SunTrust Bank, others sign financing agreement with ICD

Nigeria’s small and medium enterprises are set for a boost as SunTrust Bank and two others signed a financing memorandum of understanding (MOU) with the Islamic Corporation for the Development of the Private Sector (ICD) in Lagos yesterday.
ICD is a multilateral development financial institution and is part of the Islamic Development Bank (IDB) Group.

Speaking to the media immediately after the MOU signing, SunTrust’s Chief Executive Officer (CEO), Muhammad Jibrin, said that the deal has provided for the bank another line of funds to support the growth of small and medium size enterprises. He explained that non-interest loans are more supportive to businesses as there are no pressures of accumulated interests.

According to him, the bank embraced Islamic banking as part of its portfolio in order to provide adequate support to the small and medium enterprises which are growth drivers in the economy. Profit and loss sharing which he said is a major pillar of Islamic banking allows businesses enough time to thrive instead of being strangulated with interest payment burden.

Describing the strengths and benefits of non-interest financing, Jibrin said that any financial institution that provides non-interest banking will be able to have favorable and cordial relationship with its customers, as they are now partners and stakeholders in the business. He said that such partnership was good for the economy as businesses and enterprises suffering under heavy interest burden will now have relief.

Jibrin signed for the bank while Regional Officer Director, ICD, Mr. Okan Altasli signed on behalf of the Acting Chief Executive Officer & General Manager, ICD, Mr. Mohammed Al Ammari. The ceremony was witnessed by the Permanent Secretary, Ministry of Finance, Aliyu Ahmed who represented the Minister of Finance, Mrs. Kemi Adeosun.

According to the terms of the MOU, SunTrust Bank will get a financing of $10 million for lending to small and medium scale business on profit sharing basis instead of the normal banking interest-based system.

Altasli said that African countries were embracing non-interest banking which qualifies them for financing lines from the ICD.

The minister said that she considered the forum important because government was positioning the private sector as the key for growth. She added that government was exploring the benefits and capacities of Islamic financing for growth.