Jaiz Bank MD: FG raised N350bn from Sukuk in three years

Hassan Usman, managing director and chief executive officer of Jaiz Bank Plc, says the federal government raised N350 billion from Islamic financing instrument, particularly Sukuk, in the last three years.

Usman spoke when he appeared on Arise TV over the weekend.

A sukuk is an Islamic financial certificate, similar to a bond in Western finance, that complies with Islamic religious law commonly known as Sharia.

He said the fund was used to implement road projects across the country.

The Jaiz Bank MD also said that the bank, since it was established, has contributed in expanding credit to the real sector of the economy.

He added that the bank has engaged in financing Small and Medium Enterprises (SMEs), working with women, vulnerable groups and those at the bottom of the pyramid to deepen financial inclusion.

“Islamic financing by its nature is transaction based or you call it asset based. The federal government has recently started using some of these instrument like Sukuk which it has used to raise over N350 billion in the last three years to develop specific roads around the country,” he said.

“This mode of financing for public expenditure means you cannot divert the resources, you cannot use the monies raised except for that which you have intended. So it gives credence to the utilisation and also ensure that this resources are earmarked for specific developmental projects.

“Now if you look the other side where you are looking at the SMEs, Islamic finance tends to be more risk bearing and sharing with the SMEs and so encouraging this type of financing or banking means that the SMEs sector can grow with the support of this type of financing which shares risks and reward of whatever business is done.”

Usman noted that the bank has recorded over 50 percent growth annually, while its organisation size has expanded by more than 30 percent in the last four years.

He added that the bank grew its balance sheet by about 40 percent in 2020 while its risk assets/financing also increased by 54 percent while customer deposits also grew by about 40 percent.

“We’ve also tried to consolidate and expand to cover many areas of the commercial centers in Nigeria in addition to the fact that with the introduction of the Sukuk, our treasury function has improved because if you know that for more than six years of our life as a bank, we didn’t have instruments to invest our surplus liquidity into until the Sukuk came in 2017,” he added.