Jaiz Bank plc. pioneered Islamic banking concept in Nigeria six years ago. In this interview with ABDULWAHAB ISA, the bank’s Managing Director/CEO Mallam Hassan Usman, said the lender is entering into consolidation, setting stage for value creation by supporting poverty eradication in Nigeria. Excerpt
What has been Jaiz Bank PLC’s experience so far having pioneered Islamic Bank in Nigeria six years ago?
We thank God. So far, we have been able to show that Islamic (non-interest) banking is possible in Nigeria. Before now, it was an issue whether we can do that kind of banking in Nigeria or not. The important thing is that it has become a reality. Secondly and very importantly, we have been able to provide the option that some people were yearning to have for a number of years. Those who felt, because of their background, it is better to go to banks that will not deal in interest, now have an option.
That is the fundamental reason why this bank was established. It was not because we just wanted to be another bank; it was because we wanted to provide options to people who believe interest is not morally justifiable in their upbringing and their religious background.
We commenced operations in 2012 with three branches in Abuja, Kaduna and Kano.
At the end of December 2017, the branches grew to 30 and three branches will added this January. With just a few customers when we commenced operations, we have grown the customer base to over 300,000. Our balance sheet has grown from between N5 and N6 billion in 2012 to between N80 and 90 billion by the end of December.
We could do much better if you ask me. Have we exhausted our potential? I will say we are just scratching the surface of what we want to do; we have a very large ambition. First, we checked on the model and we believe this model is workable. This is just the introduction and we are now entering into consolidation stage, the stage for real value in terms of providing real options to Nigerians.
Looking at the spread of branches, South-south and South-east zones of the country are yet to have Jaiz Bank’s branches. What are your plans for these zones?
Initially, we were licensed as a regional bank and naturally the number of branches that we had in the regions were limited to the Northwest, Northeast and Abuja. Yes, we don’t have many branches in the south, but we have started. As I speak, we have already established three branches that are functional in Lagos.
We have one branch in Ibadan and we have a branch in Port Harcourt. The reality is that you will see us in those other zones now that we now have the license to operate in all parts of Nigeria. More of our branches are going to be seen in the South-west and South-south as well as Southeast.
For 2018, we plan to have a number of branches; we are going to add some branches in Lagos, we will go to Ogun state, we will increase our presence in Oyo and so we will continue to show presence in these areas and I believe this is going to happen this year.
Can you give us an insight into your five-year strategic plans?
One of the bedrocks of our next five-year plan is to consolidate and make sure that we are in all the major commercial centres of Nigeria. Of course, we are going to use technology to ensure that we fill in the gaps in terms of delivery channels so that even if we are not able to meet all locations, which is practically not possible at this stage, our services will be available through alternative channels such as Internet banking, mobile banking, agency banking and off-site Automated Teller Machines (ATMs).
The plan is to spread our reach, grow the balance sheet and becoming very competitive and we intend to be a major player in the market.
Specifically, what is your focus for 2018?
This year, we want to grow both our reach and our products. Also, we will like to enhance our capability in terms of the alternative channels. These are the three basic objectives we intend to pursue this year.
What is your assessment of banking sector’s performance in 2017 and the way forward?
2017 was an upshot of 2016 and everybody knew that 2016 was a very difficult year. By 2017, we were emerging out of recession. It was supposed to be better than 2016, but it was still also a very difficult year. There were a lot of plus; we had the foreign exchange market becoming stabilised for most part of 2017, the power situation was improving be
cause the power is very critical to what we are doing, but government spending was not as envisaged and so, the level of growth was affected. Also, coming out of recession was still quite slow; it wasn’t significant to erase the difficulties that we went through in 2016. We hope that 2018 will be much better. The crude oil market is looking better, more stable and the expectations in terms of the running and value of our export will be better than 2017. These are expectations. We envisage 2018 will continue the stability in the foreign exchange and money markets and, most likely, we will see more stability in interest rate.
The Federal Government recently experimented with the Sukuk and it was over-subscribed by investors dwarfing initial criticisms that greeted its introduction. What are the lessons from the Sukuk experience?
I think the general awareness is getting better; people are beginning to realise that Islamic banking or non-interest banking is not about rituals, it is not just about religion; it is an alternative and so we commend government, especially the Debt Management Office (DMO) and the Ministry of Finance for keeping to their promise to issue it in 2017.
It came later than expected because it was supposed to have come in the first quarter, it came towards the end of the year, but it is better late than never.
We believe it is an opening; another source of funding that can be explored by government and corporate institutions desiring to raise finance for long-term development and long term investment. Sukuk, in particular, is ideal for public finance, it provides a low disciplinary approach because funding raised through Sukuk can’t be diverted; it has to go straight to the projects.
