Stakeholders in Nigeria’s financial sector have identified Islamic and ethical finance as a potential alternative funding channel for small and medium-scale enterprises (SMEs), saying asset-backed and risk-sharing financing could help businesses overcome persistent access-to-capital challenges.
They spoke in Abuja on Tuesday at a press conference by OpenSpace on Islamic and ethical finance, where they highlighted the potential of non-interest finance to support business expansion, asset acquisition, investment and broader financial inclusion.
Shariah Adviser to OpenSpace Financial Services, Zubair Mughal, said Islamic finance could provide SMEs with financing linked directly to productive economic activities rather than purely financial transactions.
He said the approach could help businesses secure funds for equipment, inventory, vehicles and other productive assets required for expansion.
‘Islamic/ethical finance can help bridge this gap by offering asset-backed banking, Sukuk, Takaful, microfinance, leasing, partnership-based financing and fintech-enabled solutions that are connected to real economic activity,’ Mughal said.
Industry figures cited at the event showed that Nigeria’s non-interest finance industry reached N5.77 trillion in 2025, while sovereign Sukuk accounted for N1.19 trillion. EnterpriseNGR was identified as the source of the N5.77 trillion industry figure.
Mughal said the figures demonstrated the growing scale of the sector and the opportunity to develop more financing instruments targeted at businesses and Nigerians who remain underserved by conventional financial services.
He stressed that Islamic finance should not be viewed as a financing system exclusively for Muslims, noting that principles of fairness, transparency, responsible investment and risk-sharing could appeal to Nigerians across religious and social backgrounds.
Also speaking, the Chief Executive Officer of OpenSpace Financial Services, Titus Adakole Ike, said genuine financial inclusion should go beyond opening bank accounts or providing access to digital platforms.
He said inclusion should enable people and businesses to participate more fully in economic life by providing access to productive capital, asset ownership and opportunities to build wealth.
Ike said SMEs and entrepreneurs requiring productive equipment and expansion capital remained among those who could benefit from a broader ethical finance ecosystem.
He argued that the next phase of financial innovation should not be limited to digitising existing financial services but should also address the barriers preventing businesses and individuals from accessing capital and investment opportunities.
Mughal said technology could play an important role in expanding access to Islamic finance by reducing costs, simplifying processes and making financing available to a wider pool of businesses and individuals.
He also identified Sukuk as an important instrument for mobilising long-term capital, particularly for infrastructure and other productive investments.
However, industry data show that Nigeria’s non-interest capital market remains heavily concentrated in sovereign Sukuk, with corporate Sukuk still largely untapped.
Mughal, therefore, called for stronger regulatory support, effective Shariah governance, investor education, professional capacity building and greater awareness to deepen the market.