Nearly 80 countries around the world are implementing interest free/islamic bank, which offers almost all the same financial services as traditional banks. The fact that Islamic banks do not finance alcohol, tobacco or gambling, nor pay or collect interest, is a major difference. Additionally, the funding model is not based on speculation, unpredictability or deception. Countries like UK, Canada, United States of America, UAE, Malaysia, China, Singapore, South Africa, Kenya, etc. are among the nations that practice it, as well as many international financial institutions like HSBC, Citibank, Barclays Bank, Standard Chartered, etc.
Initially, stakeholders were unfamiliar with Islamic or interest-free banking and unaware that it was a different approach to integrating or diversifying the financial system. A few people misunderstood how it would work and believed it was a charity service. However, one bank that practices this Islamic/interest-free banking model and raises awareness about it is Jaiz Bank Plc.
The financing strategy of Jaiz banks is oriented towards the real economy and mainly involves profit and loss sharing agreements, profit margins, leasing and partnerships. In interest-free banking, Taj Bank, Lotus Bank and Sterling Alternative Finance are their competitors.
About Jaiz Bank Plc.
Jaiz Bank Plc grew out of the former Jaiz International Plc, which was founded in 2004 with the aim of creating Nigeria’s first fully-fledged interest-free bank. In November 2011, Jaiz Bank received a regional operating license from the Central Bank as an interest-free bank, allowing it to operate geographically in one third of the country. The bank began full operations the following January, with three branches in Abuja FCT, Kaduna and Kano. Its products and services include:
Personal Banking (current account (Quarter), Savings account (mudaraba), Jaiz Kids Account (Mudaraba), JAPSA term account (Mudaraba), home account
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Business Banking: Jaiz wakala Investment, working capital financing (Murabaha), Project Finance/Construction (Istisna’), Rent sale (IjarawaIqtina Corporate) Finance, Jaiz Ijara Corporate Services, Equity-based Finance (Musharakah), bonds and guarantees (Wakala/Kafala)
The others are agricultural finance, MSME finance, trade finance, special support facility
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board of directors
The board of directors is made up of men of experience and caliber, but for the sake of brevity, we will focus only on the president and chief executive officer.
Alhaji (Dr) Umaru Abdul Mutallab, CON- President
Alhaji Mutallab is a well-known businessman and former Minister of the Federal Republic of Nigeria. He is also a former Executive Vice President and Managing Director of United Bank for Africa (UBA) and Chairman of First Bank of Nigeria Plc. He is a chartered accountant. He is a member of the Institute of International Bankers Association (FIBA) in the United States and of the Association of Chartered Certified Accountants (ACCA) in the United Kingdom.
Current MD/CEO Hassan Usman will leave the stage on October 16to be replaced by Dr Sirajo Salisu who is the current Executive Director, Business Development, North.
Hassan Ousman – CEO/CEO
He was appointed Managing Director of Jaiz Bank Plc in June 2016. He is an accountant by training, having obtained an undergraduate degree in accounting in 1985 from Ahmadu Bello University, Zaria, Nigeria, and became an associate member of the ICAN in 1989. and Chartered Institute of Bankers of Nigeria (CIBN). He obtained a graduate degree in management in 1995 from the Maastricht School of Management.
Mr. Usman also completed Oxford University’s Advanced Management Program in 2002 and worked in several companies before joining Jaiz Bank.
The bank has other board members, management staff as well as its shareholder groups which include the Islamic Development Bank, foreign institutional and private investors, and Nigerian private and institutional investors.
The bank has a market capitalization of NGN 31.1 billion and closed its last trading day on the Nigerian Stock Exchange at NGN 0.90 per share (NGX). JAIZBANK traded 401 million shares in 2,458 trades worth NGN 346 million during the period, with an average of 6.36 million shares traded per session.
The bank said its balance sheet grew to 300 billion naira at the end of the 2021 financial year, with an average growth of 30% so far, year-on-year, and a profit margin of 40 % over one year.
Since its inception, other critical metrics such as customer deposits, branch network and profitability have all increased year on year.
- The bank started with a registered capital of around N5 billion in 2012, it now has a market capitalization of N31.1 billion.
- Its branches have grown from three when it was created to 45.
- First a regional bank, the bank is now a national franchise, with branches in the southwest and south-south of the country. Other branches are open
- Won awards such as the Most Improved Islamic Banking Awards in 2020 and 2021, respectively, from the Global Islamic Finance Awards (GIFA).
- Jaiz Bank holds the record of being the first Islamic bank in the world to break even within the first three years of operation, even when there were no Islamic banking and financial instruments to invest in the country.
Bank Jaiz and other Islamic banks have potential in emerging markets. However, they will not be able to finance market segments contrary to its ethics and core values, and like other conventional banks, they face the same risks such as credit, market, operational and of liquidity. Also, Islamic/interest free banks.
However, the prospects for Islamic/interest-free banking models are not inconceivable, especially after gaining popularity and helping some financial institutions avoid the worst of economic collapse and global recession. Indeed, this model is not vulnerable to losses resulting from investments in toxic assets, nor is it dependent on exotic derivatives.
Moreover, recent experiences have shown that people’s interest in Islamic banking goes beyond just Islamic investors. For example, the UK is considered the hub of Islamic banking, despite the fact that only 5% of its population is Muslim. As a result, governments and regulators in countries such as Nigeria have recognized the importance of Islamic banking as a viable alternative to traditional banking.