Non-Interest Capital Market Global Size Hits $3.25 Trillion In 2022 — SEC

… set to host 1st International Forum on NICM, Jointly With IFSB

The Securities and Exchange Commission (SEC), has disclosed that, the Non-Interest Capital Market (NICM) sector has witnessed a remarkable growth in recent years, reaching a global size of $3.25 trillion in 2022.

The Commission said, the main drivers of this growth include the increasing demand for ethical and socially responsible finance, diversification of funding sources and risk management tools, development of enabling regulatory and legal.

To this end, SEC in a bid to tackle the challenges hampering further development of the Non-Interest Capital Market (NICM) in Nigeria, in conjunction with the Islamic Financial Services Board (IFSB), an international standard-setting body- with a vested interest in ensuring the soundness and stability of the global Islamic financial services industry, is set to convene a 2-Day High-Level International Forum on Non-Interest (Islamic) Capital Market.

The SEC in a statement, said that the objective of the forum is to bring all critical stakeholders together to analyse issues and challenges confronting the sector and profer solutions for the overall development of the Nigerian economy.

The discussion will revolve around issues such as; inadequate capacity within the industry, lack of awareness and education, paucity of human capital and expertise, limited availability of Sharia-compliant products, including short-term Shariah-compliant liquidity instruments, the harmonization of regulatory and supervisory standards, and the integration of NICM with the conventional financial system amongst others.

Whilst stating that the Non-Interest Capital Market (NICM) in Nigeria has evolved and is progressively becoming an important segment of the nation’s financial market, the Commission said NICM provides a veritable avenue for mobilizing medium to long-term investment in an ethical and Shariah-compliant manner through wide range of products/services offered such as, Sukuk (Islamic bonds), Islamic Mutual Funds, Islamic REITs, Islamic Crowdfunding and Islamic Fintech, etc. that cater for the needs and preferences of both ethical and conventional investors.

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“NICM sector has witnessed remarkable growth in recent years, reaching a global size of $3.25 trillion in 2022, adding that the main drivers of this growth include the increasing demand for ethical and socially responsible finance, diversification of funding sources and risk management tools, development of enabling regulatory and legal frameworks, and the innovation and standardization of NICM products and practices.

The SEC said, “Nigeria, as the most populous country in Africa and home to the largest Muslim population in the continent, has a huge potential to develop its NICM sector and benefit from its opportunities. Nigeria has taken several steps to promote NICM; from the registration of the first Islamic Fund in 2008, to the issuance of the first Sub-National Sukuk in 2013 and the subsequent issuance of the country’s first Sovereign Sukuk in 2017.

To date, the country has witnessed further sovereign and corporate Sukuk issuances as well as the registration of more ethical and Shariah-compliant funds.

Dr. Bello Lawal Danbatta, Secretary-General of IFSB, Commended the SEC Nigeria and the Government: “We applaud the steadfast dedication to cultivating a resilient non-interest capital market in Nigeria. The comprehensive initiatives including the upcoming high-level international forum with the IFSB and market players underscore the distinct commitment to fostering industry collaborations, facilitating insightful discussions, and promoting knowledge sharing. We look forward to initiating this continuous, collective effort propelling market development, promising not just economic strength but also ensuring enduring and inclusive prosperity for the people.

”The forum will also feature two side events; the forum on non interest capital market and the IFSB’s 5th Innovation Forum to be held for the first time in the region. In addition, there will be an IFSB Member and Industry Engagement Session. The high-level forum is expected to strengthen cooperation and knowledge-sharing among market players and policy makers around the world especially in the African region to harmonise and coordinate ongoing regional, regulatory and policy initiatives.
This will address sustainability and climate-related risks, opportunities in the Non-interest (Islamic) capital markets.-end-

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