Transcript Islamic Micro-finance in Nigeria Issues and Prospect

Islamic Micro-finance in Nigeria
Issues and Prospect
Salaudeen Jubril Abdullahi
Outline
•
•
•
•
•
•
Nigeria in brief
Microfinance in Nigeria
Efforts at Micro-Financing
Islamic Microfinance
Issues with Islamic microfinancing
Opportunities in Islamic Microfinancing
Nigeria
• Population: 173.6 million (2013)
• Area: total: 923,768 sq km
land: 910,768 sq km
water: 13,000 sq km
• Currency: Naira
• GDP: $492.986 billion (nominal; 2015)
$1,105.343 Billion (PPP; 2015)
Official Language: English and French
Micro-Financing in Nigeria
• Perceived deficiencies in the existing financing
schemes for the poor and small businesses.
• Existing community banks and NGO
microfinance licenced by CBN for operations
in 2007
• Over 40% of the licenced MFB have failed
• Frowning at interest on loans due to religious
• Withdrawal of 224 microfinance banks license
in 2010
Efforts of the past
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Financial dualism: Poverty and Unemployment
Rural banking scheme,
Peoples Bank,
Operation feed the nation (OFN),
Green revolution,
Nigerian Bank of Commerce and Industry (NBCI),
Nigerian Agricultural and Cooperative Bank,
Nigerian Economic Reconstruction Fund (NERFUND),
Nigerian Directorate of Employment (NDE),
Family Economic Advancement Programme (FEAP),
Poverty Alleviation Programme (PAP),
Nigerian Industrial Development Bank (NIDB)
Bank of Industry (BOI),
Nigerian Agricultural Cooperative and Rural Development Bank (NACRDB),
Community banking and
Microfinance banking
Islamic micro-finance in Nigeria
• The CBN sent out an Exposure Guidelines on
the Regulation and Supervision of Non
Interest (Islamic) Microfinance Banks in
Nigeria May, 2016
• We have a few groups who have piloted and
they are quite encouraging
• Muslims are focused in Food production and
there are small farm holders which is a ready
market
Issues with Islamic Micro Finance
• Lack of basic infrastructure compounds the
operational difficulties of these banks
• Lack of Skilled labour to operate and manage
Islamic microfinance bank
• Poor banking culture in the rural areas and
among the urban poor
• Lack of awareness and promotion for Islamic
Finance by regulators and practitioners
Islamic Microfinance Prospects
• About 70% of the population engaged in the
informal sector or agricultural production
• Government’s renewed interest and improved
regulatory environment in the microfinance
sub-sector
• Nigerian Muslims are looking forward to have
Islamic Microfinance Institutions
Opportunities
•
•
•
•
•
The new phase of licensing by the CBN
Training and Development opportunities
Opportunities for Takaful and Micro-Takaful
Opportunities for Islamic Venture Capitals
Opportunities for Investors who are looking at
green fields
• Consulting opportunities
• Infrastructure Development opportunities
Summary
• Islamic Micro-Financing has strong potentials
in Nigeria
• There is a need for capacity development for
Islamic Microfinance in Nigeria
• Education of the Mases is required
• Regulation are being put in-place for ease of
operations
• The timing for new entrance is now
End of Presentation
THANK YOU
SALAUDEEN JUBRIL