The convergence of fintech and Islamic finance presents a transformative opportunity to reshape the industry, driving innovation and expanding access to Sharia-compliant financial services. Fintech, according to financial analysts, is a viable platform that can be leveraged to boost Islamic Finance in Nigeria. Mr. Muhammad Jidda, Head Shari’ah Audit and Product Development, SunTrust Bank Nigeria Limited, expressed the opinion in a recent conversation on developments around the non-interest finance market in the country.
According to him, the pathway is harnessing the various spheres of Fintech and Digital banking to grow the market with innovative products and offerings.
Providing further insight he said the COVID-19 pandemic made it imperative to deploy a digital technology strategy for financial services, and fintech was the way to go in the area of increasing non-interest banking activities.
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He noted that through Fintech a lot of awareness and sensitization can be created on Islamic Finance, through the digital and mobile platforms across the country, which could have a wider reach to people in the rural communities. The Islamic Finance manager believed Islamic Finance institutions had key roles to play in the area of increasing the enlightenment on non-interest finance.
He argued for more seminars and workshops to be organized by Islamic Finance institutions, as they develop products and connect with all segments of the market, thereby increasing acceptability. Some of the Islamic Finance products include; Mudaraba, Musharakah, and Istina amongst others.
He cited the example of how SunTrust Bank as providing capital for people in the rural areas, enlightening them on the use of mobile phones for banking and other financial activities, which in turn could improve financial inclusion.
Speaking further he agreed with the call for the standardization and the setting of guidelines for Islamic Finance products by regulators from the Central Bank of Nigeria, Securities and Exchange Commission, and the National Insurance Commission or Pension Commission.
He also mentioned the ‘Wahid’ investment instrument as one of the Islamic financial technologies used in Pakistan and in some parts of Asia to provide seamless services to those who are underbanked and financially excluded.
“Alternative insurance Takaful and also Islamic crowdfunding can be used and if all the structured products on insurance and banking are utilized it will make it easier for the underbanked to tap into the non-interest market,” he said. By harnessing the power of technology, fintech has the potential to propel the growth and global reach of Islamic finance, ushering in a new era of financial inclusion and sustainability.
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