Islamic financing has gained ground in Nigeria in recent times. Further to this, Islamic finance institutions are being set up and the government at both state and federal levels have issued sukuk bonds. Indeed, the Nigerian Stock Exchange recently published Rules for Governing the Listing of Sukuk and Similar Debt Securities which came into effect on 23 July 2018 (“the Rules”).
The differentiators between Islamic finance and other types of financing are that Islamic finance is non-interest bearing finance and the activity being financed under Islamic finance must be Sharia-compliant. The question arises as to how Islamic finance institutions expect to make profit from non-interest bearing financing.
This article provides a brief overview of Islamic financing and a synopsis of the application of the Rules