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Historic Milestone: First Islamic Microfinance Bank Emerges In South West Nigeria

...Unveiling Of Hayat Trust Non-Interest Microfinance Bank Marks A Decade Of Financial Integrity

 

Daud Olatunji

In a groundbreaking development for the South West region of Nigeria, the inaugural Islamic microfinance bank, Hayat Trust Non-Interest Microfinance Bank, was officially launched on Wednesday, in Ijebu-Ode, Ogun State. 

Owned by the Al Hayat Relief Foundation, boasting of a robust membership of over 20,000, the institution stands as a beacon of financial inclusion and integrity.

Dr. Asif Olatunbosun Azeez, the President of the foundation,  highlighted the remarkable achievements of the bank during its transformative journey to becoming a tier 2 full-fledged Islamic Microfinance Bank.

With a decade of operation under its belt, the institution has admirably adhered to all regulatory guidelines, solidifying its reputation for financial integrity.

Speaking at the launch event, Dr. Azeez emphasized the pivotal role played by Hayat Trust Non-Interest Microfinance Bank in fostering economic empowerment within the community. 

The bank’s commitment to Islamic principles sets it apart, offering an alternative financial model that aligns with ethical standards.

The unveiling ceremony was attended by key figures in the financial sector, local dignitaries, and community leaders who commended the establishment for pioneering a financial institution that caters to diverse economic needs while upholding Islamic values.

During the ceremony, Dr. Asif revealed that Al-Hayat Microfinance Bank Ltd, operational from 2013 to 2023, remarkably remained free of any sanctions from regulatory bodies.

Dr. Asif shared the institution’s journey, highlighting its asset growth from N81.4 million to an impressive N507.7 million.

 Emphasizing commitment to interest-free micro loans and various Islamic financial products, he reported the successful disbursement of N3.9 billion to 17,085 customers, fostering a substantial customer base of 34,066 individuals.

Reflecting on the bank’s humble beginnings 27  years ago, Dr. Asif acknowledged the dedication of the six visionary founders who aimed to enhance the economic lives of Muslims rejecting interest on loans. 

He expressed gratitude for the positive feedback received from members benefiting from the Islamic microfinancing system, incorporating zakat, sadaqah, waqf, Hajj operations, and medical services.

A significant milestone in the bank’s evolution was highlighted by Dr. Asif, as Al-Hayat Microfinance Bank transitioned from a conventional license to a fully-fledged Non-Interest Microfinance Bank. 

The rigorous two-year process culminated in acquiring the Final License on February 20, 2024, following the Approval In-Principle granted on November 9, 2022.

Over the past decade, Al-Hayat Microfinance Bank achieved noteworthy milestones, maintaining a flawless record with no sanctions or fines, growing its customer base to 34,066, disbursing N3.9 billion to 17,085 customers, and witnessing a substantial increase in total assets from N81.4 million to N507.7 million. 

Shareholders’ funds also experienced a commendable rise from N30 million to an impressive N74.4 million.

 Dr. Asif  extended warm welcomes to all attendees, expressing gratitude to Almighty Allah for guiding the institution to achieve the esteemed status of a full-fledged Tier 2 Non-Interest Microfinance Bank. 

PLATFORM TIMES reports that the celebration not only marked a decade of growth but also testified to the resilience and commitment of Al-Hayat Microfinance Bank to Islamic banking principles.

He said “On Islamic Banking, exactly ten years ago, we established Al-Hayat Microfinance Bank Ltd. with N30 million share capital. Although it was an Islamized bank with a conventional license.

 “The conventional license was obtained when all attempts to secure a full-fledged Non-Interest Microfinance Bank license proved unsuccessful.

“I then told my people that with our focus and faith in Allah, we would be able to obtain a Shariah-Compliant Microfinance Bank license from the Central Bank of Nigeria (CBN). 

“Although the road was rough and uneasy, the processing took more than two years before we could transition from un-Islamic to Islamic Banking.

“Alhamdulillah, we received our Approval In-Principle (AIP) on the 9th of November, 2022, and the Final License on the 20th of February, 2024.

