Nigeria: Advocating Islamic micro-finance banking to reduce poverty

THE Principal, Association of Oasis Associates, Malam Ahmad Dogara has given nod to Islamic Micro financing in the Nigeria’s banking system, saying it could serve as a speedy remedy toward poverty eradication in the country.

Presenting a paper during Micro-Finance Investors Forum, organized by the Central Bank of Nigeria (CBN), held in Kano, Dogara believes that Islamic Micro-Finance could similarly be an excellent substitute for the conventional micro-finance currently being implemented in the country.

“In recent years, micro-finance has emerged as an important instrument to help a large number of unbreakable members of the society as a means of reducing poverty and encourage economic growth in neglected parts of the world”, the economist said.
Dogara, howeverm, lamented that inspite of its prior success, conventional micro-finance was found to be not fully reaching the poorest of the poor, while loans were going to activities unrelated to entrepreneurs.
“It was similarly discovered that over 1bn of the world population had lived under unacceptable condition of poverty and most of the people belonged to the developing nations, particularly the rural dwellers in Asia and the pacific Africa” he further explained.
“Still over the years, report had shown that over 30,000 people in the world die everyday because they were too poor to stay alive,” stressing that in some Muslim communities, conventional invest based microfinance has always been ejected, principally for its non compliance with the Islamic principles, particularly on the issue of interest” he said.

“While conventional microfinance institutions (MFIs) was always criticized for sharing exorbitant interest rates and fees, Islamic microfinance could arguably help current the short comings, since it focuses on achieving social justice, disallows exploitation and battles poverty as well,” he explained.

Another presenter, Hajiya Talatu S. Bashir while speaking on “the relevance of microfinance business in Nigeria: the need to establish microfinance banks” explained that even a cursory observer of the Nigerian economy could concede that poverty was assuming on alarming proportion in the country.

According to her over 75 per cent of Nigerians live below $1, which was equivalent to N178 per day expressing fear that this was more prevalent in northern Nigeria.