Jaiz Bank: Between Perception and Reality

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hassan-usman

Jaiz Bank has begun a subtle but committed move to change its narrative and win more patrons, writes Raheem Akingbolu

Perhaps because of the level of religious and ethnic biases in the country when Jaiz Bank entered the market, most banking public were apprehensive about its brand promise. Considering the fact that perception establishes the meaning about a brand when a consumer makes initial contact with it, the toga of being referred to as a core Islamic institution, has since remained with the Jaiz Brand.

After overcome the teething stage and got the brand well rooted in the market, the top management staff of the bank , including its Managing Director/CEO, Hassan Usman, came out of their shell to share the organisation’s success story as well as allay the fear of millions of Nigerians, who still believe the bank was in the market to serve only the interest of the Muslims. To brand and marketing experts, the move was the first major repositioning move ever made since the entrant of the financial organization few years ago.

At a press briefing in Lagos, Usman and his team made some startling revelation which stunned many journalists. Among other things, the Managing Director revealed and introduced top management staff who are Christians, he gave the ratio of non-Muslims, who have chosen the bank as their trusted financial experts and he shared what he described as ‘Jaiz success story’ in Nigeria.

Bank for everybody
To clear the air about the misconception of whether it was meant to address only the needs of the Muslims, the Managing Director explained that the workings and offerings of the bank are available to all customers regardless of their religious beliefs and ethnicity. He admitted that though the bank operates based on Islamic tenets which are hinged on ethical and non-interest banking; the bank products are open to all Nigerians without religious bias.

The Jaiz bank boss further explained that the bank offers products like other commercial banks, but operates on the Islamic business principle of partnership, risk and profit sharing, unlike the interest-based operation model of other commercial banks.

Explaining the operations of the bank, he said: “We are the face of a new concept in banking. One important point we will continue to emphasize is that Jaiz Bank products are not religious products. They are open and available to all, irrespective of their faith or religion. We do everything other banks do and we are regulated by the same regulator; The Central Bank of Nigeria. The only thing that separates us from conventional banks is that there are ethical principles which we believe that bank and customers must meet before transacting business.

“For instance, Jaiz bank will in no way open an account or transact business with a beer-brewing company or a manufacturer that is into pig rearing or gambling business.”

On the partnership model of Jaiz Bank, Usman explained that “it is a mode of financing that tries to address human needs directly by providing goods and services on a payment basis different from conventional banking that we know. Literarily, that is what non-interest or Islamic banking is doing anywhere in the world. It is about providing financing to people who cannot afford to buy directly with their own resources at a time. So, rather than give money, we provide the services and goods people are looking for to meet their consumption needs or businesses. We have seen from our operations so far that all manner of persons come to us and we do business with them. This, I believe, is what we have been doing.”

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CSR commitment
As a responsible company that believes in giving back to the society, Usman said the bank has so far spent N2. 5 billion on corporate social responsibility (CSR) initiatives since its inception in Nigeria. While pointing out that most of the money spent on CSR was in the north-east of Nigeria which had been ravaged by insurgency, Usman stated that part of the funds was derived from penalty on loan default which in the real sense is an interest and as such can’t be included in the bank’s business funds.

“Since inception in 2011, we have invested over N2.5bn in Corporate Social Initiatives in Nigeria. Part of the funds was from penalty on loan defaulters. We consider proceeds of the penalty as interest so such funds can’t be included in the banking operations. We therefore divert the funds to CSR activities.

“This penalty was put in place so that people won’t take advantage of the privileges. In a situation where the defaulter was able to give evidence of genuine reason for the default, the penalty will be relaxed,” he said.
To confirm that that the bank is a pan-Nigeria institution, he was quick to add that one key focus of the bank in 2020 is to establish more branches in the Southern part of Nigeria to refute the perception that it’s a regional bank.

Non-interest model
Speaking on Jaiz Bank’s Business Partnership Model, he maintained that its Non-interest banking model was based on partnership, risk and profit sharing is crucial for financial inclusion and achievement of the much-desired economic development in Nigeria.

He said unlike the conventional banking model which is profit-oriented; Jaiz Bank’s ethical banking is profit-based and as such crucial for MSMEs who are the major drivers of the Nigerian economy.

According to him, instead of giving out interest-based loans to Entrepreneurs, Jaiz Bank work with them as partners for business growth, while sharing the risk and profit at an agreed ratio.

“We are the face of a new concept in banking. Jaiz Bank’s mode of financing tries to address human needs directly by providing goods and services on a payment basis different from conventional banking that we know. Literarily, that is what non-interest or Islamic banking is doing anywhere in the world.

“It is about providing financing to people who cannot afford to buy directly with their own resources at a time. So, rather than give money, we provide the services and goods people are looking to meet their consumption needs or businesses,” he said.

Usman further explained that contrary to the popular belief, Jaiz Bank offers products like other commercial banks, and the bank’s products and services are available to all Nigerians irrespective of their religious beliefs and affiliations. He stated that Jaiz Bank operates on the Islamic business tenets which prevent it from partnering with businesses in line of gambling, alcohol and pig rearing.

“The important point we will continue to emphasize is that Jaiz Bank products are not religious products. They are open and available to all, irrespective of their faith or religion. We do everything other banks do and we are regulated by the same regulator; The Central Bank of Nigeria.

“The only thing that separates us from conventional banks is that there are ethical principles which we believe that bank and customers must meet before transacting business. For instance, Jaiz bank will in no way open an account or transact business with a beer-brewing company or a manufacturer that is into pig rearing or gambling business,” Usman said.

The Jaiz Bank boss also disclosed that the bank has so far spent N2. 5billion on Corporate Social Responsibility initiatives in Nigeria since it commenced operation in 2011. He added that one key focus of the bank in 2020 is to establish more branches in the Southern part of Nigeria to refute the perception that it’s a regional bank

The bank chief however stated that the rapidity of Jaiz Bank Plc’s earnings growth in last four five years is unprecedented, which he said has made it one of the largest Non-Interest Banks in West Africa.

Meanwhile, analysts have attributed the Bank’s success amid a tough and unpredictable macroeconomic environment to a talented workforce, excellent risk management strategy, friendly commercial and corporate products, and good leadership.

Considering the fact that non-interest banking is a profitable growing global phenomenon practiced in nearly 70 countries across the world including the United Kingdom, Canada, the United States of America and the United Arab Emirate, Malaysia, China, some analysts are of the opinion that Jaiz may be a succour for Nigerian startups, who are craving for trusted financial partners.