NIFIAN Explores New Products to Increase Liquidity for Non-Interest Banks

The Non-Interest Financial Institutions Association of Nigeria is collaborating to develop new products approved by the Central Bank of Nigeria (CBN) that would improve the liquidity of non-interest banks. Mr. Hassan Usman, the MD/CEO of Jaiz Bank Plc, disclosed this while discussing “Repositioning Non-Interest Banking to Deepen Financial Inclusion in Nigeria.”

He said the aim was to encourage more collaboration and synergy in the non-interest financial market and to unlock more opportunities for the industry’s growth.

The MD/CEO of Jaiz Bank described the revised guidelines of the CBN for non-interest finance instruments as a welcome development and believed it would bring efficiency to the industry. The move would ensure that non-interest banks become more assertive in their treasury operations.

He believed there should be a broader approach to financing and sectoral support, which covers micro-enterprises, corporates, SMEs, women, farmer groups and the entire spectrum of society.

Speaking on the efforts around collaboration with financial technology firms, he said it had become a reality, and Jaiz Bank was not ignoring fintech.

He said, “Jaiz Bank is working closely with fintech to support deliberate channels for improving digital services and opportunities, to increase value and diversify its operations for stability and growth in Nigeria and Africa.” With global economic uncertainties characterised by a looming recession and rising inflation in developed and developing nations, he was optimistic that Islamic finance would navigate the challenges due to the nature of operations and ethical principles.

According to him, the balance sheets of non-interest banks are supported by contracts with significant asset backing that appreciate the current inflation level. He said Islamic finance operations and financing are in line to solve economic issues, with contracts that are in tune with risk-sharing with customers as part of steps to reduce inflation effects and economic sabotage.

The bank has operated for a decade in Nigeria; he said Jaiz Bank had grown year-on-year by about 30% since 2016. Profit had increased by almost 40% annually as of 2021. He observed that it was among the quoted banks on the NGX exchange, with one of the best returns on equity at 20%.

Mr. Hassan Usman, the President of NIFIAN, said Islamic finance appeals to all, particularly those who want to have value for their funds, balance their contracts, share risk and are guided by ethical principles.