Jaiz Bank has successfully ushered in an alternative banking system that is interest-free and has been friendly to small business holders. In this virtual interview, the Managing Director/Chief Executive of the Bank, Mr. Hassan Usman spoke with JONATHAN EZE AND CEES HARMON, and opens up on the tremendous growth of the bank evidently reflected in figures and insists that it is not biased against any religious group or Nigerians, among other sundry matters.
Q: You started operations in Nigeria when commercial banks had already taken a good share of the Nigerian customer base. What confidence drove you to this market?
A: We went into the market because of the enormous potential that the non-interest banking model provide for an emerging economy such as ours and its innovative financing structure which is certainly friendly to the burgeoning SME’s in Nigeria, as well as millions of Nigerians yearning for alternative banking system that will enable them conduct financial transaction that is both ethical and interest-free. We saw over 26,000 (Twenty six thousand) Nigerians subscribing to our initial public offer in 2005, a testament to demand for such a novel banking system.
Q: How would you rate Nigerians’ reception of the novel Islamic Banking phenomenon and why do you say so?
A: The reception of Islamic Banking in Nigeria has been tremendous so far. The Bank has grown its branch network from 3 in 2012 to over 40 in 2020, Balance Sheet has grown from N12 billion in 2012 to 192 billion in Q1 2020, with over half a million customers across all faith and geography. The industry has also grown in leaps and bounds with two full-fledged Non-interest banks and two windows. The capital market sector is also growing and providing support to the banking sector which saw the maiden Sukuk issuance in Osun State followed by two FGN issuances with the third one due to be completed in June 2020. With the third Sukuk issuance, the total Sovereign Sukuk stock will stand at NGN350 billion. The Islamic insurance sector (Takaful) has 3 players and two windows that are providing vital support to the market. With these, we believe the Non-interest Banking has come to stay in Nigeria.
Q: Are your business interests limited to Nigeria?
Presently, our operations are only within Nigeria; however, our vision is to cover the entire sub-Saharan African region in the near future.
A: In a society like ours where some people take pride in cutting corners, how do you align ethics with risk management?
Good risk management requires good ethics; and good ethics requires good risk management. The effectiveness of enterprise risk management depends largely on the integrity and ethical values of the people who create, administer, and monitor those activities. To ensure effective risk management and compliance culture, the bank follows a robust corporate governance culture which includes domestication of international standards issued by the Islamic Financial Services Board and the Accounting and Auditing Organization for Islamic Financial Institutions. In our model of banking, ethics is in-built and not bolted on. Our governance structure also has an extra layer of oversight that does not exist in conventional finance, that addition is the Advisory Committee of Experts (ACE). The ACE is an independent committee that looks into our transactions and activities in a bid to ensure compliance with Islamic commercial jurisprudence and general oversight on behalf of all the stakeholders.
Q: Being a corporate entity, it is expected that your banking services are not religiously biased. Can you boast of unbiased service to all Nigerians?
A: Yes, that is exactly what we provide to our half a million customers – world class ethical financial services irrespective of class, creed, gender, race or religious belief. The same thing applies to our workforce that reflects the entire fabric of the nation.
Q: You have a “Waste-to-Wealth” collaboration programme with a plastic company, which this medium reported to be a potential model for Nigeria sometime in early March this year, how successful is that programme so far? What do you think is the future of the programme?
A: The Green Account Initiative is part of the bank’s effort in promoting sustainability and financial inclusion by targeting the unbanked and youth through the green club, the pilot phase has recorded great success in Abuja. We have diverted 73,171kg of waste from the landfill from the 1st of February to 31st of December, 2019, during the first 11 months of the pilot. This is a 2352% increase from the first to current month in the total weight of recyclable waste diverted.
For the period in question, 10 Full time Jobs and 250+ Women collectors were employed, 252.29MT/Mth of CO2 emission was saved (equivalent of 653 cars taken off the road). We plan to extend the initiative to other parts of the FCT as well to commercial hubs like Kano (the most populous city in the North).
Q: How badly is COVID-19 likely to affect your operations? What is your reach across the country?
A: The COVID-19 pandemic has brought the world into exceptionally difficult and largely uncharted waters. The global economy and the public are feeling the strain of the impact, Jaiz Bank inclusive. However, as a responsible organization, we recognized our responsibility to the society and through our business continuity plan and efficient resource planning; we have continued to provide essential services to our customers across the country while protecting health and wellbeing of our staff and customers. We have enhanced our digital customer touch points to ensure that they have seamless remote banking experience.
Q: Do you have corporate social responsibility programmes? How would you rate its success on a scale of 1 to 10?
A: Yes, we operate our CSR programmes through Jaiz Charity & Development Foundation. Through the foundation – which has full autonomy – the Bank channels all non-Sharia compliant income for charitable activities. To date, the Foundation has intervened in Health, Sanitations & Water, Education, Economic Empowerment and Humanitarian activities across the length and breadth of this country.
Q: Considering the growth of Jaiz Bank today, where do you think this bank will be in the next ten years in terms of financial and service strength? Do you expect the emergence of competitors in this sphere?
A: We aspire to be among tier 1 banks in terms of size in the next 10 years while remaining the dominant non-interest bank in sub-Saharan Africa. With regards to competition, we already have other players in the market; a new bank was recently licensed to operate as full-fledged regional non-interest bank, while two other banks are operating non-interest banking windows. We believe the market is robust enough to accommodate the current players and others that may come in the future.
Q: Do you have any message for Nigerians?
A: I would like to thank Nigerians especially our teaming customers, on behalf of the Board and Management of the Bank for their support since the inception of our operations in the year 2011. Without them, we would not have achieved the milestones we attained as of today.
In conclusion, I want to urge them to continue to support the Bank, as we continue to provide innovative and ethical banking products and services that guarantees superior customer experience.