There is high expectation for the projects being completed and on time because the owners of these resources like to be remunerated and it is only when the projects are up and doing that they can receive this remuneration. The structuring of Sukuk ensures a private sector oversight over the funds. It is not like what government does with ordinary bonds or treasury bills. Of course, government still decides what to do with the money, but there is an oversight to ensure that the projects for which these funds were raised in the first place are implemented.
What is your projection for Jaiz Bank in the next 25 years?
Twenty – five years is a long period. Even before then I will like to see Jaiz as one of the very significant financial institutions in Nigeria. I will like to see Jaiz actually supporting the poverty alleviation and poverty eradication in Nigeria through intervention at the lower level. If we achieve that, it will be a significant milestone and also it will be in keeping with the intentions and aspirations of the founders of the bank.
Nigeria’s fish deficit hits 2.2m tons
Despite smuggling and abuse of import quota restrictions, Nigeria is currently facing 2.1 million tons of fish deficit.
The Director of Federal Department of Fishery (FDF), Muazu Mohammed, said this in a chat with New Telegraph in Lagos.
He said that the country still depends on one million tons of fish annually as against the 3.2 million tons demand.
Statistically, the country’s total demand is estimated at 3.2 million tons, while it depends on 1.12 million tons of domestic production from aquaculture, artisanal and industrial fisheries.
The FDF boss added that 80 per cent of fish produced in the country are catfish, while other species account for only 20 per cent.
This newspaper gathered that the restrictions have not yielded any positive result because of abuse of quotas and large scale smuggling.
Fish farmers who spoke with this newspaper noted that some of the local farmers government was trying to protect were already out of the business due to lack of fund and other challenges.
Speaking on the development, President, Fish Processors Association of Nigeria (FPAS), Chief Wole Omole, blamed the deficit on government’s policies, which had created uncertainty in the fishery industry.
He said that some members of the association had been facing challenges of finance, debts and smuggling in the business because government had not done enough to protect their investments.
Already, Omole noted that many of the local fish farmers had closed down their fish farms since they have run into debts.
He said: “Let me say this to you, government is just paying leap service to farmers operating in the industry. Money does not get to real farmers who are willing to expand their fish ponds. Also, fish feeding is very expensive in the country. As I talk to you now, I have diverted from fishing business because the profit is not there and this has to do with the cost of feeding the fish.”
Omole explained that investors were finding it difficult to break even in the business even in the long run.
The FPAS president added that lack of political will by the Federal Government had stifled the growth and development of fishery in the country.
“Look at the importation of frozen chicken and turkey the Federal Government banned, but you still found them in the marketplace,” he noted.
According to him, importation of foreign fish, lack of capital, strong smuggling network and inadequate feeds had crippled the ambition of local farmers to meet national demand. This is why the country is facing such a huge deficit, he said.
Omole blamed government for allowing influx of fish imports into the country despite its import restriction quotas.
Echoing him, the President of Fishery Association of Nigeria (FAN), Rasaq Adefowoju, decried the high rate of smuggling and importation of fish to the country.
He said that without government assistance to local fish farmers, the current fish deficit would continue to widen.
Adefowoju also stressed the need for government to create an enabling environment for local fish farmers operating in the country.
The president added that only the solution was for government to provide a bailout fund or loan for the farmers from the Central Bank of Nigeria (CBN) to enable them embark on massive production at single digit or at six months moratorium.
Adefowoju said: “The problem with us in the association is finance. We have enough local fish farmers in the country that can produce fish but there is no financial assistance from the government.”
It would be recalled that since 2014, when the Federal Government introduced the import restriction, exporters from Norway have been finding it difficult to bring fish into the country due to lack of foreign into the country due to lack of foreign exchange to order for supply.
However, finding revealed that some fish are being smuggled through the neighbouring Cotonou Port to the country by fish merchants.
Last year, the Federal Government complained that about $700 million was spent on importation of fish into the country.
The Minister of Agriculture and Rural Development, Audu Ogbeh, lamented that it was no longer sustainable for government to continue to spend such huge amount of money on fish importation.
Consequently, he said that funds would be made available for research institutes to scale up research work into the local production of other fish species, aside the regular catfish and Tilapia.
The minister said: “We need to start looking inwards to see how Nigeria can produce some of these fishes both for local consumption and then importation. We will also encourage massive investment in artisanal fish production, to meet the protein needs of Nigerians, because it has been discovered that lack of protein in some women have made them to developed fibroid
Dangote: Businesses, residents lose N86bn daily to Apapa gridlock
Businesses and residents are losing N86 billion to Apapa-Wharf road gridlock daily, Africa’s richest man and President/CEO, Dangote Group, Alhaji Aliko Dangote, has said.
He stated this in Lagos while condemning the challenges posed by traffic jam and heavy presence of different types of taskforce, including the Customs, on the major route leading to the nation’s largest port.
Dangote, who was on an inspection tour of the on-going reconstruction of N4.3 billion Apapa-Wharf road by AG Dangote recently, stated that businesses and residents are losing 20 times the project’s cost daily.
