On Episode 7 of the radio show Financial Inclusion Today, Anchor Lehlé Baldé spearheaded the show with BusinessDay’s analysts Patrick Atuanya, Bala Augie, Lolade Akinmurele, Endurance Okafor and special guest Raji Adekunle, Lagos branch Manager of Jaiz Takaful Insurance, pondering on how non-interest banking/insurance deepens financial inclusion in Nigeria.
The guest Raji Adekunle, said Islamic insurance, which his company operates, is trying to fill the gap of excluded Muslims from the financial cycle, but however stressed that Takaful or Islamic Insurance was not Muslims alone.
Although the Islamic Insurance which is also called Takaful is new to Nigeria and prior to its existence, only the conventional insurance was practiced in Nigeria and this was not contributing much to bringing in more Muslims into the financial cycle, as the financial exclusion gap among Muslims was widening by the day.
“We discovered that many people wanted to come into the financial cycle or get involve in insurance, and our research showed that the religion and the believe of Muslims were the reasons why they could not get involved in conventional insurance, based on this, Islamic insurance came up. We are here as an alternative to conventional insurance,” Adekunle explained.
On some of the issues the Islamic Insurance is out to address which the conventional insurance companies are not looking at include; to address the issue of uncertainty, the issue of gambling, and interest.
“Those things are not in existence in Islamic sharia law, by this, we are now saying in Islamic insurance, one does not need to worry, either you have a claim or you do not have a claim,because you have two ways to benefit.If you have a claim, they will pay you your claim, they will settle you, if you do not have a claim, whatever you contribute, when they declare surplus, whatever that is left in the pool, you will also be compensated,” the guest cited.
He said their clients’ benefit in two ways in Islamic insurance unlike other conventional insurance.
The guest on the radio show explained Islamic insurance to be a pool where everyone come together and mutually assist each other and share the risk among themselves, and at the end of the year, whatever is left in the pool after paying claim to those that suffered loss, the remaining amount is shared to those who did not offer claim.
“Before we share the money, there is an amount that is normally deducted, 0.25 percent of that amount goes to the less privileged, those people are not doing anything, and they are not doing insurance. For example, you can go to the hospitals and buy detergent, buy all those necessary materials for those in the hospital from that amount and give it to them. Or we can go to the prison and buy food items for them. Those people are not in insurance but are part of the people that will enjoy the benefit of Takaful that is why we say Takaful is for all” Adekunle stressed.
He however said the program does not target only Muslims, although it was initially designed for them alone, but as at today, everyone is benefiting regardless if they are Muslim or not.
“Benefits cut across all religions; Jews, Christians and Muslims, because most of them believe that we cannot give loan or take loan, the benefit in Takaful is more than you belonging to a particular religion. You will get money whether or not you suffer claim that is the question policy holders are asking,” Adekunle said on the show
He said it has gone beyond Islam and religion, as it has been accepted in all the Christian countries like the U.K, the chartered insurance institute of London have also introduced Takaful in their syllabus and it is also accepted in many other African countries like Kenya and Zambia.
According to the guest, today, Takaful has a growth rate of 40 percent in the world and conventional insurance is still growing less than 5 percent or 3 percent.
When Adekunle was asked what the uptake has been like for the product and how they are educating the potential customers about the product so as to get more people into the financial service he said;
“This Takaful came on board in Nigeria; the plan is to penetrate all low income earners, people in the villages, rural areas. We designed a program that will go as low as 5000 naira for anybody no matter what your income is, you will be able to afford it. We have also tried to do major sensitization, we are not focused on cities that have developed .we have been going to cities in kebbi state, Jigawa and Nassarawa, to sensitize them to know the benefit of Takaful. We have discussed medical Takaful, family Takaful,”
On the constraints encountered by the insurance company and the measures put in place to surmount them, Adekunle explained that;
“The challenge we have been getting from rural areas is that most of them do not believe that such a package exists. Once we explain to them, they always ask if we are sure of what we are saying. At the end of the day, we let them know that we are not here for fun, we are here to tell them what other countries have been enjoying. So, Takaful maybe new in Nigeria, but it is not new in the world and we also communicate with them with the language they can understand.
Our jingles are in different languages, in Hausa, Yoruba and once it is played to them, they will understand better what they are opting for.We also try to come down to their level so they will understand that Takaful is not coming here to collect their money and at the end of the day they go with their money,” he said.
One of BusinessDay’s analysts asked the guest how they are going to make people especially the northern women buy into the non interest banking. The branch manager replied by saying;
“We all know that interest has not been good thing to anybody either to an individual, corporate organization and to a country as a whole. We are not taking any interest but we can help you finance what you want to do. Non interest banking aims to help those poor people especially women struggling with their businesses, so they can finance them,” he explained.
He went further to give an example with the Indomie brand “if you are into Indomie and you do not have capital, what they can do is buy that Indomie for you and they will become the owner of that Indomie and sell it for you. So, you are paying back the money they sell it for you and not the interest. Before they will sell it to you, they must have looked at factors like profit margin. If you buy something of N1 million, it can be sold back to you for N1.2million. what the person will pay back is N1million in return , we are just trying to remove them from the level they are to another level”.
The manager of the Islamic Insurance company was optimistic while speaking on the radio progam;
“We have a very good potential and there is no doubt in me about it. Actually, if you look at the world in terms of insurance today, especially in Nigeria, many people are tired of paying their premium every year and they are not getting anything back. Some people will line up before they can get their claim.
“Some people will even have to go to the court before they can get their claim. But this Islamic insurance which is transparent and fair to the society. What we are saying, by the time we do like 2-5 years and by the time we declare surplus to the members of the public, we just tell you that, sir, this is your surplus for this year and you will just discover that, all the years you have been doing insurance, this is what you have been losing,” he added.
In his final remarks, Adekunle of Jaiz Takaful Insurance urged the entire public to choose any of the Islamic insurance platforms because it is sustainable, fair and efficient.
The media partner of this radio show remains Bella Naija.
