By Nse Anthony-Uko
ABUJA, (Sundiata Post) – Jaiz Bank Plc, the pioneer non-interest bank in the country, has appealed to the Federal Ministry of Finance to speed up the process of issuing of the Sovereign Sukuk in order to provide the financial infrastructure needed for the bank to effectively manage its liquidity.
Managing Director, Jaiz Bank, Mr Hassan Usman, who made this appeal during an interactive session with Finance Correspondents in Abuja, Wednesday, said the bank was still grappling with dearth of instruments with which to manage its liquidity.
Recall that the issuance of the Sovereign Sukuk, initially scheduled for third quarter of 2016 was later shifted to the first quarter of 2017.
Usman said, “The Minister of Finance made a promise that by the first quarter of this year we will have the first sovereign Sukuk. But the first quarter ended a few days ago. I am sure that it is still in the works. We still hope that this will happen any time very soon.
But it is a big challenge for a financial institution like ours. Imagine that you collect deposits; there is not instrument to invest them immediately. So this is a challenge that we still continue to have”.
The managing director commended the Central Bank of Nigeria (CBN) for the current intervention to ease demand pressure in the foreign exchange market, saying that 2016 was a very tough year for businesses including Jaiz Bank due to the severe scarcity of dollars which affected every business.
He hoped that with the current intervention of CBN, the country will never see the kind of scarcity experienced in 2016 again.
Giving a highlight of the bank’s performance since inception, Usman said that from a share capital of N5 billion in 2012 the bank has grown to over N15 billion currently. Also, “We had only three branches in 2012 and now we have 30 branches. We started with one customer but today we have more than 100,000 active customers. In our first year we had a deposit of about N3.5 billion today we have over N60 billion in deposits. Major indices of our balance sheet have been growing at average of about 30 per cent since 2012,” he said.
According to him, the product, non-interest banking has proved itself to be sustainable. The model is gaining acceptability.
He however emphasised that non-interest banking not a religious product but is open to all irrespective of their race or religious affiliations. According to him, “It is a mode of financing that tries to address human need by directly by providing goods and services on a part payment basis. It is providing financing to people who cannot afford to buy the goods and services directly. What we do is that we do not give them the money but provide the goods or services that they are looking for to meet their consumption or business needs. And this we have seen from our operations that all manner of persons do come and we do business with them.”
On outlook for 2017, the Jaiz Bank boss said, “We feel that 2017 would be much better than 2016. The activities we have so far recorded indicate that would be so. If some of the policies of the CBN are maintained, to make foreign exchange available, and if government spending especially in infrastructure is maintained, and if the power situation is gradually improved, and of course if the international price for crude is maintained at a minimum of $50/b or above, I think that 2017 would be better than 2016.”