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Friday, September 11, 2020 / 1:00 PM /
Bukola Akinyele for WebTV / Header Image Credit: WebTV
The Guidelines for Takaful
Insurance in Nigeria are overdue for review and reforms to make the industry
more effective and robust.Mr. Abdullah Abdulrasaq, a
lecturer in the Department of Islamic Banking, Insurance & Finance at the
Islamic Finance College, Ilorin Kwara State made the point in a recent
interview on WebTV's Islamic Finance Weekly Program.
According to Abdulrasaq, the National Insurance
Commission (NAICOM) the key regulator in the industry is yet to review its
guidelines for Takaful. He believed the Takaful industry which in 2019
had a total size of about $24bn globally, could deepen Nigeria's risk
protection business.
Speaking on the impact of the COVID-19 Pandemic on the
growth and development of Islamic Insurance, the scholar said that it had
adversely affected critical sectors of the Nigerian economy.
He decried the fact that nations known as the leading
centers for Takaful like Malaysia and Sudan have been adversely affected
by the pandemic including Gulf countries, resulting in knock-on effects in
frontier markets like Nigeria.
Abdulrasaq highlighted the fact that Islamic Insurance
was designed for members to contribute money into a pool system to
guarantee each other against loss or damage. Takaful-branded insurance
is based on sharia or Islamic religious law, which explains how individuals are
responsible to cooperate and protect one another. It covers policies like
health, life, and general insurance needs.
The scholar noted that an improved regulatory
environment was critical for the growth of Takaful in Nigeria.
Looking at the opportunities from Islamic Insurance,
he identified the agriculture sector as a key driver of economic activities in
the country, and the need to ensure there are insurance products for the
sector.
"There should be a concept on Islamic Microfinance
for Agriculture as an alternative funding platform. The only sector that
continues to navigate the pandemic is Agri-business" he said.
He added, "The Agricultural sector needs major
attention as an alternative for Islamic Insurance so that farmers will be
helped and motivated by elevating them and by sharing their risk".
"There are not up to 10 professors of Islamic
Insurance in Nigeria, the academic area of study lacks deeper scholarly
learning and contributions. Islamic Insurance and Islamic Banking in Nigeria
are still poorly understood and operated. NAICOM as a regulator needs to work
on the growth of Non-Interest-related Insurance" Abdulrasaq said.
He decried the relatively small number of Islamic
Finance teaching institutions in Nigeria. He cited Bayero University, Kano as
the only University that offers a postgraduate course on Islamic Insurance and
the Islamic Finance College, Ilorin, Kwara State.
"We have Islamic Insurance and Islamic Banking in
less practice in Nigeria while the conventional alternatives continue to
flourish. The preliminary level of Islamic Finance education should be focused
on the syllabus and curriculum changing it to suit what the country needs. From
OND, NCE to BSc Level, Islamic insurance is among the fastest-growing areas of
study in the world".
The finance expert tasked Islamic Insurance
practitioners to invest in sensitizing and creating more awareness of Takaful
to the insurance business, especially in rural areas. "In Islamic Insurance,
the premium is refundable to the participant. Monitoring and Evaluation
(M&E) is very important to Takaful Insurance" he said.
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