Innovation Hubs, Key to Attracting Islamic Venture Capital Investments in Nigeria

Proshare

Friday, June 25, 2021 / 11:00 AM / Bukola Akinyele- Yisau for WebTV / Header Image Credit: EcoGraphics

 

The establishment of innovation hubs that are tailored to developing Sharia-Compliant Start-ups will attract Islamic Venture Capital (VC) firms into Nigeria. Mr. Habeeb Gbenle, Fund Accountant and Sharia Compliance Officer, Capital Trust stated this and provided insights into the "Prospects for the Growth of Islamic Venture Capital in Nigeria" during the Islamic Finance Weekly programme.

 

According to Mr. Gbenle, this will serve as a platform through which individuals will share ideas and will encourage Islamic VCs and investors to the Nigerian non-interest market. 

 

The Islamic finance expert believed non-interest financial institutions can develop investment models to attract VC investments, and this will be effective through collaborations between non-interest banks and private equity companies. This partnership according to him will lead to the establishment of innovation labs to encourage the activities of Islamic fintech start-ups.

 

Speaking on the reason why there are no IVCs (Islamic Venture Capital firms) in Africa that can support Sharia Compliant Startups, he said majority of the funding to tech start-ups are from foreign investors.

 

Giving further perspective, he said statistics showed about 1% funding comes from local investors and this was the reason Africa does not have any IVC at the moment.  He cited the case of Nigerian Venture Capital firms whose funding are not domiciled in the country but with foreign investors. He also observed that there are a lot of foreign VC firms that are Africa focused.

 

He called for support from the government through the Nigeria Sovereign Investment Authority (NSIA) which can play a vital role in leading investment rounds for start-ups in the country, partnering with various local Venture Capital firms focused on the growth of Nigerian start-ups.

 

Habeeb Gbenle highlighted the following as sectors that Islamic Venture Capital firms can support such as the finance industry which covers Islamic Banking, Fintech, Insurtech, and Mortgage where there is low investment penetration.

 

Other sectors include lifestyle, education and agriculture which are drivers of economic activities in the nation.

 

Providing further details of the IVC operations, he said the most used instrument is the Wakala structure, where the Limited Partners appoint the Fund manager to manage the investment on its behalf for a return of management.

 

In the structure of the relationship between the IVC firms and start-ups businesses use Mudarabah tool, where the VC provide the funding and the start-ups getting the investment serves as Mudarib. Islamic VC is another alternative through which businesses can be financed.


 

Watch the Islamic Finance Weekly Programme for June 25, 2021 HERE

 

 Proshare Nigeria Pvt. Ltd.



Kindly share and stay connected with us on our platforms HERE

You can also subscribe to Proshare's Newsletter here

 

Related News on Islamic Finance

1.      Why Non-Interest Finance Institutions Should Support The Growth Of Start-Ups In Nigeria - Dr. Malik

2.     Fintech is the Future of Islamic Finance - Mufti Faraz Adam

3.      Islamic Banks, Technology and the Need to Improve Financial Inclusion - Muazzam Mohamed   

4.     Fintech Is a Viable Vehicle for Deepening Islamic Finance In Nigeria - Muhammad Jidda

5.     Fintech and Infrastructure, Ways Islamic Finance Can Support Nigeria's Economy - Abdulkader Thomas

6.     How Islamic Fintech Can Reduce Poverty and Unemployment in Nigeria - Abdulmajeed Muhammad 

7.     CBN Grants Lotus Bank a License to Commence Non-Interest Banking

8.     Non-Interest Banks in Nigeria, Need More Instruments to Improve Liquidity under Basel III

9.     SEC Nigeria Restates Commitment to Development of the Non-Interest Capital Market  

10.   Islamic Finance Is the Best Option For Real Sector Development In Nigeria - Ahmad Barau



 Proshare Nigeria Pvt. Ltd.


 

Related News on Private Equity & VCs

1.      The Customer is King in Venture Capital: Truth or Myth

2.     FSD Africa Investments Approves $4.5m Funding for Renewable Energy Financing Intermediary Nithio FI

3.     Setting Africa up for a Post-Mao China Type Economic Revolution, the Zedcrest Perspective

4.     Why Nigeria should Lower the Entry Barrier for the Private Equity Market

5.     African Private Equity Fundraising Fell in 2020 Due to Pandemic

6.     CardinalStone Capital Advisers Announces Final Close of Maiden Private Equity Fund

7.     Do Nigerian Startups Need Venture Capital Investment?

8.     Understanding Private Equity and Alternative Investments

9.     Stakeholders Explore Private Equity As A Bridge For SME Financing Through The Capital Market

10.  FMDQ, NASD, and NSE Lead Conference on SME Financing via the Capital Markets

11.   The Sunny Disposition of Private Equity in Today's COVID-19 World

12.  HealthPlus: Alta Semper Acted Outside the Spirit of the Agreement - Opinion

13.  Alta Semper Capital Responds to HealthPlus Pioneer CEO Accusations, Issues a Q and A

14.  HealthPlus: Attempted Hostile Takeover By Foreign Private Equity Firm

15.  Health Plus Announces Leadership Changes, Appoints Chidi Okoro as CTO

16.  FBNQuest Spotlights Private Equity as a Viable Alternative Asset Class

17.  Finance Act, 2019: Tax Implications for the Private Equity Industry

18.  Helios Agrees Transformational Business Combination With Fairfax Africa Holdings

19.  CDC Group Invests $100m in Helios Investors IV Fund

20. Experts Review the Impact of COVID-19 on Corporate Finance and The Future

 


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP