Friday, December 31, 2021 / 11:00AM / Bukola Akinyele-Yisau for WebTV / Header ImageCredit: WebTV

The global Islamic finance industry will continue itsgrowth trajectory with an estimated total global asset of $4.95trn by 2025 andaverage growth of 8% in the next five years.

According to the Islamic finance development report2021, the main drivers of development in the industry are; quantitativedevelopment, knowledge, governance, corporate, social responsibility, andawareness.  

Despite the numerous socio-economic challengesexperienced due to the COVID-19 pandemic, the year 2021 provided newopportunities for businesses. The year witnessed various digital initiativesand growth in the financial services industry. At the moment, more than 4.52 billion people worldwide have received a Covid-19 vaccine, equal to about 58.9 percent of the world population (New York Times).

Amidst the issues, the Islamic Finance industrycontinues to attract new players and evolve its products and services to bringin more active participants across the globe.

Key non-interest finance markets/Eventsin Nigeria that shaped the year 2021

1. TheSecurities and Exchange Commission Nigeria SEC approved a N30bn Corporate SukukProgramme targeted at affording housing development 
2. NASFATpartners Halal invest to enhance ethical financing in Nigeria
3. August 2021Ahmadu Bello University, Zaria begins undergraduate, postgraduate courses inIslamic banking
4. Lotus Bankin June got a licence from the Central Bank of Nigeria (CBN) to operatenon-interest banking in Nigeria
5. August2021, Noor Takaful Insurance Plc pays a total of N63.8m Surplus topolicyholders
6. December2021, Sterling Bank Plc received the CBN approval to operate Islamic BankingSubsidiary
7. The IslamicDevelopment Bank IsDB approved $150.52m support for Nigeria SpecialAgro-Industrial Processing Zone and $29.75m Front-End Engineering Design PhaseII
8. In December2021, Nigeria issued the fourth Sukuk. The N250bn Sovereign Sukuk wasover-subscribed by N865bn. This outcome represents a subscription of 346% 
9. TheNational Pension Commission (PENCOM) introduced the non-interest fund VI thatcomplies with Shariah Principles.  
10. IslamicFinance Weekly organized two Islamic finance webinars on the capital market andTakaful.  The webinars brought together regulators, operators, experts andindividuals from the SEC and NAICOM.
11. In November2021, the African Islamic finance conference hosted its 5^th AICIF inAbuja. The 2-day conference brought together stakeholders across the globe.
12. Also, inNigeria, the Non-interest financial Institution Association of Nigeria (NIFIAN)started its series of webinars. The NIFIAN members offer savings, Credit,investment, Takaful and microfinance services to the ethical-minded investorsdemography. 
13. TheInstitute of Islamic Finance Professionals (IIFP) hosted its annualstakeholder's conference and induction ceremony in Lagos, reaffirming commitmentto Islamic finance education in Nigeria
14. The University of Lagos announced that it wouldcommence a Post Graduate Diploma and Master programmes in non-interest Bankingand Finance

What toexpect from the non-interest finance market in Nigeria 2022

1. In Nigeria, there will likely be more Sukuk issuance that will focus oncritical sectors like education, health care system, energy projects.
2. There is a need forgovernment and regulatory incentives to drive participation in the Islamicfinance sector
3. More marketissuances are likely, Islamic friendly products, and Islamic CommercialPapers (ICPs)
4. Stakeholders in thenon-interest finance market will have to collaborate to improve awareness andmarket education
5. There is a need forknowledge building in the capital market to educate investors that non-interestfinance is for Muslims and all investors.
6. There will be a needto enhance liquidity in the market through non-interest finance.
7. It is expected thatplayers in the non-interest finance market will work assiduously to improve thequality of their services. Islamic Finance can gain the needed trust itdeserves to scale.
8. There is a need for increased adoption of Islamic Fintech and DigitalBanking
9. There is a need for more non-interest banks in the country to cater tothe unbanked population and bridge the financial exclusion gap in thecountry 
10. It is expected that there will be more Sharia Compliant Products in themarket that are simplified.
11. There is a need for more support from the Islamic Development Bank isneeded to fund Nigeria ailing economy
12. Regulators like CBN, SEC, PENCOM, NDIC, NAICOM need to fully support thenon-interest banks, Takaful industry and other non-interest finance sectors inNigeria
13. States need to explore issuing Sukuk to finance infrastructure and othercritical socio-economic projects.
14. Increase activities in (Takaful) Islamic insurance
15. We need to see more non-interest finance instrument fundinginfrastructure such as Waqf, Zakat and Sadaqah
16. There will be a need to establish more Islamic Microfinance institutions
17. On AfCFTA and Islamic finance, there is a need for more awareness of howIslamic financial instruments can support the African Continental Free TradeArea.  
18. The Islamic finance weekly will continue its webinars series in Nigeria
19. In conclusion, a collaboration between the regulators, operators,academics, professional bodies, and non-interest financial institutions iscritical for the growth of the non-interest finance market. 

In all, 2021 was an eventful year for the non-interestfinance market in Nigeria as the awareness, discussions, and consideration as averitable source of financing infrastructure and sustainable development gainedtraction in the country.

Despite the COVID-19pandemic, Omicron variant, and global economic uncertainties, the non-interestfinance market in Nigeria will witness significant growth prospects. However,the market still faces the challenge of standardization, limitation ofproducts, adoption of digital banking solutions and a considerable gap inIslamic finance education.   

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