Islamic Finance Crucial for Reducing Financial Exclusion

Dr. Umar A.

Oseni, Secretary-General of the Organisation of Islamic Cooperation Arbitration Centre (OIC-AC), emphasized the importance of expanding Islamic finance to combat financial exclusion and stimulate economic growth in Northern Nigeria during the Arewa Islamic Finance Forum in Kano. He reported that 26% of Nigerian adults are excluded from the formal financial system, with the North-West region experiencing a staggering 47% exclusion rate compared to 5% in the South-West.

Oseni pointed out that many individuals avoid conventional banking due to ethical and religious objections to interest-based products. He argued that without addressing the high exclusion rates in Northern Nigeria, Nigeria would struggle to meet the Central Bank of Nigeria's target of 95% financial inclusion.

He noted that the absence of financial products aligned with the beliefs of millions is a significant barrier. Oseni also highlighted the historical roots of Islamic finance in Kano and proposed instruments like Mudarabah and Salam financing to improve income for farmers and traders.