Expert Highlights Benefits of Islamic Finance

By Obinna Chima
The Managing Director/Chief Executive Officer of the Islamic Banking and Finance Institute of Nigeria (IBFIN), Sani Aminu Dutsinma has said that Islamic banking and finance instruments have the potential to check greed, high handedness, selfishness and corruption, not only in the banking and finance industry, but also in the public sector.
Dutsinma, said this in a keynote address he delivered to members of the Nigerian Union of Journalists (NUJ), at a one-day sensitisation seminar in Lagos.
He pointed out that Islamic banking and finance, being asset-based, should in principle be less prone to financial crime. According to him, the Islamic finance industry had expanded rapidly over the past few decades, growing between 10 to 20 per cent annually, as shariah-compliant financial assets are estimated at about $2 trillion, covering bank and non-bank financial institutions.
Islamic banking assets have been grown faster than conventional banking assets, he said, adding that there has been an increased interest in Islamic finance from countries such as the United Kingdom, Luxembourg, South Africa and Hong Kong.
Within sub-Saharan Africa, he revealed that South Africa leads in terms of Islamic finance, with one of the largest international Islamic banking conglomerates namely Al-Baraka Banking Group, he disclosed.
“Since the introduction of Islamic finance in Nigeria some 18 years ago, concerns and apprehension have been voiced that the introduction might be a ploy to Islamise Nigeria. However, as at today, we are yet to receive any report of religious discrimination as regards access to any shariah-compliant products or services.
“Islamic finance is not reserved for Muslims only. It is not a “Muslim finance.” There is no such tag on Islamic finance products either in Nigeria or in any part of the world. The products are designed according to defined principles and are vetted by learned scholars.
“It is high time Nigerian policy makers recognised Islamic finance can significantly contribute to economic development, given its direct link to physical assets and real economy. The use of profit-and-loss sharing arrangement encourages the provision of financial support and generates jobs. The emphasis on tangible assets ensures that the industry supports only transactions that serve a real purpose, thus discouraging financial speculation.
“Furthermore, Islamic finance helps promote financial sector development and broadens financial inclusion. By expanding the range and reach of financial products, Islamic finance could help improve financial access and foster the inclusion of those deprived of financial services.
“Islamic finance emphasises partnership-style financing, which could be useful in improving access to finance for the poor and small businesses. It could also help improve agricultural finance, contributing to improve food security,” he added.