Prospecting for Sustainable Micro-Takaful Business in Nigeria
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15 Pages Posted: 3 Feb 2012 Last revised: 28 Jun 2014
Date Written: February 1, 2012
Abstract
The emergence of Islamic insurance (takaful) has substantiated a paradigm shift in the global financial services industry and this shift, though emanated from the Islamic countries, has today been accorded global popularity. Yet, in Nigeria takaful is considered as a new phenomenon with its absence in insurance legislation and near zero appearance of takaful companies even with a Muslim majority population in the country. The paper intends to explore the takaful concept and particularly provide a mirror look at micro-takaful and also prosper strategies and modalities for the establishment of micro-takaful companies in Nigeria without contravening the related provisions in the Nigerian constitution. Takaful models and variety of products are discussed and three ways of initiating a micro-takaful entity are proposed (i.e. through the establishment of takaful Multipurpose Cooperative Societies, companies limited by guarantee and takaful partnership businesses) pending the realisation of takaful specific legislations from the parliament. The establishment of Takaful Development Association is observed to be one of the basic foundations that could support the takaful industry in Nigeria, more especially at this preliminary stage.
Keywords: Islamic Insurance, Islamic Finance, Risk Management
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