Ogun gets first non-interest microfinance bank

Ogun gets first non-interest microfinance bank

Hayat Trust Non – Interest Microfinance Bank Limited, the first Islamic non–interest microfinance bank in the country has opened a branch along Folagbade – Ibadan road banking hub of Ijebu Ode, Ogun State, saying it is poised to provide inclusive financial services to small and medium scale entrepreneurs.

Mr Adebanjo Olamiji of Leadfort Insurance Brokers who announced this while giving the firm’s goodwill message said he would also personally open an account with Trust Non – Interest Microfinance Bank.

However, a lecturer at the University of Lagos, Prof. Tajudeen Yusuf, has decried the exclusion of no fewer than 60 percent of the Nigerian population from access to credit facilities from the country’s conventional financial system.

Prof Yusuf said no country can develop when a significant percentage of its population is financially excluded as is the case in Nigeria, saying the situation has brought about stunted economic growth and development.

Speaking at the official opening of the Al- Hayat Trust Non –interest Microfinance Bank owned by Al-Hayat Relief Foundation in Ijebu –Ode, Ogun state tagged; “ The roles of islamic Microfinance bank in the society,” Yusuf explained that part of significant roles of Islamic Microfinance banks system is financial inclusion aimed at providing financial services to those who are traditionally excluded from the formal financial sector, particularly the poor, rural populations, and small entrepreneurs.

By offering Sharia-compliant financial products such as Qard al-Hassan (benevolent loan), Murabaha (cost-plus financing), and Musharaka (partnership), these banks ensure that individuals from all socio-economic backgrounds have access to financial resources.

The professor of Risk Management and Insurance noted that One of the primary objectives of Islamic microfinance is poverty alleviation by way of providing small-scale financing to entrepreneurs and small businesses, Islamic microfinance banks empower individuals to generate income, create employment opportunities and improve their standard of living.

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He stressed the need for concerted effort for more SMEs to grow so as to boost the nation’s Gross Domestic Products and reduce unemployment in the society.

“As it is happening in the banking sector, the same is happening in the insurance sector, Capital Market as well as asset management because of its inclusiveness.”

According to him, “Islamic microfinance banks play a significant role in society, particularly in regions where conventional banking services are not readily accessible or where there is a large Muslim population seeking Sharia-compliant financial services. Here are some of the key roles and contributions of Islamic microfinance banks.”

Noting that part of its roles is Promotion of Ethical and Socially Responsible, Support for Small and Medium Enterprises (SMEs], Risk-sharing and Profit-sharing, community Development as well as empowerment of women in the society.

He further stated that because of its inclusive nature and what Islamic banking stands for, the World Bank cannot close its eyes for its developmental progress.

He noted that King Charles of the United Kingdom is also advocating that the United Kingdom to be the epicentre of Islamic finance in the world because of the pivotal institutions that have played in boosting the economy of each nation.

The don pointed out that most of the conventional banks are also seeking license of Islamic zero free interest rate because they know that Islamic zero interest banking will soon take over the banking sector.

He said the World Bank recognises and patronizes the Islamic banking system while noting the active participation of developed countries such as Britain, Japan, and the US.

Speaking earlier at the event, the president of the foundation, Dr. Asif Olatubosun Azeez emphasized the pivotal role played by Hayat Trust Non-Interest Microfinance Bank in fostering community development, and contributing to socioeconomic stability in Nigeria.

He revealed that the conventional license was obtained when all attempts to secure a full-fledged Non-Interest Microfinance Bank license proved unsuccessful.

The chief lecturer at Sikiru Adetona College of Education, Science and Technology, Ogun State, noted that Al-Hayat Microfinance Bank for the period its operated before securing a full- fledged non –interest microfinance has Customer base grew to 34,066 and has also disbursed 3.9 billion to 17,085 customers while the total assets of the bank grew from 81.4million to 507.7million as well as increased in shareholders from 30 million to 74.4million.

Ogun gets first non-interest microfinance bank