Framework for an Effective Islamic Microfinance in Northern Nigeria
13 Pages Posted: 15 Jun 2010
Date Written: June 29, 2009
Abstract
In recent years, microfinance has emerged as an important instrument to help a large number of “unbankable” members of society, as a tool to help reduce poverty and encourage economic growth in neglected parts of the world. In order to achieve this, the Microfinance Policy, Regulatory and Supervisory Framework for Nigeria was launched on December 15, 2005 with a view to addressing the financial needs of the low income people. As at 31st January 2009, a total of 846 microfinance banks were licensed by the Central Bank of Nigeria of which, only 170 are in Northern Nigeria, though the region including Abuja has a population of 75 million out of the total population of 140 million in Nigeria. Kano State, the commercial centre of the North with its population of about 10 million has only six (6) microfinance banks and the highest number of economically active poor, while Yobe State, with its population of 2.3 million has only one (1) microfinance bank. This paper represents a proposal for an effective Islamic microfinance in Northern Nigeria. The paper is descriptive and provides the framework for establishing Islamic microfinance and the specific roles various stakeholders are expected to play in the effort to realise the economic potentials of the Muslim dominated region. The paper posits that unless Islamic microfinancing is given necessary attention in the North, poverty would continue to bedevil development in the region. The paper therefore recommends that stakeholders should try to tackle the problem of poverty in northern Nigeria.
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