How Non–interest Capital Market Will Aid Trillions

By Tolulope Oke

According to the Securities and Exchange Commission (SEC), the non-interest capital market has tremendous potential and is poised to increase market capitalization by 25% by 2025.

This was stated by the Director-General of the SEC, Lamido Yuguda during a meeting with the Executives of the Non-Interest Financial Institutions Association of Nigeria in Abuja over the weekend, Independent Reported.

He said, “We are talking of trillions, that means that right now we are not really scratching the surface. Both the market and the Commission need to do more. We are working on ensuring that we have a framework that looks at issues relating to the non-interest capital market and ensures we tackle them.

“There are a lot of opportunities in the market right now for non-interest products. The biggest players right now are the pension fund. Pencom is interested that whatever product is there have some basic risk management features in them but I think there is a lot that we can do.

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“You talk about the sukuk market and the move towards complexities, I would say that even the simple sukuk, we have not had enough of it. When we came in 2020, it was only the sovereign sukuk and the sub national sukuk from Osun state.

“We have tried to attract interest to the product by doing a lot of seminars and re-joined IFSB fully. We also tried to encourage private issuers, as well as show the potential of the Sukuk to other players in the market. This is a simple product but a very powerful one”.

Yunuga further stressed that Nigeria must follow the standard Sukuk business model, in which funds are raised through Sukuk, assets are developed, and then cash flows are produced from the assets, which are then distributed to Sukuk holders.