Ridwan Sanusi is a leading voice in Islamic finance in Nigeria. He is a finance and composite investment professional with nine years of experience in banking, management consulting, financial education and coaching. A member of the Certified Financial Education Instructor and the Certified Finance Islamic Executive, he started personal finance training and coaching @muslimfinancecoach aimed at helping Muslims achieve financial freedom through money management and business decisions. smart investment.
In January 2021, he founded the Smart Halal Investors Club, a global community of like-minded people passionate about growing their wealth in a halal way. His passion for Islamic Fintech led him to put together a team of brilliant minds to launch Nigeria’s interest-free business finance platform, WeFundMatch. In his role as CEO / Co-Founder of the company, Sanusi leads a team of experts in technology, Islamic finance, credit analysis and Islamic jurisprudence to close the financing gaps of small and medium enterprises (SMEs) in Nigeria. In this interview with IJEOMA THOMAS-ODIA, he discussed issues of Islamic financing in Nigeria.
Islamic finance appears to be poorly adopted in Nigeria. Why was it so?
I don’t think Islamic finance has been badly adopted in Nigeria. I think Nigerians are the ones who attach religious sentiments to Islamic finance, including some Muslims. There is a massive shift in the global Islamic finance market. In 2019, global Islamic finance assets were estimated at $ 2.88 trillion and are expected to reach $ 3.69 trillion by 2024. Nigeria has had its own share of this growth. In the space of four years, the federal government has lifted three Sukuk products aimed at rehabilitating roads and providing infrastructure to citizens. These products have been oversubscribed. Most recently, pension fund administrators have been allowed to offer interest-free products to their clients. In every corner of the Nigerian financial system, you will find an interesting alternative. This was not the case six years ago.
Can non-Muslims benefit from Islamic banking? if yes, how?
Yes, I always say that Islamic banking / Islamic finance is not just for Muslims. It is for humanity. The principles of Islamic banking align with the good virtues that everyone would like to see in others or in our financial institutions. Virtues such as equity, justice, equity, transparency, the spirit of brotherhood, trust, partnership and risk sharing.
In Islamic banking, the customer and the bank are seen as partners in the transaction and they both seek to ensure the proper execution of the transaction. In conventional banking, the bank is a lender who only cares about the interest it earns on the loan. When the customer is struggling to repay, rather than sharing the risk, the bank looks for ways to recoup the facility with additional interest that would have accrued on the default, further increasing the burden on the customer. The customer, on the other hand, will inflate his price of the goods / services in order to meet the interest payments. An interest-free bank will never say no to anyone who wants to transact with the bank because of their faith. Islamic banking is part of our daily dealings with each other, regardless of our religious beliefs.
Do we currently have enough Islamic financial institutions in the country?
At the moment, we only have three interest-free banks with a banking license against over 20 commercial banks. This should tell you that the business of commercial banking would eclipse interest-free banks. In an economy like Malaysia where the number of interest-free banks is almost the same as their commercial counterparts, their people are reaping the benefits of Islamic banks. So we need more interest free banks in Nigeria.
Interest-free banks can provide financial products and services that will help support small businesses, foster financial inclusion, and reduce unscrupulous lending activities by some commercial and microfinance banks. Interest-free finance products are designed to help preserve and nurture the wealth of individuals through effective collaborations among all stakeholders. What we see today in our conventional financial system amounts to a Ponzi scheme, a situation in which the people who benefit from the financial system are not the true owners of the money or the wealth. Islamic finance helps redistribute wealth through the system fairly by ensuring that you can only benefit from what you own.
You have set up a coaching team, the Muslim Finance Coach. What are some of your activities?
The Muslim Finance Coach is a personal finance and investment coach. It’s my personal brand. I started it because I saw the need for people, especially Muslims, to be financially educated so that they could take control of their finances. I believe the first step to building wealth is having financial literacy. Just as the popular saying goes “making more money won’t make you rich, knowing how to manage it will”. You cannot manage money if you lack financial knowledge or skills.
Some of my activities include individual coaching, group coaching, financial training and seminars, investment advice, financial planning. I use digital tools to drive most of my training and coaching activities. I regularly share valuable financial and investment advice on the social networks where I receive most of my clients. The COVID-19 pandemic and containment has given me the opportunity to expand my online reach and increase my engagement on social media platforms, especially Instagram where I am primarily active. As a finance and investment coach, I help many of my clients gain financial security, give up debts, earn extra income through halal investments, and increase their net worth in line with their Islamic values.
What makes your Smart Halal Investors Club and WeFundMatch unique in the Islamic finance space?
Although they seem to work in the same space, they serve two different purposes. The Smart Halal Investors Club (SHIC) is an investor community where members have exclusive access to credible halal investments that have been verified to be Sharia compliant and offer a high return on investment. Our goal at SHIC is to create a guilt-free way for our members to build generational wealth by providing them with a diverse portfolio of investments in various asset classes including real estate, fixed income, agriculture, start-up investments and actions and different regions.
WeFundMatch is a peer-to-peer business fundraiser that I co-founded with two of my friends. It is a Fintech solution to solve the double problem of obtaining ethical financing encountered by SMEs and a good return on halal investments. We use the latest technology to match these two engines of the economy seamlessly.
What is the loan method in Islamic finance, since it does not earn interest?
First, in Islamic finance it is forbidden to make money with money that is not backed by an asset. Islamic finance encourages investment in the real sector / economy. Indeed, charging interest on loans can create artificial transactions without any benefit to the economy – “A” gives money to “B” with 10% interest, “B” can give the same money. to “C” with an interest of 15%. and then “C” gives the money to “D” with 20%. Every part of this chain has benefited without having actual ownership of the money and without creating any tangible product or asset that will benefit the people.
Islamic banks, on the other hand, will enter into a partnership contract with a client who runs a business and shares the profits made on the transaction according to a previously agreed profit sharing ratio. Alternatively, the Islamic bank can buy an asset and sell it back to the customer at a fixed mark-up. When the customer is truly faced with business challenges, the interest-free bank as well as the customer will find effective ways to turn things around without inflicting damage or pain on the customer.