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From Adanna Nnamani, Abuja
Nigeria is seeking to widen access to capital for individuals, entrepreneurs and businesses through ethical and non-interest finance, amid efforts to address funding gaps and promote greater participation in productive economic activities.
This was the thrust of discussions at a press conference in Abuja on Tuesday where speakers highlighted the potential of ethical finance to provide alternative funding channels for businesses and individuals while promoting transparency, responsible investment and asset ownership.
Shariah Adviser to Open Space, Zubair Mughal, said Islamic finance had moved beyond being a niche, faith-based alternative and was increasingly becoming part of the mainstream global financial system.
Mughal, who cited the Islamic Corporation for the Development of the Private Sector-LSEG Islamic Finance Development Report 2025, said global Islamic finance assets stood at about $5.98 trillion in 2024.
He said Nigeria had significant potential to become a leading Islamic finance hub in West Africa, given its large population, entrepreneurial base, capital market and growing demand for non-interest financial products.
“Islamic finance is no longer a niche segment of the financial industry. It is becoming a mainstream component of global finance, driven by principles such as asset-backing, transparency, fairness, risk-sharing and ethical investment. For Nigeria, these principles can be particularly relevant in addressing some of the barriers to infrastructure financing, SME development, agriculture, housing, trade and financial inclusion,” Mughal said.
According to him, Nigeria’s non-interest finance industry reached N5.77 trillion in 2025, with sovereign Sukuk accounting for N1.19 trillion.
He said the sector comprised four non-interest banks, five Takaful operators and 20 Shariah-compliant funds.
Mughal said the next stage of development would require practical, accessible and technology-driven products, supported by effective regulation and credible Shariah governance.
He noted that the Central Bank of Nigeria had established a regulatory framework for non-interest banking, while the Securities and Exchange Commission had supported the development of the Islamic capital market, including Sukuk.
Also speaking, Chief Executive Officer of Open Space, Titus Adakole Ikeh, said the initiative was aimed at changing the way financial services were delivered by placing greater emphasis on economic participation and the needs of customers.
He said finance should go beyond transactions to help individuals make informed decisions, build businesses, acquire productive assets and grow wealth.
“For me, the real measure of Open Space will never be the number of products we have on our platform. It will be the number of lives we are able to positively influence through those products, the businesses we help to grow, the assets we help people acquire, the opportunities we help create and the trust we earn along the way,” Ikeh said.
He said ethical finance was built around principles of fairness, transparency, accountability, trust and responsible capital deployment, noting that the concept was not restricted to a particular religious or demographic group, but built on principles that could benefit a broad range of customers.
He said financial inclusion should not be limited to opening bank accounts but should enable people and businesses to participate meaningfully in economic activity.
On his part, Chief Operating Officer of Open Space, Oscar Ede, said the success of ethical finance would depend largely on the systems and controls supporting the products, rather than simply the structures used to describe them.
Ede said the financing model included Murabaha, Ijarah, Diminishing Musharakah and Mudaraba, each designed around specific customer needs and contractual requirements.
He explained that Murabaha provides a trade-based structure where an asset is acquired and subsequently sold to the customer at a disclosed cost and agreed profit, while Ijarah involves acquiring an asset and leasing it to the customer. Diminishing Musharakah provides a pathway to gradual ownership through a declining partnership between the financier and customer, while Mudaraba involves investment based on agreed profit-sharing arrangements.
“What is important is that these are not merely names attached to financial products. Each structure carries specific contractual, operational and governance requirements. For example, Diminishing Musharakah requires clear ownership tracking, asset management, automated payment monitoring and proper documentation throughout the relationship. The objective is to ensure that what we promise to customers is supported by processes that can consistently deliver it,” Ede said.
