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

Thank You Salaudeen Jubril End of Presentation Thank You Salaudeen Jubril