Stakeholders chart pathways to deepen adoption of Takaful

Experts drawn from the non-interest finance sector in Africa have canvassed the need to create pathways that would deepen interest and adoption of non-interest finance and takaful among Africans.

This was the submission of stakeholders during the second edition of the African Takaful and Non-Interest Finance Conference, organised by Noor Takaful Insurance Limited in Lagos on Tuesday.

The event themed “Islamic Finance and Takaful: Building Resilience in a Volatile World” focused on finding new ideas that would ensure that financial resources become more equitable, especially to the underserved.

Delivering the welcome address, the Chairman of Noor Takaful Insurance Limited, Muhtar Bakare, explained that non-interest finance and Takaful have become the most tenable, time-tested, and culturally appropriate catalysts for change in Africa at a time when conventional finance has fallen short of meeting people’s basic needs.

Mr Bakare said takaful and non-interest finance, which are rooted in the principles of solidarity, trust, equity, and risk sharing, remain the best models as they align seamlessly with the teachings of all three Abrahamic faiths and with the communal ethos of African societies.

According to him, Takaful presents alternative channels of financial mediation based on universally accepted principles that can accelerate financial inclusion well beyond Muslim communities. He stated that the company was already providing access to affordable capital in underserved communities, catalysing the accumulation of savings, while encouraging prudent ethical investment.

“Our governance structure compels us to deliver services that are totally aligned with the aspirations of our host communities and to engage everyone with integrity, transparency, and respect. We’re not just profit maximising enterprises, we’re collaborative endeavours by all stakeholders working together to make our communities more just and equitable,” he said

He stated that he was confident that the conference would inspire new knowledge and foster new partnerships that would lead people out of poverty into prosperity and unlock Africa’s elusive potential.

In her remarks, the Chairperson of the National Insurance Commission, Halima Kyari, who was represented by the Deputy Commissioner, Usman Jankara, stated that the agency has been instrumental in promoting the growth of the Takaful insurance industry in Nigeria through several initiatives, some of which include the issuance of Takaful Operational guidelines and the license of five Takaful operators.

Mrs Kyari noted that Islamic finance was growing rapidly, adding that the sector accounts for approximately 3% of Nigeria’s financial market, which is valued at $3.8 million.

Also speaking, the Vice Chairman of Noor Takaful Insurance, Aminu Tukur, said the second edition of the conference was held to deepen knowledge and educate people about Takaful, as it remains the only financial option that provides a fairer alternative.

Mr Tukur noted that non-interest finance or takaful provides opportunities for transparency, accountability, empathy, and ethics, as opposed to what occurs in conventional finance.

“It is not just about making money or reporting a profit for the year but ensuring that everybody is carried along. For our takaful model, we have our participants who are part of our company. Under the model, they get from our underwriting profit. The same thing happened with alternative finance; people are more comfortable because there is transparency and accountability. More than ever before, we need organisations to ensure that people have all the support they can get,”he said.

He further stressed that the Takaful industry has witnessed considerable growth in Nigeria, adding that Noor Takaful alone has recorded 15,000 participants and paid N9 billion in claims on a timely basis.

The two-day event also featured panel sessions involving a representative from the United Nations and leading insurance experts who provided insights on expanding Takaful insurance portfolios, sustainable financing, technology, crypto currency, research and development, and the use of Takaful in environmental sustainability.

Noor Takaful Insurance Ltd., a takaful insurance firm, was established and duly licensed by NAICOM in April 2016 as the first full-fledge composite takaful insurance operator in Nigeria with a 100 per cent indigenous Nigerian shareholding. The Company currently plays the pioneering and leading role in unlocking takaful insurance potential for Nigeria. Its operational framework is regulated by NAICOM and is also subject to the Insurance Act 2003.