Non-interest banking is for all Ghanaians, not only muslims – IFRIG
The Institute for Research and Innovation in Non-Interest Banking and Finance (IFRIG) has backed the Bank of Ghana’s position that non-interest banking is not exclusively meant for Muslims.
According to IFRIG, non-interest banking is an inclusive financial model that can be accessed by individuals and businesses regardless of their religion, ethnicity or personal beliefs.
The institute said Ghana’s financial sector should view non-interest banking as an alternative and complement to conventional banking, rather than as a replacement for the existing system.
IFRIG explained that while conventional banks mainly generate income through interest on loans, non-interest banks use financing arrangements linked to real economic activities.
These include asset-based financing, leasing, trade and investment activities, as well as equity and profit-sharing partnerships.
Under such arrangements, a financial institution may purchase an asset and sell it to a customer at an agreed profit, lease an asset to a customer, or enter into a partnership or investment arrangement.
The institute stressed that customers do not have to be Muslims to access such products.
It said Christian entrepreneurs, farmers, traders, professionals and investors can use non-interest banking services based on their financial needs and the commercial value of the products.
IFRIG points to international examples
IFRIG said international experience shows that non-interest banking can operate effectively in multi-faith societies.
It cited the United Kingdom, where non-interest financial products are available to customers regardless of their religious background.
Nigeria was also highlighted as an African example where non-interest banking operates alongside conventional banking and serves customers from different religious and social backgrounds.
Sukuk could support development
IFRIG also identified opportunities for Ghana’s capital market through the introduction of Sukuk, commonly referred to as non-interest bonds.
The institute said Sukuk could provide an additional financing option for major development and infrastructure projects, including roads, hospitals, schools, housing and energy projects.
It argued that such instruments could help attract both domestic and international investors and provide Ghana with additional sources of investment at a time when the country is seeking sustainable financing options.
According to IFRIG, the development of non-interest finance could also create opportunities for banks, investment firms, accountants, auditors, lawyers, fintech companies and other capital-market professionals.
The institute said the sector could introduce new financial products and investment structures while contributing to the diversification and deepening of Ghana’s financial system.
IFRIG therefore urged the public debate on non-interest banking to move beyond religious considerations and focus on its potential to expand financial choices, promote investment, deepen the capital market and support economic development.
It said providing a regulatory framework for non-interest banking would not replace conventional banking or force consumers to adopt the system, but would instead give individuals, businesses and investors another regulated financial option.
“Non-interest finance is not for Muslims alone. It is a financial alternative for every Ghanaian who chooses to use it,” IFRIG said.
Source: Myjoyonline.com
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