“Al-Hayat Microfinance Bank Ltd. recorded remarkable achievements and positively impacted the local economy within the last ten years of its existence (2013 to 2023). Some of the achievements are:

  1. “No sanction or fine from regulatory bodies from inception till date.
  2. “Customer base grew to 34,066.
  3. “Disbursement of N3.9 billion to 17,085 customers.
  4. “Grew the total assets of the bank from N81.4 million to N507.7 million.
  5. “Increased shareholders’ funds from N30 million to N74.4 million.”

How  Discouragement Turned Triumph For Al Hayat Relief Foundation

In a surprising revelation during his opening remarks, HRM Oba (Engr) Mufutau Adesanya Kasali, the Iboriaran 1, Moyegeso of Itele-Ijebu, publicly confessed that he initially discouraged the visionaries behind the Al Hayat Relief Foundation.

The Oba recalled advising against the idea 27 years ago when Dr. Asif, late Adepoju, and Prof. Salako consulted him.

Hinging his skepticism on the past failure of the late Secretary-General of Nigeria Supreme Council for Islamic Affairs, Alhaj Abdul Lateef Adegbite, to establish an Islamic bank before his demise, Oba Adesanya expressed his doubts about the feasibility of the initiative.

 He shared, “I remember 27 years ago, the president, Dr. Asif, and late Adepoju approached me with this idea. May Allah forgive Adepoju.

“ I told them the idea cannot succeed, considering the challenges faced by late Abdul Lateef Adegbite in establishing an Islamic bank.

“ I thought a small fraternity attempting what Adegbite couldn’t achieve was unlikely. 

However, Alhamdulillah, today, Al Hayat has succeeded, surpassing what Late Lateef Adegbite could not accomplish. I am happy for this success.”

Acknowledging the key to Al Hayat’s success, Oba Adesanya highlighted its inclusive approach, ensuring that no district in Ijebu lacks an Al Hayat branch. 

He expressed his delight when Al Hayat officials informed him of their success, commending Dr. Asif for contributing to the development of Ijebu through the Al Hayat initiative, alongside his late friend.

Speaking on the topic “The Roles of Islamic Microfinance Bank in Society,” the guest lecturer, Prof. Tajudeen Yusuf from the University of Lagos, stated that an Islamic bank is mandated to preserve five things: the soul, Deen, wisdom, human beings (sustenance of human beings), and money and property.

However, he urged Nigerians to sustain society and avoid polluting it. 

According to him, two questions would be asked about our properties: how did you acquire your wealth, and how did you spend it? 

He emphasized that it is not enough to acquire property through good means but squander it.

Prof. Yusuf denounced the belief that stealing people’s money and then going to Hajj could bribe Allah, considering it a waste of time. 

He warned Muslims against consuming Haram, stating that anyone who eats Haram would not have their prayers accepted by Allah. 

He advised that if those who acquire wealth illegally could be patient, they would still be wealthy as designed by Allah.

He highlighted Allah’s rules against Muslims engaging in Haram practices, including taking or giving interest, which he described as oppression. 

Quoting a Quran verse, he reminded Muslims to fear Allah and shun interest, emphasizing that many have become poor due to interest, losing their properties.

Prof. Yusuf mentioned that the World Bank patronizes the Islamic banking system and noted the active participation of developed countries such as Britain, Japan, and the US.

 He assured the gathering that more would join the Islamic banking system in the future.

He revealed that a prominent church provided a friend with N1m to research how to set up a bank like an Islamic bank. Prof. Yusuf listed unique selling points of Islamic banking, including financial inclusion, lamenting that less than 10% of people in Nigeria are included in finance, hindering the country’s development.

The professor explained the role of Islamic microfinance banks in poverty alleviation, emphasizing their inclusivity for all human beings.

 He mentioned that many pastors are shareholders in non-interest banking systems and outlined the role of Islamic microfinance banks in social welfare and risk-sharing for economic growth and stability.

Speaking on trust as a role of Islamic microfinance banks, Prof. Yusuf emphasized the importance of trust in life and stated that the banks are ready to lift people.

