Diversification of Islamic Financial Instruments
44
The shares and sizes of these products in the entire Islamic banking segment are presented in
table given below:
Table 15: Sizes and Shares of Deposit Mobilization Products
Funding Mode Local Currency
(Million Naira)
Dollar Equivalent
(Million $)
% of Total
Financing
Qard Hasan 22,038.01 72.37 46.39
Mudarabah
Investment Accounts
25,465.21 83.62 53.61
Mudarabah Term
Deposit
0.72 .0024 0.00
TOTAL FUNDING 47,503.94 156.00 100
Source: Computed from Jaiz Bank Annual and Islamic banking windows’ Management Accounts
From above table, Qard Hasan and Mudarabah constitute the common funding sources in the
Islamic banks in Nigeria with Mudarabah accounting for 53.6% and Qard Hasan constituting
46.4% of the funding sources. These two products are favored by the Islamic banks as they
provide sources of free funds and loss bearing deposits.
On the Financing side, the snap shots of the products used for corporate and retail customers
are presented in the next two tables, respectively:
Table 16: Financing Products – Corporate Customers
Customer Requirements Islamic banking product
Working Capital Murabahah
Local Purchase Order (LPO)
Project/Venture Financing Musharakah
Financing of shareholding companies, small
personal enterprises and Public Private
Partnership
Diminishing Musharakah
Contingent Liabilities (Performance bond,
Advance Payment Guarantee, etc.)
Kafalah contract
Financing Construction/Manufacturing Istisna/Parallel Istisna
Follow-ups, Inspection and taking delivery Wakalah
LC Financing Murabahah/Ijarah wa Iqtina
Agro Financing Salam/Murabahah/Ijarah wa Iqtina
Source: Compiled from the websites of Jaiz Bank, Sterling and Stanbic IBTC Non-interest banking windows and
Tijara Islamic Microfinance Bank.
Table 17: Financing Products – Retail Customers
Customer Requirements Islamic Banking Product
Interest free loan (mainly for internal
customers)
Qard Hasan
Household Appliances, Auto Finance Murabahah
Medical Treatment, School Fees, Hajj and
Umrah, Logistic Rent-a-Month and Airtime
Ijarah Service
Home Finance Ijarah wa Iqtina
Source: Compiled from the websites of Jaiz Bank, Sterling and Stanbic IBTC Non-interest banking windows and
Tijara Islamic Microfinance Bank.