How Islamic Finance Can Deepen Financial Inclusion In Nigeria - Hassan Usman, MD, Jaiz Bank

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Sunday, November 10, 2019 / 08.45PM / Bukola Akinyele for Proshare WebTV / Header Image Credit: Premium Times Nigeria

 

On the sidelines of the 4th African International Conference on Islamic Finance, Bukola Akinyele of WebTV discussed with Mr. Hassan Usman, MD/CEO, Jaiz Bank on "Islamic Finance as a Tool for Financial Inclusion in Nigeria".

 

Excerpts of the discussion appear below;

 

Bukola Akinyele


As Nigeria seeks to achieve 80% adult financial inclusion by 2020, Islamic finance has been seen as a critical tool that can help to achieve the target. Can you speak on the issue?

 

Hassan Usman


From our own participation in deepening financial inclusion, it is obvious that there can't be real development if a significant number of community members are not included in the financial system. Financial inclusion has become a compelling global concern.


In Nigeria,  a large number of financially excluded people reside in the North West and North East of the country. This is why Jaiz bank has established a large number of branches in these areas and assisted in deepening financial inclusion, especially in the North.

 

People have  become increasingly familiar with Jaiz bank services and its products.

 

The big task lies in the majority of our villages and suburban locations where we have less privileged citizens who are farmers, housewives who are not active in the formal economy. They do not also have enough resources to save or the traditional way that banks engage with customers.

 

At Jaiz bank our focus has been to capture these segments in the North-East and North-West, which will go a long way to addressing financial exclusion in Nigeria.

 

What Jaiz bank is doing differently, is to engage with these communities especially the most vulnerable which are women, to provide them with capital to encourage a banking culture. 


We engage in sensitization programs at the village level and we  give equity to small businesses to empower them.


We engage small businesses on a regular basis to see the progress they are making and encourage them to save a portion of their profits so that they can build up capital.


For us, the most significant element in financial inclusion is empowerment, because if people are empowered they will look for a bank.

 

Bukola Akinyele


There is also the quest for the development of financial services product that can also help to deepen financial inclusion, in areas like savings and investment.What are your thoughts on this?

 

Hassan Usman


Financial products will provide non-interest options for those who are already engaged in the financial system and are not happy with conventional products. We provide an alternative either from the support from deposit or transaction base account or if they want to get finance.

 

We provide alternative finance  products that is not based on interest, that they can use in a banking environment that will drive the financial inclusion process.

 

Bukola Akinyele


Will Jaiz Bank collaborate with Fintechs to deepen financial inclusion?

 

Hassan Usman


We don't have any option, as a bank we recognize the fact that if we have to grow, if we have to get as many potential customers as possible we cannot use the traditional model of branching.

 

The fintechs provide an opportunity for banks and financial institutions to reach the hinterlands and inaccessible areas, because of sustainability cost implications and the logistic requirements for building branches.        

 

Fintechs will be vital and Jaiz bank sees collaboration with them as critical to achieving scale in financial inclusion and improved financial services to the unbanked, especially in the North-West and North-East regions. 


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