By Bashir I Hassan
Few people have life playing out their own script. Hassan Usman was one of such people. Being at the coveted seat of the Managing Director/CEO of Jaíz Bank Plc, Nigeria’s pioneering Islamic Bank, is a dream that comes true.
But, to be frank, Hassan’s rise to the top has had less to do with an ambitious, calculated plan than an aspiration, aided by destiny and a passion to succeed.
When he joined the bank in 2005 it was a deliberate and conscious decision. He was interested in being “part of an institution that will be a niche, to provide an alternative financing model that complements what the mainstream finance is all about,” as he once said.
No doubt his background influenced his interest in Islamic banking. Many conscious Muslim finance and banking professionals steer off that career path because of the issue of “interest-bearing” nature of conventional banks which Islamic faith abhors. This is why Islamic banks are often called non-interest banks. So when the opportunity presented itself for work in an Islamic finance institution, Hassan grabbed the chance without hesitation.
“I used to attend the road shows that took place before the establishment of Jaíz International which was the vehiclethat transformed into Jaíz Bank,” he once said.
Islamic banking is a system that is based on the principles of Islamic law (also known Shariah) and guided by Islamic economics. Two basic principles behind Islamic banking are the sharing of profit and loss and the prohibition of the collection and payment of interest.
Hassan did not join Jaíz as a green horn. He came in equipped with conventional banking experience having worked in various capacities at the now defunct Inland and NAL Merchant banks.
Prior to that, he signalled his readiness for the top when he got a first class degree in Accounting from the Ahmadu Bello University Zaria in 1985..
At inception in 2012, not many people believed that Jaíz Bank would thrive in a tough business environment like ours because of the unique business model it was offering.
Many hinged their doubts on the paucity of Islamic financial instruments, inadequate regulatory framework, and the fact that a pioneering institution often faces challenges.
But the good news is that, between then and now, the bank’s deposits have skyrocketed by 1,433 percent — from N3 billion to N46 billion today. Its management also recorded a unique feat on the strength of its balance sheet going up from N12 billion to N60 billion within the period. In addition, its asset financing has reached N30 billion just as its customers are over 150,000 across different ethnic and religious divides in the country.
Hassan has been part and parcel of these achievements in various capacities at Jaíz International and eventually at Jaíz Bank.
Between 2005 and 2011 he was the General Manager (Investment Banking) at Jaíz International Plc responsible for the investment banking activities, coordinating the capital raising exercise to establish the proposed Jaíz Bank International back then. These were the years when the groundwork of a very successful Jaíz Bank was laid.
For recording tremendous success as the capital raising strategist, he was saddled with another onerous responsibility—market penetration strategy, which is very essential if Jaíz bank was to survive in the tough Nigeria’s banking sector. He carried out this responsibility with remarkable success between 2011-2013.
Hassan’s contributions to the development of Jaíz Bank were recognized when he was made the acting MD/CEO of the bank between August and November 2013, when he was appointed Executive Director Operations and IT providing leadership and strategy in delivering services.
From that vantage position of ED, Hassan was appointed the substantive MD/CEO of Jaíz Bank last May.
In a recent media interview, he explained that: “So it dawned on me that the task of moving Jaiz Bank from a niche to the mainstream of the financial system in Nigeria is squarely on my shoulders. Working with a team that we share the same type of vision, we have to work round the clock to deliver on that commitment. We believe there is a place for Islamic finance or non-interest banking… because there are people who otherwise will not be in the financial system.”
The phenomenal growth of Jaíz Bank has attracted the attention of world leaders and financial institutions. According to The Economist, “Ernst & Young, a consultancy and accounting firm, estimates that Islamic banking assets grew at an annual rate of 17.6 percent between 2009 and 2013, and will grow by an average of 19.7 percent a year to 2018.”
On the other hand, the International Finance Corporation (IFC) projects that the industry will be worth $4 trillion by 2020. It is for this reason one needs to appreciate the foresight our CBN leadership for facilitating the establishment of an Islamic Bank in Nigeria.
A number of countries especially in Europe, North America and Asia went the extra mile adjusting their banking and tax laws to permit transactions in Islamic finance just as some countries allowed the listing of Shariah-compliant products on their stock exchanges.
In Japan for example, a law was passed in 2009 that allows banks to conduct Islamic Finance. The Australian Board of Taxation announced changes in its tax law that allowed its citizens to access Islamic financial capital. The Board says “access to diverse sources of offshore capital is important in the context of Australia being a net capital importer. The Board recognizes that Islamic finance may provide a further finance option to help meet this demand, particularly for infrastructure projects in Australia.”
Furthermore, Shariah compliant products have been listed in all the countries that matter in the world. The Toronto Stock Exchange (TSX)
Sharia index was launched in 2009. The Dow Jones Islamic Market Indexes were launched in 1999. In 2003, double stamp duty for Islamic mortgages was abolished while in 2007 in Hong kong, Hang Seng Islamic China Index Fund was launched.
This is a unique business model that makes the bank that Malam Hassan heads tick. Jaíz lends money to people, like conventional banks. But it is kind of a business agreement between the bank and the borrower. The borrower will run the business while the bank will look over. The profit of that business will be shared between the bank and the borrower in a prefixed rate documented earlier in the agreement.
Jaíz bank also provides services and charges for these services. It is open to all Nigerians irrespective of their faith. Interestingly, when Jaíz commenced operations back in 2012, the first three customers that took facilities from the bank were non-Muslims. The MD is today proud of his Port Harcourt branch, forecasting it to be the most profitable branch in the very near future as businesses, especially operators in the oil service sub-sector are eager to do business with Jaíz.
If the CBN can further make the environment more conducive to Islamic finance, Jaíz Bank under the leadership of Malam Hassan will surely replicate this success in West and Sub-Saharan Africa. In addition to aiding the economic development and financial inclusion project of the monetary authority, it will also project the CBN framework for Islamic finance as a reference point in Africa for other countries to understudy.
Malam Hassan and his team at Jaíz Bank, will ever be remembered as the pioneering Islamic finance experts that showed the way.
Hassan, is an Abuja-based financial analyst.
