ABUJA – Outliving a strong Christian opposition, the Islamic banking has finally started operations in Nigeria to fulfill Muslim needs for Shari`ah-compliant financial products.
“This is coming after over five years of raising fund for capitalization, stiff opposition from some Christian groups and media bigots amidst a myriad of other challenges,” Disu Kamor, spokesman of the Muslim Public Affairs Centre (MPAC), told OnIslam.net.
Jaiz Bank Plc began Shari`ah-compliant financial operations in Nigeria in January.
Based in the capital Abuja, the bank has two branches in the core Muslim northern states of Kano and Kaduna.
It is expected to spread its tentacles to other regions in the coming years.
“The whole idea of this banking option is to bring more people into banking in Nigeria that provides banking without interest,” the bank chairman, Alhaji Umar Mutallab, told the bank’s inaugural Annual General Meeting.
“This kind of banking is for all religions because no religion wouldn’t want to help, especially in funding critical project without using interest elements.
“Whether it is Christianity or Judaism, every community wants to borrow money without being bugged down with multi-layer interest structure.
Islamic banking has been a hot issue in Nigeria since the Central Bank of Nigeria (CBN) unveiled plans to introduce Islamic banking services in the country.
Christian groups have strongly opposed the move, accusing the CBN governor Sanusi Lamido Sanusi of favoring one religion above another.
The umbrella Christian Association of Nigeria threatened a legal action unless the CBN withdraws its license to Jaiz to launch Islamic banking services.
But the CBN rejected the Christian accusations, saying the model was only optional and is meant to give Nigerians an alternative to the much-criticized conventional banking system.
Sources at the Jaiz bank told OnIslam.net that the bank’s operations started on a low-key without any press briefing in order not further heat up the socio-political atmosphere in the country.
Nigeria, one of the world’s most religiously committed nations, is divided between a Muslim north and a Christian south.
Muslims make up 55 percent of the population, Christians 40 percent and five percent atheists.
Nigeria’s Muslims and Christians generally live peacefully side by side, but regional and ethnic rivalries bubble under the surface.
MPAC called on Nigerian Muslims to throw their weight behind the nascent Islamic banking industry.
“Alhamdulillah! The Islamic banking is here: our religion mandates it; we fought for it; and with the Mercies of Allah, now we’ve got it,” Kamor said.
“It is therefore incumbent on us to learn about its operations, support and sustain it.”
Prof Ishaq Lakin Akintola, executive director of the Muslim Rights Concern (MURIC), told OnIslam.net that it behooves on “all of us Muslims to rally round this initiative to ensure it succeeds”.
“Whether we will act now or lament later, the choice is ours. This is the time to be proactive so that we’ll not be forced to be reactionary later.
“Finally, Allah loathes riba (interest), Jaiz Bank affords us the chance to please Him, the merits of the banking system are conspicuous and the time to support it is now!”
Islam forbids Muslims from usury, receiving or paying interest on loans.
Transactions by Islamic banks must be backed by real assets, not shady repackaged subprime mortgages.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
The Islamic banking system has been already practiced in 50 countries worldwide, making it one of the fastest growing sectors in the global financial industry.
In a report last November, PricewaterhouseCoopers said the $1 trillion Islamic finance industry was expected to grow by between 15 to 20 percent per year going forward.
Dr. Abdul-Lateef Adegbite, scribe of the Nigerian Supreme Council for Islamic Affairs (NSCIA), said Islamic banking has come to stay.
“We thank Allah (SW) for His mercies for letting this dream come to a reality in our life time,” he told OnIslam.net.
“It is indeed a dream come true. Together we must support this initiative in order to shout down those who are always against Islam.”