TAKAFUL (ISLAMIC INSURANCE) IN NIGERIA: HOPES, HURDLES AND HARMONIZATION
Abdul-Maliq, O. Yekeen1, Salaudeen, M. Yinka2.
1(Department of Banking and Finance, University of Abuja, Gwagwalada-Abuja)
2(Department of Accounting, University of Abuja, Gwagwalada-Abuja)
Abstract:
This paper investigates the prospects of successful operation of Islamic (Takaful) Insurance in Nigeria especially from the regulatory perspective. Having successfully experimented with Islamic banking, the Nigeria monetary authorities seem to have followed up with an adequate and in appropriate legal platform for Takaful operation. Adopting a prognostic analytical approach, the paper assembles analyses and synthesizes the factors that will enhance success of Takaful in Nigeria as well as those factors that may imitate against it. The paper observes that while Takaful has a bright Prospect in Nigeria, public acceptance will be a challenge except if Takaful companies can outperform or at least, perform as well as conventional Insurance companies. One way of doing this, the paper observes, will be by delivering estate and commercial property, especially the type that are more affordable than are presently available under conventional financing. The researchers opine that the success of Islamic insurance in Nigeria will not only help the spread of Takaful and other Islamic financial institutions in Africa and other emerging economies, it will also help reverse the insinuation that Islamic finance is petro-dollar driven. The paper postulates that a re-enactment in Nigeria of Dubai, Qatar and Bahrain property and other development miracles will be more enduring evidence of the success of Islamic finance in Nigeria than flashy profitability and return on investment or mere recourse to the philosophical palatability of lslamic injunctions which many are trying assiduously to abuse.
Keywords: Takaful, maumalat, halal, haram, Sukak, Jaiz.
Introduction
With the successful take-off of Islamic banking in Nigeria with its flag-ship bank (the Jair Bank Nigeria) in 2012, and following the work of (Jankara 2013); it appears that Nigeria has finally opened its doors to new window of financial resource flow that has been opening in the world for over fifty years now: On the bect of Jaiz bank in Nigeria is the emergence of Islamic Insurance (Takaful). According to the Institute of Islamic Banking & Insurance, 1181, (2007), Takaful is essentially a cooperative system for the reimbursement or compensation made to people or organizations who suffer losses out of a fund to which they all agreed to make small regular ‘donations’ and managed by an operator (the Takaful manager) in compliance with Islamic injunctions.