Corruption, Rising Debt: Expert Suggests Islamic Financial Products As Cure - THE DAILY CRUCIBLE



Friday, September 20, 2019

Corruption, Rising Debt: Expert Suggests Islamic Financial Products As Cure

• Prof. Binta

An economist, Prof. Binta Tijjani Jibril, has advised the Federal Government(FG) to consider Islamic financial products when looking for foreign credit facilities in future instead of approaching the conventional international markets that levy crippling interest rate and other stern conditions on borrower - countries.

Binta Jibril said since Islamic financial products are transparent and interest - free, it will not only help to curb corruption in the country but also reduce the burden of foreign debts if the FG avails itself of this alternative credit facilities whether local or international.

The Professor who is the Director, International Institute of Islamic Banking and Finance, Bayero University, Kano, gave the advice  at Tai Solarin University of Education(TASUED), Ijagun, while speaking with  reporters shortly after training 150 Small and Medium Enterprise operators drawn from Southwest States and Kwara recently.

The three day training on "Financing Start - Ups And SMEs  Using Islamic Financial Products," was put together by Bayero University's Institute of Islamic Banking and Finance in conjunction with TASUED.

She expressed worry about rising debt profile of the country, and blamed it in part on government's reliance on interest yielding financial products all the time when "better, cheaper and cost effective products" like the Islamic financial products exist as alternatives.

She urged the government to create awareness about Islamic Banking to enable Nigerians benefit from it, advising Nigerians not to allow sentiments to rob them of the opportunity of accessing the gains of Islamic financial products, and citing United Kingdom, United States of America, Kenya as countries where people are making Islamic financial products to the fullest without sentiments.

"I am very worried about the debt of the country, I am not only a student of Islamic banking and finance, and I am a student of economics. If you see the cost of debt on our neck up till now despite the Paris fund issues, the waver and everything, you will be shocked and this is because Nigeria had consistently relied on interest based loans from international markets.

"What we are saying is that there are cheaper alternatives of funds; cheaper, better and more effective. Just consider the Sukuk for example, federal government want to raise 100 billion, the issue Sukuk of 100billion within one week, people have paid up and the government is building road, or Hospital or School and I am benefiting, everyone is benefiting in the project. 

"With Islamic option, everything has to be transparent, if you issued Sukuk today and you say you are going to use it to build so and so hospital, you must use it for the project, and you cannot divert the fund. Look at how the particular product can help to solve our corruption and it is participatory because if you look everyone will participate in the raising of the fund. 

"The federal government should improve its participation on Islamic banking and it should give it more awareness so that the people can know that the benefit is for everyone. 

"We should not allow sentiment to prevent us from enjoying the full benefits of Islamic financing, if every other international countries are enjoying it.

"The non Muslims can benefit and they are benefitting from Islamic banking, many of their customers are actually non Muslims, some of their investors are people who have invested in their share and they are non Muslims. 

"Islamic finance is an Islamic option which is available for Muslims and non Muslims that is why if you like the global trend, you will see that international countries are tapping into the new system.

" Government should ease the process of licensing Islamic banks particularly Islamic microfinance banks because there are a lot of values in that. For example, recently, you will be aware that the capital base for Islamic microfinance bank was jacked up  from N20 million to N200 million. To open and operate a microfinance bank, that is a huge amount. 

"Off course, they have their good reasons as regulators, but, looking again at this particular issue will go a long way in facilitating the growth of more microfinance bank including Islamic microfinance bank.

" If we have performing microfinance bank all over the place, it will promote easy access finance to small and medium scale enterprises which include farmers, market women, among others and this will enhance economic development.

"Many young people have good ideas, but, to put them into practice, they need funding and this is just too much for government. The earlier the government realizes this, the better, it should facilitate the growth of the economy through its policy and regulations," she said.

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