The Secretary-General of the Organisation of Islamic Cooperation Arbitration Centre (OIC-AC), Dr Umar A. Oseni, has said expanding Islamic finance is critical to reducing financial exclusion and unlocking economic growth in Northern Nigeria.
Speaking as the keynote speaker at the Arewa Islamic Finance Forum in Kano, Oseni said non-interest finance should no longer be viewed as a niche product for Muslims but as an essential tool for achieving Nigeria’s financial inclusion and economic development goals.
He noted that about 26 per cent of Nigerian adults remain excluded from the formal financial system, while financial exclusion in the North-West stands at 47 per cent, compared to just five per cent in the South-West.
According to him, many people in the region deliberately avoid conventional banking because of ethical and religious objections to interest-based financial products.
“In a country where 26 per cent of adults are locked out of the financial system and where the exclusion rate in the North-West stands at 47 per cent, non-interest finance is not a niche. It is the missing infrastructure of enduring economic policy and a growth strategy for this nation,” he said.
Oseni argued that Nigeria would struggle to achieve the Central Bank of Nigeria’s target of 95 per cent financial inclusion without addressing the high rate of exclusion in Northern Nigeria.
He said the challenge was not a lack of financial literacy or access to banking services but the absence of financial products that align with the beliefs and values of millions of people.
“You do not argue a man out of his faith to bring him into your bank. You build a bank he can walk into without leaving his faith,” he said.
The OIC Arbitration Centre chief described Islamic finance as part of Kano’s historical economic heritage rather than a foreign concept. He recalled that traders in the ancient commercial city relied on trust-based partnerships, profit-sharing arrangements and trade financing long before the emergence of modern banking.
He said reviving those principles through modern regulations and technology would strengthen commerce, expand investment and stimulate economic growth across the region.
Oseni lamented that many farmers and traders in Northern Nigeria continue to lose substantial income because they lack access to Shariah-compliant financing, forcing them to sell their produce immediately after harvest when prices are at their lowest.
He said instruments such as Mudarabah, Salam financing and warehouse receipt systems could enable producers to retain their commodities until market prices improve, thereby increasing their earnings.
He also expressed concern over the high level of financial exclusion among women, saying about 30 per cent of adult women remain outside the formal financial system despite their significant contributions to food processing, tailoring, textiles and petty trading.
According to him, Islamic finance offers flexible partnership structures that can better accommodate women entrepreneurs who often lack conventional collateral such as land titles.
Oseni further disclosed that the global Islamic finance industry is now estimated at about $6 trillion and urged Nigeria to position itself to attract a larger share of the expanding market through Sukuk and other non-interest financial instruments.
He challenged wealthy individuals and business leaders in Northern Nigeria to channel their resources into productive investments instead of leaving wealth idle in cash, real estate or inventories.
“The North is not capital poor; the North is capital idle. Those are two completely different conditions requiring different remedies,” he said.
He called on investors attending the forum to engage directly with entrepreneurs, provide equity financing and support professionally managed investment funds capable of transforming businesses into sustainable enterprises.
According to him, financing local entrepreneurs would create jobs, strengthen supply chains and drive economic growth across the region.
Oseni added that the regulatory frameworks for Islamic finance are already in place through the Central Bank of Nigeria and the Securities and Exchange Commission, stressing that what is now required is stronger commitment from investors and other stakeholders.
He urged participants to use the forum as a platform to build partnerships that would unlock Northern Nigeria’s economic potential through ethical and non-interest finance.
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