ISLAMIC BANKING IN NIGERIA: OPPORTUNITIES, CHALLENGES AND ACCEPTABILITY

Yekeen O. Abdul-Maliq

Department of Banking and Finance, University of Abuja.

GSM: 08037770262

Email: [email protected]

Abstract

This paper examines the opportunities, challenges and possible level of acceptability of the introduction of Islamic banking into Nigeria against the background that although Islamic banking has been allowed in Nigeria since 1991, and that a pioneer Islamic bank raised equity find from the Nigerian capital market in 2006, Nigeria is yet to have an operating Islamic bank. The research which uses the opinion survey method reveals that not only are Nigerians aware of the concepts, principles and tenets of Islamic banking, many including non Muslims, are very receptive to it and eager to see one take off. The research, however, reveals well seated reservations and pessimism not only from non-Muslims but also from Muslims. The research reveals that the most important challenge Islamic banking will face in Nigeria is people’s perception about the average Nigerian Muslim, especially at leadership levels, as to how well or otherwise they have conducted themselves, politically, socially and most importantly financially. Otherwise, the research reveals that Nigeria has the potentials position and good-will (internal and external) to operate Islamic banking (and in fact Islamic finance) to the overall benefit of Nigerians (Muslims and non-Muslims) and mankind as a whole. The researcher therefore recommends that (a) regulator and would-be operators should engage in public awareness creation (b) prospective shareholders and depositors should be made to understand that not only is Islamic banking not for only Moslems but also that all and sundry stand to benefit from it and (c) that a gradual in-rooding tactics should be adopted rather than the regulators forcing m Islamic bank on the people.

Key words: Haram, Islamic Banking, Ribs, Shun’s, Semantication.

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