Diversification of Islamic Financial Insturments
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experts have to understand the structure of the engineered products. This
understanding can only come through extensive training. In Nigeria, Nigerian
Trainings and Seminars35 in conjunction with HRODC Postgraduate Training Institute,
Doha offers training programme in Advanced Islamic banking and Finance for Islamic
bankers and financiers. The programme has a module on Islamic Capital Markets
incorporating Islamic Financial Engineering and Islamic Microfinance.
Additionally, the Islamic Institute of Accounting and Finance36 in Nigeria offers some
programmes leading to a certification such as Certified Islamic Finance Professional
(CIFP). Part of the programme involves extensive training on Islamic Financial Market,
Instruments and Products. Similarly, the International Institute of Islamic Banking and
Finance Bayero University37, Kano offers certification programmes leading to the
award of professional certificates in Islamic banking and finance, Islamic capital
market as well as Takaful.
The level of Islamic financial engineering is very low in Nigeria. However, there are
some institutions providing the platform for capacity development in the area thus
signaling a promising future for financial engineering in Islamic finance in Nigeria.
3.1.6 POLICY RECOMMENDATIONS
The Islamic finance sector is a recent development on the Nigerian financial landscape which
has high prospects for growth as reflected in the growth potentials of some key indicators. An
analysis of the segment revealed that most of the basic Islamic financial contracts are offered
by the Islamic financial institutions, however the following contracts dominate: Qard Hasan,
Mudharabah, Murabahah and Ijarah. The sector is also being challenged by lack of adequate
Islamic finance architecture which poses threat to its growth and development. The legal and
regulatory environments are still not fully developed to effectively support the workings of
Islamic finance. The legal system limits the ability of the regulatory bodies such as the CBN to
come up with robust liquidity management instruments for Islamic financial institutions. It
also poses some difficulty to operators in documenting legal requirements during products
development. Additionally, the Islamic financial institutions are constrained largely by lack of
knowledge and expertise to come up with sophisticated Islamic financial instruments beyond
the traditional instruments. This has adversely affected the ability of the institutions to
innovate thereby limiting the diversification of Islamic financial instruments in Nigeria. There
are however great expectations that over time we will begin to see innovations in the
development of the Islamic financial instruments as there are some educational institutions
offering courses in financial engineering in Islamic finance in the Country. This will expectedly
bridge the knowledge gap of the operators and facilitate innovations in product developments.
For proper development of diversified Islamic financial instruments, the following key
recommendations are critical:
35 Details of courses offered available at this website:
36 Details of courses by the institute are available at the website
37 Details of courses are available at the website