Sunday, July 25, 2021
/ 6:30 AM / Bukola Akinyele-Yisau for WebTV /Header Image Credit: NIFAN
The Non-Interest Financial Institution Associations of Nigeria (NIFIAN) recently hosted its 2nd webinar which focused on the theme "Understanding Risk and Return Sharing Concept in Non-interest Finance".
The Managing Director of Jaiz Bank Plc and President of NIFAN, Mr. Hassan Usman, in his keynote address said at the present stage of the global economy, the risk and return in Islamic finance massively supports business and economic recovery. The Islamic finance sector according to him needs to be positioned as the accelerator for the industry.
The Jaiz Bank CEO acknowledged the fact that Islamic finance in Nigeria is growing at a double-digit. He said "Islamic finance has the potential to contribute significantly to financing financial growth, sharing risk and return and thereby serving as a catalyst to the development of the financial economy".
Giving a presentation on "Risk and Return Sharing in Non-interest Banking: Catalyst for Business and economy recovery". The Chief Strategy Officer, Jaiz Bank Plc, Dr. Mohammad Kabir Mohammad, said the risk and return approach to non-interest finance and services, has a value proposition and is the way to go for business and economic recovery particularly at a challenging time in the global economy.
The Vice-Chairman Noor Takaful Insurance Limited, Mr. Aminu Tukur, speaking on "Concept of Savings and donations in Takaful Insurance Product offering" noted that when an individual enters a Takaful arrangement, the first commitment is by making donations to assist other people entering the same contract as the person with insurance in case of an accident or disaster.
The donation is known as Tabarru an Arabic word and without the concept of Tabarru (donation), the transaction would be similar to insurance practice, which requires exchange or returns as buying and selling contract.
Takaful is derived from the Arabic root 'Kafala' meaning to guarantee, this has been in practice for decades. The Takaful model is to formalize the system of donation by sharing risk with other people, unlike the conventional which is a risk transfer.
According to him, two things that guide Muslims are the Holy Quran and Hadith. Speaking further on Takaful as savings, and how it assists in terms of financial planning, he said insurance is an essential part of any sound financial planning.
In the Takaful system, participants will agree to contribute a certain amount to a particular pool which would determine the type of contract they are into. Insurance gives coverage, protection, and assists someone in terms of needs. He listed the two types of Takaful as Family and General Takaful
Speaking on insurance and investment, he said the latter is to grow wealth while the former is needed to protect against possible loss in the future.
Aminu reiterated the importance of saving money for future purposes, purchases, and wealth building. He advised Nigerians to save regularly, be consistent, and also speak with an expert.
Mr. Attahiru Maccido, Managing Director, one17 Capital Limited said the Nigerian market was full of opportunities from both the supply and demand side virtually in all sectors. According to him, Sukuk was a way to standardize the financing opportunities in the country.
He highlighted the key terms in the Classification of Sukuk contract in Islamic finance to include;
Giving the closing remarks, the Managing Director, Lotus Capital Limited, and Vice President, NIFAN, Mrs. Hajara Adeola, thanked the president and speakers for sharing their knowledge and also thanked the 400 participants who attended the webinar virtually.
The webinar was moderated by Mr. Ola Bakare Manager at Suntrust Bank and Secretary-General of the Non-interest Financial Institutions Association of Nigeria (NIFAN).