No Interest: Tinubu’s Government Targets More Loans From Islamic Banks, Lists Benefits

No Interest: Tinubu’s Government Targets More Loans From Islamic Banks, Lists Benefits

  • The federal government will be targeting more Islamic institutions' financial options for loans to fund infrastructure projects and drive economic development
  • Nigeria is home to the largest population of Muslims in sub-Saharan Africa, with over 80 Million Muslims
  • In recent times, Nigeria has opened itself to Islamic financing to establish a hub for non-interest banking

Dave Ibemere has over a decade of experience covering Business and the Economy

The administration of President Bola Ahmed Tinubu has announced its intention to get more loans from Islamic financial institutions.

Kashim Shettima, the country’s vice president, disclosed this in its keynote address at the 6th African International Conference on Islamic Finance (AICIF) held in Abuja, BusinessDay reports.

President Tinubu islamic bank
President Bola Tinubu at the Saudi-Nigeria Investment Roundtable in Riyadh Photo credit: Presidency
Source: Twitter

According to him, Islamic finance has proven to be a viable option for development funding. He said Nigeria will continue to explore Islamic finance tools such as Sukuk to tap into local and international investments.

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His words:

" Islamic finance has proven to be a viable option for development funding as evidenced in the recent federal government’s 6th sovereign sukuk issuance which received about 435% subscription.
"In the deal, the government had offered N150 billion but eventually raised over N625 billion.
“This shows an increase in the level of public trust and awareness about the financial product."

More benefits of Islamic banking

The VP also noted that Non-interest banking and microfinance could potentially serve as a tool to drive industrialisation, SME growth, and micro-credit activities.

He further assured that considerations will be made to enhance the visibility of the Islamic finance market in line with global trends and within national policy goals for financial literacy, inclusion and the transition of millions of Nigerians to the formal economy in the near future.

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Shettima added that these interventions are geared towards funding sustainable development projects and enabling the Islamic financial markets to contribute to the country's clean and sustainable future.

Nigeria repays China, Islamic bank, others N3.63tn debt

Meanwhile, in another report, Legit.ng revealed that Nigeria has successfully repaid part of its debt to countries and institutions.

The report provided a breakdown of how the money was paid to China and Islamic banks, among others.

Although the repayment is good news, the Nigerian government has borrowed another N6.69 trillion.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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