Islamic banking: What we’re not considering

But there is something we are not thinking about anyway. I must confess at this point that I have very little knowledge of how banks operate, but still continue to struggle with this fundamental question: Are we really ready or matured to practice Islamic banking in this country? From my little understanding of Islamic society, […]

But there is something we are not thinking about anyway. I must confess at this point that I have very little knowledge of how banks operate, but still continue to struggle with this fundamental question: Are we really ready or matured to practice Islamic banking in this country? From my little understanding of Islamic society, I know it is a society whose members live based on faith and trust, and I know that it is only with this assumption that this banking system would operate.

The contemporary modern bank lends money and charge interest on it. The borrower is expected to return the money after a specified period of time, with accompanying interest. In most cases, a collateral security would also be required. This bank is not interested in whether profit or loss is incurred in the course of this business. The bank always has a pre-determined profit, which is huge, and the borrower takes very little of the profit but bears the whole loss alone, as the case may be. This approach works perfectly well for a corrupt, dishonest and dangerous people like Nigerians. It is simply a checkpoint for fraudsters without an iota of faith in them.

Now, compare this with Islamic system where lending and borrowing is totally based on faith. A borrower is expected to declare whether there is any profit or loss, and any of the result would be shared based on the pre-determined agreement. Are we really convinced that Nigerians can hold on to this high level of moral standing? Let’s also remember that Islamic Sharia is meant for people that see above the standard of human laws and, therefore, look onto divine guidance. In this country, we consistently fall short of our corrupt laws, talk more of divine laws. The success of Islamic banking in other countries must not necessarily mean that this success can be replicated here. Almost all those countries are far advanced in almost everything because of their attitudes, but we are not advanced in anything, because of our attitudes. While I patiently wait for interest-free economy, I will not rush for it now, and I urge my brethren to take a cue from this.

However, I encourage anybody with deeper understanding of how this system would work in Nigeria to educate us all; the Muslim Umma in particular.

Dr. Salisu Ishaku, Abuja