A lecturer at the University of Lagos, Prof.Tajudeen yusuf, has decried the exclusion of no fewer than 60 percent of the Nigerian population from access to credit facilities from the country’s conventional financial system.
Prof Yusuf said no country can develop when less than 10 percent of its population are financially excluded as is the case in Nigeria, saying the situation has brought about stunted economic growth and development.
Speaking at the official Opening of the first lslamic microfinance bank in the Country Al- Hayat Trust Non –interest Microfinance Bank owned by Al-Hayat Relief Foundation in ijebu –Ode, Ogun state tagged “ The roles of islamic Microfinance bank in the society, Yusuf explained that part of significant roles of Islamic Microfinance banks system is financial inclusion aimed at providing financial services to those who are traditionally excluded from the formal financial sector, particularly the poor, rural populations, and small entrepreneurs.
By offering Sharia-compliant financial products such as Qard al-Hassan (benevolent loan), Murabaha (cost-plus financing), and Musharaka (partnership), these banks ensure that individuals from all socio-economic backgrounds have access to financial resources.
The professor of Risk Management and Insurance noted that One of the primary objectives of Islamic microfinance is poverty alleviation by way of providing small-scale financing to entrepreneurs and small businesses, Islamic microfinance banks empower individuals to generate income, create employment opportunities and improve their standard of living. Adding that this has contributes to poverty reduction and economic development within communities.
He stressed the need for concerted effort for more SME’s to grow so as to boost nation Gross Domestic Products and reduce unemployment in the society.
“As it is happening in banking sector, same is happening insurance sector, Capital Market as well as asset management because of its inclusiveness”.
According to him, “Islamic microfinance banks play a significant role in society, particularly in regions where conventional banking services are not readily accessible or where there is a large Muslim population seeking Sharia-compliant financial services. Here are some of the key roles and contributions of Islamic microfinance banks”.
Noting that part of its roles is Promotion of Ethical and Socially Responsible, Support for Small and Medium Enterprises (SMEs] ,Risk-sharing and Profit-sharing, community Development as well as empowerment of women in the society .
He further stated that because of its inclusiveness nature and what Islamic banking stands for the world bank cannot close its eyes for its developmental progress.
He noted that the King Charles of united kingdom is also advocating that united kingdom to be the epic centre of Islamic finance in the world because of pivotal the institutions has play in boosting economy of each nations.
The University don, pointed that most of the conventional banks are also routine for the license of Islamic zero free interest rate because they know that Islamic zero interest banking will soon take over the banking sector.
Prof. Yusuf mentioned that the World Bank recognizes and patronizes the Islamic banking system while noting the active participation of developed countries such as Britain, Japan, and the US.
Speaking earlier at the event, the president of the foundation, Dr.Asif olatubosun Azeez disclosed that emphasized the pivotal role played by Hayat Trust Non-Interest Microfinance Bank in fostering community development, and contribute to socioeconomic stability in Nigeria.
He stated that the conventional license was obtained when all attempts to secure a full-fledged Non-Interest Microfinance Bank license proved unsuccessful.
According to him, ”Ten years ago, we established Al-Hayat Microfinance Bank with share capital, although, it was an Islamized Bank with conventional license and the conventional license was taken up then, when all means to get full fledged non –interest microfinance proved abortive but in November 2022 we got the approval in –principle [AIP] and the license in February this year”.
The chief lecturer at Sikiru Adetona College of Education, Science and Technology, Omu- Ijebu, note that Al-Hayat Microfinance Bank for the period its operated before securing a full- fledged non –interest microfinance has Customer base grew to 34,066 and has also disbursed 3.9 billion to 17,085 customers while the total assets of the bank grew from 81.4million to 507.7million as well as increased in shareholders from 30 million to 74.4million
