Thursday, January 07, 2021/
11:19 AM / Bukola Akinyele-Yisau for WebTV / Header Image Credit: GCC Business
resulting from the coronavirus pandemic, is likely to be the catalyst for
Islamic banks across many countries to accelerate their digital transformation
strategies, especially with financial inclusion being a major issue in many of
the countries where Islamic finance is active.
From the State of the Global Islamic Economy
2020/2021 Report, the COVID-19 pandemic halted the growth of the Islamic
finance sector but stimulated the development of more inclusive and socially
driven finance, whether through crowdfunding, public-private partnerships, or
support for SMEs.
The report estimates that the value of Islamic finance
assets increased by 13.9% to $2.88 trillion in 2019 from $2.52 trillion in
2018. Iran, Saudi Arabia, and Malaysia rank as the top three countries by the
value of Islamic finance assets and retain their positions from last year. Due
to the impact of the COVID-19 crisis, the value of Islamic finance assets is
expected to show no significant growth in 2020 but is expected to rebound and
grow at a CAGR of 5% from 2020 onwards to reach $3.69 trillion by 2024.
Despite the Covid-19 Pandemic, Here are some of the
Islamic Finance activities that occurred in Nigeria in 2020.
- February 2020, a total of NGN1b (US$2.74m) in two-year
interest-free loans was disbursed to over 5,000 traders in Sokoto State
under the trader loan scheme. 30% of the loans were earmarked for women.
- Giginya Microfinance Bank was launched in Sokoto in 2020.
- In May 2020, the CBN revised the deadlines for Microfinance banks
to comply with the minimum capital requirements. The new deadlines were
assigned to microfinance banks in different tiers and ranged from April
2021 to April 2022
- The DMO announced its plan to raise to N150billion
(US$383.02m) through Sukuk before July to fund the construction of
44 road project
- In June 2020, the CBN revealed plans to update a regulatory
framework to integrate a non-interest window in all its intervention
programs to support SMEs affected by the covid19 pandemic
- The Islamic Development Bank (IsDB) raised $1.5bn with a first Sukuk
of sustainability designed to support member countries experiencing the
COVID 19 Pandemic.
- The IsDB's Islamic Corporation for the insurance of investment and
Export Credit (ICIEC), among other organisations, provided insurance
for Nigeria's US$1.2billion in-kind loan from Brazil for the Green
- IFSB admitted the Nigerian Securities and Exchange Commission
(SEC) into its Membership during its 36th Meeting of the
Council and 18th General Assembly on the 4th of June
- President Muhammadu Buhari requested the approval of the house of
representatives for a borrowed of US$5.5billion from external sources to
implement the country's 2020 budget. The sum included US$1.13m borrowed
from the ISDB, which supported Nigeria with US$600m due to the impact of Covid19
- Nigeria Minister of Works and Housing Mr. Babatunde Raji
Fashola received a sovereign Sukuk Symbolic Cheque of N162.557bn for
the construction of 44 roads across the country.
- Jaiz Bank Plc hosted its 8th AGM and paid its
first-ever dividend to shareholders which gulped N884m.
- CBN Launched New Non-Interest Finance Schemes for Its Intervention
- Fintech Lending Company Kiakia launched an Android-based app to
allow Halal Financing
- In August 2020, TajBank Expanded its Operation In Nigeria, by
Launching its Sokoto Branch
- In September 2020, the CBN decided that in line with market
developments, interests on local currency savings deposits are negotiable
but subjected to a minimum of 10% per annum of the monetary policy rate
- The US$95 million Agro- Pastrol Development
Project financed by the IsDB in partnership with the Life and Livelihoods
fund was launched in Kano to support the State's agricultural productivity
- Jigawa State government secured a US$37.37m
facility from the IsDB to support Microfinance banks in enabling farmers
to access loans at an affordable rate
- TeamApt a fintech start-up in Nigeria is
developing technology to enable non-interest financing, SMEs in 2020/2021
upon receipt of regulatory approval
- The National Hajj Commission (NAHCON) In
partnership with Jaiz Bank launched the Hajj savings scheme in the city of
Kano for Muslims in Nigeria to perform their annual Hajj pilgrimage to
Saudi Arabia with ease.
- On November 12, 2020, President Muhammadu Buhari signed the Banks and Other Financial Institutions Act
(BOFIA) 2020 into law to strengthen
confidence in the banking sector and enhance the soundness and resilience
of Nigeria's financial system.
- United Capital launched its first-ever "Sukuk Fund" designed
to deepen the non-interest finance market in Nigeria.
For Comments and Enquiries, kindly send an email to Bukola.Akinyele@proshareng.com.
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