By Scott Stearns from Lagos
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| Photo Credit: flickr |
How it works
Islamic law prohibits paying or receiving interest or investing in businesses that provide goods or services that are contrary to Islamic principles.
That has led to the creation of interest-free, Islamic banking in more than 50 nations where customers share in profits and losses. In an Islamic mortgage, for example, the bank buys the house then resells it at a higher price, allowing the new homeowner to pay in installments.
Ziyad Muhammad of the Islamic Finance Institute of South Africa says Islamic banking is about creating wealth for the community.
“The ultimate objective is to ensure that anything that is introduced by the entrepreneur is done for the benefit of the community at large,” he said.
Muhammad took part in a Central Bank of Nigeria conference meant to counter Christian opposition to the introduction of Islamic banking.
That has led to the creation of interest-free, Islamic banking in more than 50 nations where customers share in profits and losses. In an Islamic mortgage, for example, the bank buys the house then resells it at a higher price, allowing the new homeowner to pay in installments.
Ziyad Muhammad of the Islamic Finance Institute of South Africa says Islamic banking is about creating wealth for the community.
“The ultimate objective is to ensure that anything that is introduced by the entrepreneur is done for the benefit of the community at large,” he said.
Muhammad took part in a Central Bank of Nigeria conference meant to counter Christian opposition to the introduction of Islamic banking.
Christian criticism
The Christian Association of Nigeria says the move violates the country's secular constitution and comes at a dangerous time when security forces are battling Islamic fundamentalists who are fighting for an independent nation ruled by Islamic law.
At the St. Peter Claver Catholic church, Father Paul Anyansi recognizes the potential economic benefits of Islamic banking but believes its dangers are far greater.
“We have too many religious tensions in terms of Islam against Christians. So it could stir up more. This is not the time for it," he said. "The policies for Islamic banking are good in the sense where there is no loan and interest. It doesn't go against the beliefs of the Islams. But what we are trying to say is that this country is not mature for it now.”
Father Anyansi says Christian leaders understand that Islamic banking works in other countries and might eventually work in Nigeria, but not right now.
“It could be as effective as it is England, as it is in America, as it is in Malaysia or countries where it is operated. But for now, we are still growing. A lot of people are not accepting their brother as their brother. They are not accepting the differences between religions. It will create more problems than more gains,” he said.
At the St. Peter Claver Catholic church, Father Paul Anyansi recognizes the potential economic benefits of Islamic banking but believes its dangers are far greater.
“We have too many religious tensions in terms of Islam against Christians. So it could stir up more. This is not the time for it," he said. "The policies for Islamic banking are good in the sense where there is no loan and interest. It doesn't go against the beliefs of the Islams. But what we are trying to say is that this country is not mature for it now.”
Father Anyansi says Christian leaders understand that Islamic banking works in other countries and might eventually work in Nigeria, but not right now.
“It could be as effective as it is England, as it is in America, as it is in Malaysia or countries where it is operated. But for now, we are still growing. A lot of people are not accepting their brother as their brother. They are not accepting the differences between religions. It will create more problems than more gains,” he said.
Secular vs Islamic
Human rights activist Oke Adheke says Nigeria can not run on both a secular system and an Islamic system.
“The moment they gave it a religious coloration it is not good for this country. Islamic banking by the name is not good for this country. Let them give us banking products that they believe are good for the ordinary man. The problem with this country is that we introduce too many funny things and tell stories about them, yet they don't work,” said Adheke.
Banker Solomon Osiobe says people are afraid of Islamic banking because it is new, but he believes it can help the economy if everyone understands its rules.
“Let's give it a chance because it has its advantages and disadvantages. If the rules are set out to be followed by the people who are to be served and there is public alertment, this banking system can go on,” he said.
“The moment they gave it a religious coloration it is not good for this country. Islamic banking by the name is not good for this country. Let them give us banking products that they believe are good for the ordinary man. The problem with this country is that we introduce too many funny things and tell stories about them, yet they don't work,” said Adheke.
Banker Solomon Osiobe says people are afraid of Islamic banking because it is new, but he believes it can help the economy if everyone understands its rules.
“Let's give it a chance because it has its advantages and disadvantages. If the rules are set out to be followed by the people who are to be served and there is public alertment, this banking system can go on,” he said.
Alternative
In this time of religious tension, Jaiz International Bank's Mohammed Mustapha Bintube says, Nigeria needs an alternate method of financing based on fairness, equity, and transparency.
“Islamic banks also, deliberately, we don't finance anything that is harmful to society. So we only look for projects that make positive impact in people's lives,” he said.
Nigeria's Conference of Islamic Organizations says opposition to Islamic banking is ignorant and insincere as it says some political leaders are trying to link Islamic financing to terrorism at a time when London and Paris are competing to be the center of Islamic banking.
The Christian Association of Nigeria says it will challenge the introduction of Islamic banking in court.(VOA News)
“Islamic banks also, deliberately, we don't finance anything that is harmful to society. So we only look for projects that make positive impact in people's lives,” he said.
Nigeria's Conference of Islamic Organizations says opposition to Islamic banking is ignorant and insincere as it says some political leaders are trying to link Islamic financing to terrorism at a time when London and Paris are competing to be the center of Islamic banking.
The Christian Association of Nigeria says it will challenge the introduction of Islamic banking in court.(VOA News)
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