By calculation, N86 billion is being lost by business owners and residents on daily basis.
He said: “People don’t really understand how much money businesses are losing because of the gridlock here; if you quantify it in billions, it is 20 times the cost of this project every single day.”
Consequently, he urged the Federal Government to move the taskforce, including Customs, away from the route to ease traffic.
The reconstruction of the road that leads to Apapa and Tin Can Island Ports is being undertaken by Dangote Group, Nigerian Flour Mill Limited and the Nigeria Port Authority (NPA), which are together committing N4.34 billion to the project.
Justifying the involvement of his company in sponsoring the project, Managing Director, Flour Mills Limited, Paul Gbadedo, lamented that it has been difficult for businesses and residents of Apapa.
Noting that the economy of Apapa is very huge, he said that businesses cannot see the traffic and road deteriorating without doing something.
He stated that 75 to 80 per cent of imports passed through the Apapa ports, noting that the road is strategic.
Dangote stressed that it did not make any commercial sense for Customs to mount check points outside the wharf after they might have checked and certified goods at the ports.
“If there should be any more checkpoints, they should be at the toll gates, not here where they are obstructing traffic flow,” he said.
Africa’s richest man said he was impressed with the progress and quality of work being done by AG Dangote, the contractor handling the reconstruction of the road.
He also lauded the palliative work going on on Apapa Oshodi Expressway and the Trailer Park being constructed by government off the expressway, pointing out that these were efforts being made to ensure that the access roads to the ports are decongested.
“My impression of this road has changed because AG Dangote is doing a great and excellent work here. You can see the quality of work being done. This is quite impressive. Even in Germany, you cannot see this kind of quality of road. This road can last at least two generations in which case you will be talking about over 60 years. It is so solid that it can take any weight and any traffic,” Dangote said.
“I can assure you that we will double our efforts to complete the project on schedule, that is, latest by the end of June,” he said.
Chief Executive, AG Dangote, Ajif Juma, stated that the company is facing a lot of challenges, citing traffic and gas pipeline as major ones.
“But now we are working hard to ensure we finish on schedule with some of our workers on night shift,” he said.
CBN to banks: Settle customers’ complaints within 2 weeks
Deposit Money Banks ( DMBs) and other financial Institutions have been directed by the Central Bank of Nigeria (CBN) to settle customers’ complaints on issues of overcharge, unauthorised deductions and other matters within two weeks.
CBN Head of Complaints management Division, Mr Tajudeen Ahmed, conveyed the Apex Bank’s directive in Abuja. He said the regulator would ensure that bank customers receive redress on issues of excess charges or unauthorised withdrawal.
Ahmed reiterated the CBN’s commitment to eradicating the culture of excess and arbitrary charges. According to him, the CBN has since issued a circular,which could be found on the its website showing all legitimate bank charges. He explained that any charge outside what is contained in the circular was not allowed and should not be charged.
“The Consumer Protection Department issued guidelines to banks dated August 16, 2011, directing all banks and other financial institutions to resolve all customer complaints within two weeks of receipt of that complaint,” he said. “Before the expiration of that complaint, the financial institution is expected to be engaging the customer on a continuous basis to update him or her on the status of the complaint. “If it is not resolved within the deadline given, then such a person is encouraged to draw the attention of Central Bank of Nigeria to find solution to that complaint.”
Ahmed enjoined customers with unresolved complaints to contact the CBN by writing to the Director Consumer Protection Department. He also advised disgruntled bank customers to visit any branch of the CBN closest to them to lay their complaints.
“The CBN continually engages the banks to find out if their conducts and practices are fair to their customers in order to stimulate people’s confidence in the banking system. “Non-adherence to that normally results to regulatory sanctions as the case may be,” he said.
Ahmed faulted banks for setting a limit on ATM withdrawals to get customers to make several withdrawals to cash large sums. “I have also observed and noted this. Don’t forget that at the beginning, it wasn’t like this. Over time, we started having this problem.
“One of the reasons is that the quantum of N500 denomination is much more than that of N1,000 denomination,” he said. “When we approached the banks about these problems, they said that the machines become easily faulty when it is set to dispense up to N30, 000 to N40, 000 units.
“However, CBN has directed that the machines that allow payment of up to N30,000 to N50,000 should be installed. “This is still ongoing. The Banking and Payment Department of the CBN is championing it.” In her remarks, Head, Consumer Protection Department, Mrs Hadija Kasim, admonished bank customers to imbibe cashless policy.
“Let’s not forget that ATM cards can also be used on Point of Sale (POS) terminals. We are encouraging people that unless it is absolutely necessary, they should reduce the carriage of cash. Cashless transactions are more convenient, safer and you will avoid the problem of overcharges,” she said. She advised bank consumers to use bank transfer channels for transactions in cases where sellers do not have POS.
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