporate Sukuk
• Exploring the opportunities in the entire spectrum of Halal economy
• Embracing the "New Normal" - Collaborating with Fintech startups
• Enhancing Regional and global practice.
• Collaborating with global firms

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