List of 4 Islamic Banks in Nigeria As Sharia-Compliant Finance Industry Hits N5trn
- Nigeria has four fully licensed non-interest banks regulated by the Central Bank of Nigeria, according to NIFIAN.
- The country's Islamic finance industry has grown to about N5 trillion, covering banking, pensions, insurance and capital market investments.
- A federal Government Sukuk offer of N300 billion attracted subscriptions of N2.2 trillion, highlighting strong investor demand.
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Nigerians seeking banking services that do not involve interest payments have four fully licensed institutions to choose from, according to the Non-Interest Financial Institutions Association of Nigeria (NIFIAN).
The banks are Jaiz Bank, LOTUS Bank, TAJBank and The Alternative Bank, all regulated by the Central Bank of Nigeria (CBN).
Source: Getty Images
Unlike conventional banking, non-interest banking does not involve charging or paying interest. Instead, transactions are structured around asset-backed financing, trade, investment and risk-sharing arrangements.
The development comes as Nigeria's Islamic finance industry continues to expand. Abdullahi Idris Umar, managing director of One17 Capital Limited, said the industry's value had reached about N5 trillion, covering banking, pensions, insurance and capital market investments.
4 banks offering non-interest banking in Nigeria
NIFIAN's membership directory identifies the following four fully licensed non-interest banks:
1. Jaiz Bank began operations in 2012 as Nigeria's first non-interest bank, providing services to individuals, businesses and government institutions.
2. LOTUS Bank received its banking licence in 2021 and offers ethical banking services to personal and business customers.
3. TAJBank obtained its CBN licence in 2019 and commenced operations in December of the same year, providing services through digital and physical channels.
4. The Alternative Bank operated as a non-interest banking window within Sterling Bank from 2014 before receiving a standalone licence in 2023.
Islamic finance attracts growing investment
Speaking on Trust TV's Business Daily, Umar cited the Federal government's Sukuk programme as evidence of rising demand for non-interest investment products.
DailyTrust reports that he said an initial N300 billion Sukuk offer attracted subscriptions worth N2.2 trillion, significantly exceeding the amount available.
The federal government has conducted seven Sukuk issuances, raising more than N1 trillion for infrastructure development. The programme has also funded 124 road projects across the country.
Umar said the government could extend Sukuk financing to education, healthcare, potable water supply and environmental services.
He added that independent annual audits provided an additional layer of accountability by checking whether funds had been deployed for their intended projects.
Beyond banking, non-interest financial products are gaining ground in Nigeria's pension and capital markets.
Umar disclosed that Fund VI, a non-interest pension fund, grew from about N7 billion in 2021 to N54 billion in 2024.
Source: Twitter
Nigeria's capital market also has close to 25 non-interest mutual funds, offering investors access to equity and fixed-income investments.
On small business financing, Umar cited partnerships involving Jaiz Bank, the Small and Medium Enterprises Development Agency of Nigeria and the Bank of Industry as efforts to improve access to capital through risk-sharing arrangements.
He also disclosed that the Bank of Industry had received CBN approval to establish a non-interest financing window, while the Federal Mortgage Bank of Nigeria had introduced non-interest mortgage products, recently launched in Kano.
Bank78 MFB begins operation in Nigeria
Earlier, Legit.ng reported that Bank78 MFB has officially commenced operations as a private digital lender in Nigeria.
The bank stated that although it is inspired by private-banking culture and mindset, it is deliberately designed for the mass-affluent everyday Nigerian, offering a secure and premium digital banking experience.
The bank said it aims to bridge the gap between fast-growing fintech firms and traditional legacy banks.
Source: Legit.ng
