Prospects of Islamic Banking in Nigeria: An Overview of Islamic Financial Theories of Al-Hayat Relief Foundation to Grassroots Economic Development.

Abstract

This paper attempts to have a brief look at the concept of Islamic Banking and little efforts that have been made to float Islamic banks and other Islamic financial institutions in Nigeria. The Nigerian Central Bank of Nigeria however has a standing policy prior to this time that non-interest banking or financial institutions could emerge but not to carry any religious connotations. (BOFIA) This has made it difficult for individuals and corporate bodies to float full fledge Islamic compliant banks or financial institutions in the country. A few who attempted it have gone into oblivion today, e.g. Habib Bank and Nigeria Arab Bank. Consequently, what the existing banks do is to open Islamic window as one of their products to cater for the teaming Muslim populace who are reluctant to patronize these banks because of their Islamic belief. This development has led some concerned Muslim individuals and groups to attempt to champion the course of Islamic financial theories in this regards operating under different names to avoid being subjected to government policies which may not be in line with Shariah principles. A few of these groups are Al-Hayat Relief Foundation, Ijebu-ode, Assalam Foundation, Al-Ansar, etc. This paper therefore intends to evaluate the contributions of Al-Hayat Relief Foundation to grassroots economic development with a bid to x-raying the areas of strengths and weaknesses in Islamic financial theories, more so that the foundation is at the verge of establishing an Islamic Micro finance Bank.