- Professional Journey:
Could you walk us through your professional journey and what inspired you to establish Lifeline Alternative Finance Limited? What was the key motivation for focusing on Islamic, non-interest finance as a tool for economic development in Nigeria?
I started my professional career as a banker with Nigerian Export Import Bank, the Export Credit Agency in Nigeria. I left the bank to further my education in Islamic finance at the International Islamic University Malaysia (IIUM). I was at the IIUM when the first full fledged Non- Interest bank, Jaiz Bank Plc was licensed by the Central Bank of Nigeria to commence non- interest banking in the country. Prior to the establishment of the first full fledged non- interest bank, a meaningful number of Muslims were financially excluded owing to the unavailability of a banking and financing system that is in tandem with their faith. Many Muslims who were entrepreneurs found it difficult to access financing from the conventional financial institutions before the introduction of non- interest banking system. After my graduation, the inspiration to establish a firm that would contribute to the growth of Islamic banking and finance industry was conceived. The Lifeline Alternative Finance Limited (LAFL) was co-founded and has been one of the Islamic finance consulting firms that are championing the promotion of Islamic finance industry in the areas of research, consultancy and training.
- Company Positioning and Model:
How does Lifeline Alternative Finance differentiate its services from both conventional microfinance institutions and other emerging Islamic finance players in Nigeria? Could you elaborate on the specific Shariah-compliant products (e.g., Murabaha, Ijara, Musharakah) that form the core of your offerings?
As you are aware, the LAFL is a consulting and consortium firm. Our services are distinct in the Islamic banking and finance industry in Nigeria because we focus on the compliance aspect of the industry to the Islamic finance principles. We accept assignments we have expertise to execute in efficient and effective manners. The knowledge and experience of our team in the conventional banking and finance industry contribute to our strengths as an Islamic finance consulting firm.
- Market Reception and Client Profile:
What has been the reception to your services from the Nigerian populace? Are you seeing demand primarily from the Muslim community, or is there growing interest from individuals and MSMEs of other faiths seeking ethical financial alternatives?
Our expertise in the industry has made our services to be accepted by the players in the Islamic finance market. Our customers cut across all the branches of Islamic finance industry: banking, takaful, microfinance, fund management and institutions that seek shariah review and advisory services for their operations. The patronage of non- interest banking and finance industry is general and has been so impressive. Both Muslims and non- Muslims consider the industry as an opportunity to get ethical finance for their businesses. There is no any discrimination that is glaring among the Nigerians toward the industry.
- Operational Landscape and Challenges:
What are the most significant operational, educational, or perception-related challenges you face in promoting Islamic non-interest finance in Nigeria? How do you address the common misconception that it is only for a specific religious group?
The challenge is a general one, and it is not specific to our firm. There is still knowledge gap and specifically the practice and operation aspects are still at foundation level. The acceptability of Islamic finance system is still at introductory stage and a lot of advocacy is on going. It may interest you to know that despite little awareness of the system, the industry is gaining more acceptance than expected from the people of other faiths, notwithstanding their initial opposition to it ab initio. The number of non- Muslims that are having one business or the other to do with the Islamic financial institutions, especially Islamic banks is impressive.
- Regulatory Environment:
How supportive is the current regulatory framework, including the role of the Central Bank of Nigeria and the Financial Regulation Advisory Council of Experts (FRACE), for the growth of Islamic finance? What key regulatory or policy adjustments would you advocate for to accelerate its integration into the mainstream financial sector?
The support of the Central Bank of Nigeria (CBN) and other regulatory bodies for the Islamic finance industry cannot be overemphasized. Recently the CBN drafted and released the money market instruments that are shariah compliant for liquidity management of Islamic banks in the country. The National Insurance Commission (NAICOM) inaugurated its Takaful Advisory Council to deepen the regulatory roles of the commission. The Pension Commission of Nigeria also introduced and approved ‘FORM 6’ for the Pension Fund Administration (PFA) to have non- interest investment window. This is to enable the Nigerian employees who wish to choose non- interest investment portfolio for their pension fund with their PFAs in Nigeria. The support has been very impressive and it is believed that many other encouraging steps are underway from these regulators.
- Financial Inclusion and Social Impact:
In your view, what unique advantages does Islamic finance offer in bridging the financial inclusion gap in Nigeria, particularly for undeserved segments like women entrepreneurs, youth, and smallholder farmers?
Integration of Islamic finance system into the Nigeria banking and finance sector has contributed greatly to the financial inclusion strategies of the country. The integration has enabled many Muslims who had earlier been financially excluded because of their religious belief, which hindered them from having any business dealings with the conventional financial institutions to now participate actively in the Nigeria banking and finance industries. Since the introduction of Islamic finance system in Nigeria, there have been many agitations from Muslim populace for the inclusion of non- interest intervention schemes in the various federal government social financial interventions for various segments.
- Strategic Advice for the Industry:
What practical advice would you give to Nigerian policymakers, conventional financial institutions, and international development partners looking to successfully integrate or support the growth of Islamic finance models?
The practical advice I can give the policymakers on non- interest banking industry is to provide clear regulatory framework and continuously monitor and evaluate the bank;s performance to ensure that they are operating within the framework especially shariah compliance. The government should consider the integration of non- interest financing modes in the financial intervention schemes for the vulnerable citizens. Non- interest banking system is steadily gaining market n the banking industry, it is a thoughtful idea for the conventional banks to explore the opportunities by opening a non- interest bank window or subsidiary to tap from the emerging market.
- Vision for the Future:
What is your ultimate vision for the role of Islamic non-interest finance in shaping a more inclusive, ethical, and resilient Nigerian economy over the next decade? What is your final message to the global Islamic finance community about the potential of the Nigerian market?
The ultimate vision for the role of non- interest finance industry is to re-think the ethical basis of liquidity management arrangements as they are being practiced in the global Islamic banking and finance industry for possible replication. One of the major challenges facing the industry in Nigeria is limited liquidity management instruments that are shariah compliant. The development of non- interest interbank markets that can provide the banks with a platform to manage their liquidity more efficiently is very crucial for the industry. The message I have for the global Islamic finance players is to see Nigeria as a hub of Islamic finance in the west Africa. The market is wide enough to accommodate foreign players in the industry and the Nigeria government is doing enough to make the business environment conducive for the industry.