Jaiz Bank Provides Nearly ₦800bn in Financing
…Urges More Support for Exporters
By Patience Ikpeme
Jaiz Bank has provided out almost ₦800 billion financing to customers, and more than ₦100 billion of that has gone into trade in cocoa, cashew and other products Nigeria sells abroad, its Managing Director, Dr Haruna Musa, has said.
Dr Musa spoke on Tuesday in Abuja at a breakfast session of the Nigeria Economic Summit (NES32). He said banks that do not charge interest should make it a priority to lend more to exporters, small businesses and other sectors that produce goods and services, because this would help the economy grow and give people jobs.
He said a bank must first understand how a business works and how money comes in and goes out before deciding how to finance it. “In the non-interest banking model, we have various contracts, and these contracts must align with the business model and cash flows,” he said.
According to him, business owners who want money for exports or other ventures should know the options open to them, while banks must find the arrangement that fits each business. He asked entrepreneurs to explain clearly what they need so that the bank can choose the right structure. He said this applies to people who want to start selling abroad as well as those who want to set up a factory.
Dr Musa said exports deserve more attention because they can create jobs and boost development. He also called for more money for small businesses and manufacturers, saying local industries need help to produce more and make the economy stronger.
Solar energy, he said, is another area where non-interest banks can step in, especially to supply power to hospitals and other important places. He urged banks to back the whole solar business chain, not just the fixing of solar panels. On farming, he said banks should finance every stage, from seeds and fertiliser to processing and getting produce to buyers.
He also wanted more women, young people and rural dwellers to enjoy non-interest banking services, since many big banks have few branches in their areas. Banks, he said, must study the money problems these groups face and find better ways to reach them.
To bring in more customers, Dr Musa said banks should make greater use of mobile phones and work with financial technology companies, known as fintechs. He told the audience that he has gone almost a year without entering a bank branch because he does his banking on his phone. Such channels, he said, can help banks serve more people, improve service and rely less on physical branches.
Also at the event, Professor AbdulRazzaq Alaro of the University of Ilorin, who teaches Islamic Law, said non-interest finance can create jobs and spread wealth because it sends money into real business activity. He said the system works on the basis of sharing risk, backing deals with real assets and tying money to actual trade or production.
“When you channel money to productive economic activities, you automatically create jobs. You automatically get economic growth, and that will ultimately result in shared prosperity for all,” he said.
Professor Alaro said Nigeria’s big population, young workforce and plentiful farm and oil resources give the country a good chance to grow this kind of banking. He named small businesses as a key area, since they drive production and employment.
He explained that different Islamic finance contracts suit different needs. Salam, he said, can support farming, while Istisna can be used for buildings, infrastructure and other projects where a specific item must be made and delivered.
The professor also spoke about the National Halal Economy Strategy, which aims to help Nigeria earn a share of the global halal market, put at about $8 trillion. He said Nigeria hopes to add up to $12 billion to its gross domestic product through the plan over the coming years. Non-interest banks, he said, can gain by funding businesses that serve this market, and the sector could become their area of specialty because they understand the rules of Islamic finance.
He said that if banks put more money into productive businesses, the sector could create jobs, grow the economy and improve the lives of Nigerians, with the gains reaching many parts of society.
