THE MOTIVATING FACTORS FOR THE VIABILITY OF ISLAMIC BANKING IN NIGERIA

By DR ADEBAYO, Rafiu Ibrahim

Abstract

As if the abandoned stone is now the cornerstone of the house, Islamic banking system has become a popular alternative to the conventional banking system and its viability is no more a myth as it has been accepted and its successes have been acknowledged globally. In Nigeria, efforts are being made to join the long list of the countries which encourage the operation of the Islamic banking system. The Central Bank of Nigeria has taken a step at adopting an aspect of Islamic banking system by providing a blueprint on interest-free banking system. This step allows some conventional banks to introduce some interest-free products in their banking operation. This however is not the true spirit of Islamic banking system which in addition to interest-free products, encourages high real sector investment, low consumer lending and as well establishes a system of justice in human society via Profit-Loss Sharing (PLS) transaction principle. The lateness in establishing an Islamic bank in Nigeria is however worrisome as the country has within its reach all it takes to have one. This paper is therefore out to expose some enabling factors for the success of Islamic banks in Nigeria. This, in our view, will assist the stakeholders in the struggle for the establishment of an Islamic bank to be optimistic of their endeavours, while the doubting thomases who see it as a white elephant project will have a change of mind on it.