Friday, July 17, 2020 / 1.00PM / Bukola Akinyele for WebTV / Header Image Credit: LUL
The United Kingdom is the leading centre for Islamic finance globally with assets under management topping $5billion, spread over 20 banks.
Mr. Gori Olusina Daniel, the Managing Partner at Africa Public-Private Advisory Services Limited, pointed this out as a guest on WebTV's Islamic Finance Weekly Program.
He cited the Al Rayan Bank which provides Islamic Finance services to more than 85,000 customers in the United Kingdom, where more than 33% of the bank's clients are non-muslims.
According to him with products covering Fixed Deposits, 80% of the depositors in Al-Rayan bank are Non-Muslims.
Sharing his experience, he said Islamic finance is a model built on ethical principles of fair lending, risk sharing, doing no harm and focusing on the whole wellbeing of communities.
Speaking further he said as a Non-Muslim who has tapped into the opportunities in the Islamic Finance market, the industry has come a long way over the last two (2 ) decades.
On the perception of the word "Islamic Finance" serving as a disincentive to prospective investors that are Non-Muslims, Daniel was of the view that Islamic financial institutions need to consider what may limit increased business and a larger number of customers due to the religious faith.
He called for an examination of the underlying principles of Islamic finance and motivation for the institutions.
For him, the motivation is to inspire a range of viable alternative financial solutions, for people of the Muslim faith who are discouraged from the mainstream interest-based financial products.
Speaking on the repackaging of activities in the Islamic Finance market, he noted that some of the IF institutions now call their products alternative financing, non-interest lending, ethical finance instead of using the word Islamic finance.
Looking at Nigeria, the public-private partnership specialist said the most effective Islamic finance product created, is the FGN 3 Sukuk listed and issued to finance road projects. He said the biggest opportunities for Islamic finance in Nigeria are in housing and mortgage, noting that the over 20m housing deficit creates more opportunities for the industry.
He called for more Sukuk financing that could support hospitals, power infrastructure, and mini-grid energy solutions.
Sharing further thoughts on the opportunities for Islamic finance in Nigeria, he was optimistic that the opportunities were huge and Islamic finance would certainly be part of a basket of financial instruments that would propel economic growth in the country; he noted that Nigeria needs to be able to move from Post-COVID-19 to economic recovery and sustainability,
He also advised Islamic Finance institutions to consider co-finance relationship with the mainstream financial industry, to collaborate on deepening the market for ethical finance in the country and encouraging investors to prioritize ethical financing.