ISLAMIC BANKING AND FINANCE: A TOOL TO ENHANCE FINANCIAL PRESENCE AND SUSTAINABLE DEVELOPMENT IN CONTEMPORARY NIGERIA

Abstract

This study intends to bring in to limelight the roles of Islamic Bank and Finance to Sustainable Development in Nigeria. In doing so, the paper dwells on the features of Islamic Banking and financial system, traces its origin, discusses its benefits, enumerates its challenges, highlights its expected contributions to sustainable development in Nigeria and provides recommendations towards its challenges. Generally, expository methodology was used for the study while historical approach was resorted to where necessary. The paper revealed that, Islamic banking and finance is of related purpose to other forms of banking except that it operates using Shar'ia rules. One basis principle of Islamic banking and Finance is the sharing of profit and loss and the prohibition of the rate of interest. It also revealed that, the literature of Islamic Banking and Finance is replete with several benefits of adopting the Islamic banking and Finance model as a viable alternative to conventional finance. The paper also noted that, there are common misconceptions about Islamic Bank and Finance such which can hindering is rapid development such as: is only for Muslims, is a camouflage for terrorism financing, is only charitable Islamic Banking and finance and is Islam's World domination Islamization plan. It is also provided possible suggestions to its expected challenges such as: low Western patronage, inefficient support from Central Bank, equity capital/cash requirements and orientation challenge, societal belief and socio-political environment, manpower and awareness. It finally exhibited how it can contribute to sustainable development in Nigeria.