n unconventional industry player that functions on the model of Islamic banking system, Jaiz Bank Plc., is Nigeria’s national commercial bank that delivers Sharia-guided interest-free financial services to customers. It is the foremost and only non-interest bank (NIB) in the Nigerian market, and aims at becoming the leading force in promoting ethical banking in the sub-Saharan Africa region.
The bank emerged as an offspring of the former Jaiz International Plc., an institution formed in 2003 as a Special Purpose Vehicle (SPV) to institute a culture of non-interest banking in the Nigerian market. It commenced activities as a medium-sized service provider in the North-West, North-East, and the North-Central regions of the country in November 2011 after it was licensed by the CBN for regional operations. Upon the receipt of national operating license in 2012, the bank began to spread its sphere beyond Abuja, Kano, and Kaduna, to include all the six geo-political zones in Nigeria.
Since its establishment by some prominent Nigerian finance czars, such as Dr. Umaru Adbul Mutallab, who currently serves as the Chairman and Mr. Hassan Usman, who doubles as the Managing Director and Chief Executive Officer of the bank, among others, Jaiz Bank has spiced up the Nigerian banking sector with a unique flavour. Customers and shareholders alike have been treated to a never-before-experienced dimension to banking in terms of values in both online and offline services across its thirty-nine (39) branches across the country. Jaiz Bank has since maintained a steady course of financial inclusion in Nigeria. While conventional banks have the central role of operating as lenders and borrowers, Jaiz Bank’s central role is to operate as trader, its earnings coming from trading activities in commodities, assets, services and business investment.
As a non-interest bank (NIB), it thrives on multiple trading structures and relationships. These include sales-based structure, which accounts for earnings through profits from sales; from rents, as rent-based structure accounting for earnings from rents; from profit sharing, on partnership-based structure, providing profits from profit sharing, from fees, agency-related structure through which profit is earned by way of fees charged clients.
Jaiz Bank’s stock shares are privately held and its ownership lies with over 26,000 shareholders spread across the six geo-political zones of the country. Within three years of operation, it has rapidly grown its capital base to N15 billion, to beat the Central Bank benchmark for shareholders’ capital , and has constantly earned profit from its services , thereby spiking its asset value of twelve billion naira (N12 billion) in 2012 to sixty billion naira (N60 billion). Its margin of profit also expanded to an impressive fifty-five percent (55%) at eight-hundred and thirty four million naira (N834m) from five-hundred and thirty- seven million naira (N537m) in 2017. Its performances were impressed enough to earn it national operational licence from the CBN with its liquidity ration going southwards to 20% from 30%.
Jaiz Bank combines leading experts in NIB and conventional finance to build its management team. Much of the banks strides is thanks to the astute professional guidance provided by both the CBN and JAIZ’s in-house experts who ensure that processes and procedures are always up to speed and above board. Backed by a strong partnership with the Islamic Bank of Bangladesh, technical and management assistance are never in short supply at JAIZ. The bank is constantly sensitive to the ever changing profile of the industry and customers’ demands, and as such regularly and adequately deploys the necessary technology without sacrificing the Sharia tenets on profit.
Through the financing of working capital required for individuals’ businesses, the bank has assisted clients in financing the acquisition of inventory and raw materials for businesses; embarked on the purchase of building materials and construction projects for customers; and purchased automobiles and household appliances for customers, who then pay back at a stipulated cost with profit. The company’s working capital to pay for salaries, professional services, labour and travels is generated through ‘ijara’ service. This is a transaction whereby the bank purchases or leases an asset from the service provider and in turn leases or rents the asset to a customer.