Could you provide a brief journey of how you arrived where you are today?
One philosophy I always had was to never tie myself into a long-term commitment with anything that was forbidden in my religion. Nigeria has over 70 million Muslims, many of whom are completely unbanked. I started researching the field of Islamic finance and in 1999, I enrolled in a finance program at Durham University, UK specializing in Islamic finance. My project was an empirical study of the impact of Islamically screened equities against the complete universe using the Dow Jones Islamic Index against the Dow Jones Index. My findings were startling. Not only did the ‘Islamic Index’ not suffer inferior returns for the period studied, the Islamic Index outperformed. I subsequently worked in BNP Paribas in London, and later headed the Islamic finance desk of UBS Warburg in London where I gained invaluable experience. In 2004, I returned to Nigeria and established Lotus Capital as the first Islamic financial institution in the country. Lotus Capital is registered with the Nigerian Securities and Exchange Commission as fund managers, corporate investment advisors and issuing house. Our mission is to provide alternative ethical investment solutions.
What does your role involve?
As the founder, CEO and chief investment officer, my role encompasses strategic direction, portfolio management and business development.
What is your greatest achievement to date?
The launching of the first Shariah compliant mutual fund in Nigeria — ‘Lotus Capital Halal Investment Fund,’ popularly called the ‘Halal Fund’. It was oversubscribed to the tune of 278% with over 20,000 initial subscribers and was the first Shariah compliant fund to be listed on the memorandum list of the Nigeria Stock Exchange. More recently, Lotus Capital structured and offered the first Sukuk in Nigeria. This was a successful private offering of NGN1 billion (US$7 million) based on an Istisnah contract. It is called the Lotus Capital Sukuk Al-Istisna.
Which of your products / services deliver the best results?
Different products serve different investment needs such as our Haj Plan, short-term Hisab (savings account), Halal Fund for long-term investors, Sukuk Al Istisnah for regular income and safety and many diverse investment objectives.
What are the strengths of your business?
Lotus Capital is very well capitalized with good governance structures. We have a board of directors who are experienced in their chosen fields. We also have a sound Shariah advisory board led by Professor Dr Monzer Kahf — an industry expert, and a stable and committed management team.
What are the factors contributing to the success of your company?
A real passion for what we do coupled with extensive knowledge and practical experience gained over the years. We have earned the trust of our clients and Lotus Capital has become synonymous with Islamic finance in Nigeria. We also regularly interact with the financial regulators to partner on establishing a sound regulatory framework for Islamic finance in the country.
What are the obstacles faced in running your business today?
All the obstacles faced by pioneers. Some of the challenges include the lack of supporting Islamic finance institutions such as banks and Takaful providers. Most importantly is the challenge posed by the unavailability of Shariah compliant liquidity instruments.
Where do you see the Islamic finance industry in, say, the next five years or so?
In Nigeria, the central bank has recently released the guidelines for ‘non-interest’ banking which we expect to stimulate activity in the sector. I also see Lotus Capital and others issuing sovereign Sukuk and Islamic bonds as a matter of course. I would expect that Islamic finance would be familiar, understood and widely available in five years.
Name one thing you would like to see change in the world of Islamic finance.
At Lotus Capital, we pride ourselves on not just following the letter of Shariah law but also the spirit of it. We would like to see global cooperation to create real Islamic finance short-term liquidity instruments (such as less of Commodity Murabahah and Tawarruq) and more tradable Sukuk.