This is how Islamic Finance is gaining traction and changing attitudes in Nigeria

Islamic finance instruments are gaining ground in Nigeria, with the Debt Management Office (DMO) of Nigeria listing a second N100 billion Sukuk bond this year. The sector has seen significant progress in recent years, evolving from a virtually non-existent presence to now having two full-fledged Islamic finance banks, an Islamic finance window by Sterling Bank, five funds, and four institutions providing Takaful services. The narrative around Islamic finance in Nigeria is shifting, with both Muslims and Christians beginning to invest in Islamic financial products, emphasizing that Islamic finance is not exclusive to Muslims. This shift is highlighted by institutions like the Church of Scotland exploring partnership opportunities for Islamic financial instruments. Adeola Sunmola, Partner at Udo Udoma & Belo Osagie, and Ummahani Amin, Managing Partner at Metropolitan Law Firm, discuss the growth and challenges of Islamic finance in Nigeria. One key development has been the focus on using Islamic finance for infrastructure development, with funds from Sukuk issuances being utilized for projects like school construction and road infrastructure across Nigeria's geopolitical zones. These projects have emphasized the accountability and transparency of Islamic finance-based transactions. To further mainstream Islamic finance in the country, efforts are being made to increase awareness and inclusivity. The Nigerian government has taken steps to align regulations with Islamic finance principles, enabling pension funds to invest in non-interest products. Initiatives like seminars and conferences are also contributing to raising awareness and promoting the adoption of Islamic finance in Nigeria. One significant aspect of promoting Islamic finance is its potential to drive financial inclusion by engaging populations, especially in the northern region of Nigeria, where traditional banking practices may conflict with Sharia law. However, challenges such as lack of information dissemination and commitment are hindering the progress of Islamic finance in Nigeria. Addressing these challenges will be crucial to unlocking the full potential of Islamic finance and driving economic growth and financial inclusion in the country.