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Sunday, May 11, 2014

ISLAMIC BANKING IN NIGERIA: SIX YEARS OF LOTUS HALAL FUND




   Lotus capital is a pioneer in the field of Islamic fund management being the first institution in the country to lunch halal management fund in 2008 when it made its initial public offering to the public. Since that time the fund has achieved a lot including the revolutionary lunching of Islamic shares index in association with the management of the Nigeria stock exchange in 2012. Its Halal fund has attracted patronage from across the country, with investors cutting across all faith. Among other activities of Lotus capital is giving advise to state governments on how to manage their budgets and avoid budget deficit through the use of Sukuk, the Islamic bond that do not use interest. The first Sukuk issued in Nigeria by the state of Osun in South West Nigeria was managed by Lotus as the leading issuing house of the project. At the end of the issuing in October 2013, a total N11.4 Billion was realized. Among the major investors in the Sukuk issue is Jaiz Bank Plc, the first fully fledged Islamic Bank in the country.

    For a country the size of Nigeria with a population of over 170 million people not lest than half of them belonging to the Islamic religion, it is surprising that there are only two major institutions in the country who called themselves Islamic financial institutions. looking at the size of Nigerian economy being recently ranked the biggest economy on the continent with annual GDP of half trillion Dollar, the country should ideally have sizable number of Islamic financial service players running their businesses in the country. Thus, the ideal thing to do for a country like Nigeria is not to depend on only Jaiz and Lotus as the only two major players in the field. While all business people who care much about ethics and their business shall patronized them, efforts shall be made to see that many others like them come on stream. This will go along way in ensuring the survival of the system in the country and ensure that the country and its people benefit from this unique system of financial and business transaction. 

Friday, May 9, 2014

ISLAMIC BANKING IN NIGERIA: A LOOK AT JA'IZ BANK PLC




     During a recent visit to the head office of Daily Trust newspapers in Abuja, the management of Ja'iz Bank Plc (Nigeria's first fully fledged Islamic Bank) under the leadership of its Bangladeshi Managing Director Muhammad Nurul Islam revealed that the growth witnessed by Ja'iz Bank Plc in the last two years surpassed what was seen in the case of Bangladesh and some Nigerian conventional banks. Since inception in January 2012, Ja'iz Bank has grown investment to about 22 billion Naira despite the numerous obstacles on it path as being the only non-interest bank in the country. These successes are coming at a time when there is a major change in the Central Bank of Nigeria with a new governor coming to office in the first week of June this year who nobody knows of his policies and plan for the apex bank. It will, therefore, require extra effort on the part of the management of the bank and other key stakeholders to ensure the sustenance of the feats achieved so far by the Bank. Looking at the performances of Islamic Banks elsewhere around the world one can be confidence about the future potentiality of Ja'iz Bank if handle very well by the management. Already the bank has grown it customer base from zero when it started operations to over 60,000 customers as at today, deposits grow by some 1500% in the period.

     I also learnt from the visit of the Bank's management that Africa's richest man is among the biggest shareholders of the bank, in addition to many small shareholders. With about 14 branches and still counting (it plans to open 12 more branches before the end of this year) the bank is on it way to become a national bank from it current position of a regional bank, this according to the plan of the bank will happen sometime in 2015. Being the only Islamic Bank operating in the country put a lot of obstacles on the way of Ja'iz Bank which people familiar with the operations of Islamic Banks around the world are aware of; but despite these the management of the bank have managed to grow its investment portfolio at the rate of 380% in the last two and half years. Its customer's deposit grow even higher at the rate of over 460% in the same period. Still higher for overall period at the rate of 750% during the year. According to the MD, the use of state of the art IT equipments have contributed a lot to this success, this is despite the fact that its plan introduction of VISA and Master Cards is coming in the next months. The vision of Ja'iz Bank plc is to be the largest non interest financial service provider in the Sub Saharan Africa.