Operation of the Islamic or non-interest banking model
in the country, which commenced early this year, appears to be in jeopardy as
the only Islamic banking institution in the country, Jaiz Bank Plc, has
continued to record poor patronage even in the North, which should ordinarily
be its strong hold.
Reports coming in from both Abuja and Kano, where the
bank has its branches, indicate that awareness of the bank’s operations and
patronage are both on the low side, a situation which industry watchers believe
can spell trouble for the premier Islamic banking institution and by extension,
the noninterest banking model.
For instance, in Kano, where there is a large presence
of Muslim faithful numbering about 8 million, forming a huge potential market
for the bank’s products, banking hall traffic in the only visible branch of
Jaiz Bank is very lean.
Sunday Mirror investigations
carried out on Friday, in the ancient city, which is the North’s economic nerve
center, suggested that the bank is yet to find its bearing in the bustling
city, although its structure located on Tafawa Balewa Road speaks of fine and
expensive taste. The edifice, which also accommodates two regular commercial
banks - Zenith Bank Plc and Fidelity Bank Plc - is still undergoing a facelift.
Visits to the building revealed that Jaiz Bank recorded
virtually insignificant traffic unlike its neigbouring commercial banks going
by the volume of traffic in their respective banking halls. It was actually
difficult to know that the bank’s section of the building was one that
interacts with members of the public on account of the very light traffic.
Industry watchers have expressed concern that with the
patronage required to make a profitable outing being seemingly low, the bank
may find it difficult to stay afloat. One concerned businessman, who spoke on
conditions of anonymity, expressed doubts over the future of the banking model.
Equally, Investigations by Sunday Mirror indicated that
awareness about the existence of the bank among small- and mediumscale trading
and commercial entrepreneurs in the Federal Capital Territory (FCT), Abuja,
remains low.
For instance, a trader in Lugbe, a satellite town in
the FCT, who simply identified herself as Mummy Keji, said she would have been
patronising the bank given the interest-free loan policy if she knew more about
its location.
“Some of us hear about the bank but we don’t know where
they are located in Abuja. For me, if I knew where they are or if they
establish branches near us, we can easily do business with them,” she said.
However, Head, Corporate Communications Department of
Jaiz Bank, Alhaji Idris Salihu, debunked the reports of poor patronage,
insisting that the level of patronage of customers had been “amazing and that
this shows clearly that Nigerians have come to see the immense value Islamic
banking is set to add to the financial system.”
He noted that as a regional bank, Jaiz Bank’s
performance had been impressive in terms of branch network, customer base and
other operational parameters.
He explained: “I must say with all sense of modesty
that the acceptance of Islamic banking, which our bank is pioneering in the
country, has been amazing. Customer patronage has been impressive since we started
in January.
“We are attending to the needs of customers
irrespective of their religious, ethnic or cultural backgrounds. We have been
doing this for all customers in the past eight months we have been operating.
He continued: “As at today, we have established
branches in Kano, Kaduna and Abuja. This branch network growth is good for our
business as a regional bank. We are planning to establish eight more branches
before the end of the year. All this shows clearly that Jaiz Bank is growing
and we give all the glory to God.”
Commenting on the development, spokesman for the
Central Bank of Nigeria (CBN), Ugo Okoroafor, said it was too early to conclude
that the Islamic banking model was not doing well. While speaking in a
telephone chat with our correspondent yesterday, Okoroafor said, “Let us wait
for the bank’s results then we can conclude whether they are doing well or not.
He maintained that the model had barely commenced,
insisting that there are several components in the Nigerian financial system that
need to be included in policy considerations. “For some people, that (Islamic
banking) is the kind of banking they desire and you have to include them in the
system for the purpose of financial inclusion.”
He argued that he saw no problem with the model, which
needed the necessary support of all stakeholders.