The Emir of Kano, Alhaji Muhammad Sanusi, said on Thursday that the introduction of Islamic finance into the nation’s economic system would positively impact the rate of its financial inclusion in Africa. He made the remarks at the Third International Conference on Islamic Banking and Finance in Kano.
“Financial Inclusion is one key component on inclusive development, which is necessarily for sustainable growth. “In this area, Nigeria and Sub-Saharan Africa are lagging behind several regions and continents with less than one adult in four having access to an account in a formal financial institutions in Africa. “Based on the survey conducted by the Enhancing Financial Innovation and Access (EFInA), 39. 5 per cent of adult Nigerians are financially excluded,” he said.
He, however, noted that many Muslims rejected the formal financial services because of non-compatibility of the services to the tenets of Islam. “This contributes to the overall rate of financial exclusion in the continent. “OIC countries with Islamic Banking services have higher level of financial inclusion than those that do not have those services,” he said. He said religious reasons were also responsible for the exclusion of 11.6 per cent in OIC countries, compared to 4 per cent in the rest of the world. “This shows that self-exclusion due to religious considerations are to some extent being mitigated by the introduction of Islamic financial services.” He said Islamic Banking presence and activity had been found to be associated with greater inclusion in terms of households and firms accessing of bank credit to finance investment. The monarch therefore stressed the need for the mobilisation of large scale financial resources to support the Sustenance Development Goals. “Under the UN developmental goal of promoting inclusive and Sustainable economic growth, the concept of risk sharing is a pillar of Islamic finance. “It is another illustration of the relevance of Islamic finance in achieving the Sustainable Development Goals. “The mobilisation of human and material resources and global collaboration are necessary for the realisation of sustainable development, “he added. He said Islamic finance, based on its principles of risk sharing, prudence and ethics and supported by a robust and resilient regulation system, could without doubt contribute towards the achievemens of Sustainable Development Goals.