BY BUKOLA IDOWU, Lagos
The small and medium enterprises in the private sector of the economy are set for a boost as SunTrust Bank alongside Jaiz Bank, Wema Bank and the Bank of Industry (BoI) have signed a $10 million financing memorandum of understanding (MOU) agreement with the Islamic Corporation for the Development of the Private Sector (ICD).
Speaking to journalists immediately after the MOU signing ceremony, at the third Africa Islamic Finance Forum in Lagos, the SunTrust Chief Executive Officer, Muhammad Jibrin, said that the deal has provided for the bank another line of funds to support the growth of small and medium size enterprises.
He explained that non-interest loans are more supportive to businesses as there are no pressures of accumulated interests.
The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institution and is part of the Islamic Development Bank (IDB) Group.
Jubrin also explained the importance of non- interest finance in growing the micro, small and medium enterprises in the country, as the bank signed a memorandum of understanding (MoU) with the Islamic Corporation for the Development of the Private Sector (ICD).
He noted that non – interest banking which is based on interest sharing ensures that the institution takes more interest in the business to ensure that the businesses succeeds. “Ordinarily in other lines of finance where you have interest, the interest continues to accrue and the terms and conditions and tenure along with other factors make it difficult for customers to meet their obligation as they fall due,” he pointed out.
Jubrin said Suntrust Bank as a regional commercial bank operating in the south -south and south-west region had “decided to have access to another line of finance that will help us in providing finance to people who do not need to take funding on interest basis.
“We have been in discussion with the ICD for the development of the private sector to ensure that we get additional line of finance to be able to support MSMEs and support individual businesses, particularly farmers who do not have access to finance ordinarily from commercial banks.”
In her welcome address, the minister of finance, Kemi Adeosun , who was represented by the director, internal economic relations, Aliyu Ahmed, noted that Nigeria and the wider African region with their extensive and expansive population and market were potential destinations for the development of Islamic financing.
She called on ICD to establish a long-term commitment towards the economic development of member countries.
“I want to assure you that Nigeria, in her quest for development, will judiciously explore every available opportunity to key into this agenda with the ultimate aim of achieving strong and sustainable economic development for the country. Opportunities abound in Nigeria. These opportunities are huge in the power sector, in road, railway, housing, water supply, education and health. This is complimented by government’s efforts at improving governance and the Ease of Doing Business, which is rapidly yielding results as evidenced in Nigeria’s recent 24-point-leap on the latest EODB list recently released by the World Bank.
“On this note, I implore participants to take a closer look at the new and attractive opportunities in Nigeria with a view to taking the investment advantages emanating therefrom,” she stated.
On his part, regional office director of the ICD, Okan Altasli, who represented the chief executive, Mohammed Anmari, said the ICD was expanding its “activities in this market quite aggressively and our line of finance is the most active team in this market.”
Stating that Islamic finance was about risk sharing, Altasli said it comes handy in times of economic crisis or downturns and increases the resilience of the financial sector.