Experts chart new pathways to takaful adoption

Financial experts drawn from the non-interest finance sector in Africa have stressed the need to create strategies that would deepen the adoption of non-interest finance and takaful in Africa.

The stakeholders who gathered at the second edition of the African Takaful and Non-Interest Finance Conference themed, ‘Islamic Finance and Takaful: Building Resilience in a Volatile World’ organised by Noor Takaful Insurance Limited in Lagos acknowledged the need for innovation in driving financial inclusion for growth across African countries.

Speaking at the conference, the Chairman of Noor Takaful Insurance, Muhtar Bakare, observed 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.

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 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 the Muslim communities.

He said 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 aligned with the aspirations of our host communities and to engage everyone with integrity, transparency, and respect. We are not just profit-maximising enterprises; we are collaborative endeavours by all stakeholders working together to make our communities more just and equitable,” he said.

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.

The Chairperson of the National Insurance Commission, Halima Kyari, who was represented by the Deputy Commissioner, Usman Jankara, said the agency was instrumental in promoting the growth of takaful insurance in Nigeria through several initiatives, some of which include the issuance of takaful operational guidelines and the licence of five takaful operators.

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.

“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.

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, cryptocurrency, research and development, and the use of Takaful in environmental sustainability.