Few people have life playing out their own script. Hassan Usman is one of such people. Today he sits at the coveted position of Managing Director/CEO of Jaíz Bank Plc, Nigeria’s pioneer Islamic bank, in what is easily the fulfilment of a dream. Hassan’s rise to the top has had less to do with an ambitious, calculated plan than an aspiration, aided by destiny and a passion to succeed.
When he joined the bank in 2005 it was a deliberate and conscious decision. He was interested in being “part of an institution that will be a niche, to provide an alternative financing model that complements what the mainstream finance is all about”, as he once said.
No doubt his Islamic background influenced his interest in Islamic banking. Many conscious Muslim bankers yearned to work in an Islamic financing institution. Yet many budding Muslim finance and banking professionals steer off that career path because of the issue of the “interest-bearing” nature of conventional banks which Islamic faith shuns. And this is why Islamic banks are often called Non-interest banks. So when the opportunity presented itself for work in an Islamic finance institution, Hassan grabbed the chance without hesitation. He says: “I use to attend the road shows that took place before the establishment of Jaíz International which was the vehicle that transformed into Jaíz Bank.”
Islamic banking is a banking system that is based on the principles of Islamic law (also known as Shariah) and guided by Islamic economics. Two basic principles behind Islamic banking are the sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest.
However, back in 2005, he did not join Jaíz as a green horn. He came in equipped with conventional banking experience having worked in various capacities at the now defunct Inland and NAL Merchant banks.
A first class graduate in Accounting from Ahmadu Bello University, Zaria in 1985, Hassan signalled his readiness for the top.
At inception in 2012, not many people believed that Jaíz Bank would thrive in a tough business environment like ours because of the unique business model it was offering. Many rested their doubts on the chances of its promoters on the paucity of Islamic financial instruments, inadequate regulatory framework, and the fact that a pioneering institution in any filed always face imaginable and unimaginable challenges.
But the good news is that between then and now, the banks’ deposits have skyrocketed by 1,433 percent – from N3 billion to N46 billion today. Its management also recorded a unique feat on the strength of its balance sheet going up from N12 billion to N60 billion within the period. In addition, its asset financing has reached N30 billion just as its customers are over 150,000 across different ethnic and religious divide in the country.
Hassan has been a key figure in Jaíz Bank since he joined in 2005. . Between 2005 and 2011 he was the General Manager (Investment Banking) at Jaíz International Plc responsible for the investment banking activities, in particular coordinating the capital raising exercise to establish the proposed Jaíz Bank international back then. These were the years when the groundwork of a very successful Jaíz bank was laid. For recording tremendous success as the capital raising strategist, Hassan was saddled with another onerous responsibility—market penetration strategy, which is very essential if Jaíz bank is to survive in the tough Nigeria’s banking sector. He carried out this responsibility with remarkable success from 2011 to 2013.
Hassan’s contributions to the development of Jaíz bank were recognized when he was made the acting MD/CEO Jaíz bank between August and November 2013. In November 2013 Hassan was appointed Executive Director Operation and IT with the responsibility of overseeing the operation, information technology and financial control function, providing leadership and strategy in delivering services to customers and other stakeholders.
From that vantage position of ED, Hassan was appointed the substantive MD/CEO of Jaíz bank last May – the beginning of a dream. Hassan, in a recent media interview, explained it thus: “So it has dawned on me that the task of moving Jaiz Bank from a niche to the mainstream of the financial system in Nigeria is squarely on my shoulders. Working with a team that we share the same type of vision, we have to work round the clock to deliver on that commitment. We believe there is a place for Islamic finance or non-interest banking… because there are people who otherwise will not be in the financial system”
The phenomenal growth of Jaíz bank has attracted the attention of the global media and financial institutions. According to the Economist, “Ernst & Young…estimates that Islamic banking assets grew at an annual rate of 17.6 percent between 2009 and 2013, and will grow by an average of 19.7 percent a year to 2018.” On the other hand the International Finance Corporation (IFC) projects that the industry will be worth $4 trillion by 2020.
A number of countries especially in Europe, North America and Asia went the extra mile of adjusting their banking and tax laws to permit transactions in Islamic finance just as some countries allowed the listing of Shariah-compliant products on their stock exchanges. In Japan, for example, a law was passed in 2009 that allows banks to conduct Islamic Finance. The Australian Board of Taxation announced changes in its tax law that allowed its citizens to access Islamic financial capital. The board says “access to diverse sources of offshore capital is important in the context of Australia being a net capital importer. The Board recognizes that Islamic finance may provide a further finance option to help meet this demand, particularly for infrastructure projects in Australia.”
sure, what makes Jaíz Bank thick is its unique business model. Jaíz lends money to people like conventional banks. But it is kind of a business agreement between the bank and the borrower. The borrower will run the business while bank will look over. The profit of that business will be shared between the bank and the borrower in a prefixed rate documented earlier in the agreement. Jaíz bank also provides services and charges for these services. It is open to all Nigerians irrespective of their faith. And, interestingly, when Jaíz commenced operations back in 2012, the first three customers that took facilities from the bank were non-Muslims. The MD is today proud of his Port Harcourt branch, forecasting it to be the most profitable branch in the very near future as businesses, especially for operators in the oil service sub-sector that are eager to do business with Jaíz.
If the CBN can further make the environment more conducive to Islamic finance, Jaíz Bank under the leadership of Malam Hassan will surely replicate this success in West and Sub-Saharan Africa. In addition to aiding the economic development and financial inclusion project of the monetary authority, it will also project the CBN framework for Islamic finance as a reference point in Africa for other countries to understudy. And Malam Hassan and his colleagues at Jaíz will ever be remembered as the pioneering Islamic finance experts that showed the way.
Piece contributed by Bashir l. Hassan
