WorldStage– The Central Bank of Nigeria has licensed the Bank of Industry (BoI) to start operating the Non Interest Banking (NIB) window to drive financial inclusion, ethical financing, and higher participation in real economy.
The NIB is a form of Islamic banking (now ethical financing) that protects borrowers from the burden of interest (riba) payment. The lender only shares risks and profits with the borrowers on the assets or projects for which they seek financing.
“The approval underscores the CBN’s confidence in the bank’s commitment to responsible financing,” the bank said in a statement.
The license will allow the BoI to scale its operations, introduce innovative financing products, and deepen support for Micro, Small and Medium Enterprises (MSMEs) and other underserved segment critical to Nigeria’s sustainable economic growth.
Faith-based banks like Jaiz Bank, TAJBank, and LOTUS Bank dominate the N1.6-trillion market, about 1.7 percent of Nigeria’s banking sector in Nigeria.
But also gaining ground are conventional bank windows like the FCMB NIB for women entrepreneurs, Sterling Bank’s Alternative Finance, Stanbic IBTC’s Non-Interest Window, and Sun Trust Bank’s.
BoI’s Managing Director, Olasupo Olusi noted the license becomes a milestone in the banks journey of transforming Nigeria’s industry
“With this license, we can reach a new category of borrowers who before now could not be served,” he said.
The bank’s social and developmental objectives will find expression here by having its own list of NIB-fundable products and projects.
It then directly finances their raw material and other assets for eligible customers.