 He warned against treating Al Hayat Fund like the federal government’s Anchor Borrowers Fund and encouraged those with abandoned properties to hand them over to Al Hayat Trust Non-Interest Microfinance Bank Ltd for proper monitoring and better usage.

Goodwill messages were delivered by invited guests, including Noor Takaful, Al Barka Microfinance Bank, Lagos, and Leadfort Insurance Brokers Ltd.

Sharing his goodwill message, MD/CEO of Noor Takaful Insurance Ltd, Lagos, Rilwan Sunmonu, lauded the level of success recorded by the bank. He expressed confidence in Al Hayat’s high level of success and pledged complete support.

Former MD of Al Barka Microfinance Bank, Lagos, Alhaji Sekoni, giving his goodwill message, recalled that he had known Al Hayat 10 years ago and gave the foundation a pass mark. He called for the establishment of more Islamic microfinance banks to be active in the money market.

According to him, out of the four components of the Islamic banking system, Al Hayat has fulfilled three, including the creation of Islamic banking, operating Social financing, and Takaful, which is a self-administered scheme. The remaining one is to be in the capital market.

 He urged the public to propagate belief and participate in Hayat Trust Non-Interest Microfinance Bank.

In his remarks, MD of Leadfort Insurance Brokers Ltd, Alhaj Yakub Kabir, represented by Head of Operations, Yusuf Adebanjo, pleaded for a branch of Al Hayat Relief Foundation to be opened in Edo state. 

He highlighted the difference, stating that in conventional insurance, when customers do not have a loss, nothing is given back, but Takaful Instance will give something more at the end of the year if no loss is recorded.

Chairman of the Board of Directors, Prof. Taofiki Salako, mentioned that many people were consulted in 1997 during the conceptualization stage, recalling that they said it was not possible. 

He stated, “But we believe it is possible because Allah said it in the Quran. Al Hayat is number one in non-interest banking in the South-west.”

The Chairman of Ijebu-Ode local government,Alhaji Emiola Babatunde Gazal unveiled the plagues for the commissioning of the Hayat Traut Non-Interest Microfinance Bank Ltd.

Gazal did the commissions alongside other dignitaries while they were led into the premises by the president .

 

… How Al Hayat Relief Foundation  Rescued Hayat Trust Non-Interest Microfinance Bank  -MD/CEO

In an exclusive interview with the MD/CEO of Hayat Trust Non-Interest Microfinance Bank, Raheem Abiodun revealed the strategic move the institution made two years ago to acquire additional land for expansion.

Abiodun explained that faced with challenges in securing financing through traditional banks due to stringent conditions, the management explored alternative avenues. 

Ultimately, they turned to Al Hayat and initiated an Islamic business contract known as Hijarah.

“We bought this land, equivalent to more than a plot, at a considerable cost of several million Naira. It was a crucial step in our plan to upgrade the bank,” said Raheem Abiodun.

Highlighting the bank’s commitment to Islamic finance principles, he emphasized the significance of the Hijarah contract in facilitating the expansion project.

 The MD/CEO expressed gratitude for the flexibility provided by Al Hayat, enabling Hayat Trust Non-Interest Microfinance Bank to overcome financial hurdles.

The newly acquired land will be utilized to enhance the bank’s infrastructure, accommodating the growth in operations.

 Currently boasting five management staff, a fully-equipped banking hall, a mosque, toilet facilities, and a store, the expansion aims to further elevate the services offered by the microfinance institution.

This strategic move aligns with Hayat Trust Non-Interest Microfinance Bank’s dedication to providing Sharia-compliant financial solutions. 

The successful execution of the Hijarah contract reflects the bank’s commitment to innovation in the realm of non-interest banking.

As the first Islamic microfinance bank in the region, Hayat Trust Non-Interest Microfinance Bank is poised to make a lasting impact on the socio-economic landscape of South West Nigeria. 

With its unwavering dedication to financial integrity and adherence to regulations, the bank sets a precedent for ethical and inclusive financial practices in the microfinance sector

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