Uduanu: Non-interest Fund Will Deepen Financial inclusion

Nume Ekeghe

Given Nigeria’s large Muslim population, the new pension non-interest fund, expected be launched in the last quarter of this year, will help deepen financial inclusion in the country, the Managing Director and Chief Executive Officer, Sigma Pensions, Mr. Dave Uduanu, has said.

The non-interest fund, which is Fund VI under the multi-fund structure introduced by the National Pension Commission (PenCom), is for contributors who choose to have their pension contributions invested in non-interest money and capital market products.

In his speech at a virtual conference to promote ethical investments in Nigeria hosted by Sigma Pensions yesterday, Uduanu also stated that when launched, the non-interest fund will boost investments in the non-interest finance sector.

Uduanu explained: “The Islamic finance global market has been expanding rapidly in recent years, recording 15 to 20 per cent annual growth, and is estimated to be worth $3trillion, and the industry is gaining wider recognition in Nigeria.

“The non-interest Fund will take off in the fourth quarter of this year. It will boost interest in non-interest finance and also deepen financial inclusion in Nigeria given the country’s large Muslim population that is not participant in the ethical fund investments and Islamic financing and this is the right time for it.”

The Sigma Pensions boss called on ethical investors to tap into the many investment opportunities which, according to him, abound in the country.

He stated that when it takes off, the non-interest Fund will be a positive development for the pension industry, adding that Nigeria was probably the only country with a large Muslim population that does not currently have such an ethical Fund.

He explained that for the second time in two years, Sigma Pensions decided to host the 2021 conference, which had as its theme, “Non-Interest Investing: Investing My Money; My Values,” as part of its efforts to raise public awareness about non-interest finance ahead of the launch of the Non-Interest Fund.

Also speaking at the conference, the guest speaker and MD/CEO, Lotus Capital, Hajara Adeola, commended Sigma Pensions for providing a platform for increasing public awareness about non-interest finance.

She stated that ethical investors in the country now have a lot of opportunities unlike in the past when it was difficult for them to find such opportunities, adding that: “We cannot separate our faith from our finances.”

Adeola, who attributed increased public acceptance of non-interest finance to the support of regulatory authorities, such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission (NAICOM) and Pencom, predicted that the sector would enjoy even wider acceptance when the Non-Interest Fund takes off.

She, however, stated that in order to ensure continued expansion of the non-interest finance market, operators in the industry should step up their investments in educating members of the public and raising their awareness about the alternative financial system.

In addition, she urged operators to focus on, delivering best in class customer services, aside from designing quality products.

In his contribution, the Commissioner, Administration at the National Pension Commission (PENCOM), Dr. Umar Farouk Aminu, commended Sigma Pensions for hosting the conference.

He disclosed that the Commission is, “Currently fine-tuning an operational framework on Non Interest Fund with the objective of establishing standard and procedures for the management of Fund VI.”

He added: “The Financial Regulatory Advisory Council of Experts (FRACE) had formally certified the draft framework as being in compliance with non-interest(Islamic) finance principles.”