Standardization and Awareness, Key To the Growth of Islamic Finance in Nigeria - Mr. Banji Fehintola

Standardization and Awareness, Key To the Growth of Islamic Finance in Nigeria - Mr. Banji Fehintola
BukolaAkinyele for Proshare WebTV / Header Image Credit: Proshare WebTV
Standardization and increased awareness are part of the key elements that will facilitate the growth of Islamic Finance in Nigeria. The Senior Director and Head of Treasury and Financial Institutions of the African Finance Corporation, AFC, Mr. Banji Fehintola, said on a Proshare WebTV programme, Islamic Finance Weekly.Mr. Fehintola noted that from a global perspective, Islamic finance still suffers from standardization problems preventing it from keeping pace with conventional Eurobonds. He also noted that the issue of premium that is often demanded by investors must be addressed to deepen the product. He believed Islamic Finance should become widely accepted in the global financial market, and viewed it as a potential mainstream source of financing.The Head of Treasury and Financial Institutions for the AFC, also called for increased awareness of Islamic Finance in Nigeria, through conferences, seminars, thought-leadership columns, research reports and media campaigns. Fehintola stressed the need for Nigerians to understand the value and provisions of the product, which is geared towards deepening financial inclusion and driving economic prosperity.
 
At a time when Nigeria faces a huge infrastructural deficit, Fehintola emphasized the need for the nation to tap into the opportunities that Islamic Finance provides to scale its financing of critical infrastructure projects across the country. Speaking on Sukuk that have been issued to the tune of N200bn by Nigeria in the past two years, he said they were successful. Sukuk was a positive development in terms of deepening the local capital market, he argued.

 He lauded the Nigerian government for taking the lead in adopting the Islamic Finance product in the country. "Nigeria has taken a great step in terms of issuing Sukuk, and they are planning to issue the third one. Also, with time we will see corporate issuances in the Sukuk space," Fehintola said. On the issue of Issuing foreign-denominated Sukuk (The Islamic Bonds), he identified the United Kingdom and South Africa as nations that have issued them. Mr. Fehintola said the AFC has been at the forefront of pushing and tapping into the liquidity provided by Islamic Finance. He informed WebTV that a couple of years ago, the AFC got a line of finance from the Islamic Development Bank (IDB). He also noted that there had been a robust collaboration between AFC and IDB across projects. "In terms of other sources of Islamic finance about three years ago, we issued our first Sukuk bond 100% lower by our structure, along the line of that financing we were able to tap investors in Malaysia, other parts of Asia and the middle east and it was an opportunity for us to diversify our funding and to tap into a big pool of Islamic funding" He said. Fehintola also believed that beyond the Islamic financial institutions and the Islamic investor base, all hands must be prepared to help Nigeria bridge its infrastructure gap.