While it might seem as though there are no banks offering no-interest loans in Nigeria, the fact is there are banks offering interest-free loans. Most of these banks operate under Islamic banking principles. An interest-free loan means that you will only be paying back the money you borrowed from the lending organization. In most cases, some of these loans require you to have a very strong credit record. This article covers all that you need to know about interest-free loans in Nigeria.
About Islamic Banking (No-Interest Banking)
Islamic banking, which is also called sharia-compliant finance, refers to banking activities that find their root in the laws of sharia. The main fundamental principles of this type of banking are the prohibition of interest collection from customers and sharing of profit and loss. Sharia frowns against any form of speculation or gambling. In addition to this, it also prohibits the collection of interest on loans. This condition makes Islamic Banking dent from the conventional Banking system.
Where can I get Interest-Free Loans in Nigeria?
Jaiz Bank:
Jaiz bank is a financial organization that operates and is compliant to Islamic banking principles. This bank is a public and national quoted organization with well above 26,000 shareholders. The goal of Jaiz Bank is to be the distinct leader in the areas of ethical Banking in the Sub-Saharan region.
Furthermore, as we expect of a bank operating under Islamic principles, Jaiz Bank offers Non-interest loans to its clients. These loan options are generally available to all and sundry at zero interest rate, but, definitely with a loan tenor. That is a repayment period. Some of these loan options are:
Murabaha ( Household Appliance)
The Household appliance loan is a consumer product loan. If you are looking to purchase some household essentials, this loan option got you covered. This could include a Television set, Refrigerator, laptop computer, etc. The repayment of this loan is for 24 months.
Project Financing:
If you have a big project but don’t have the capital strength to do it, Jaiz Bank got you covered. They will agree to complete the project for you and sell it to you at a cost-plus profit margin.
Other loan options available with Jaiz Bank include Lease to own and Working capital Financing. To learn more about Jaiz Bank and its loan offerings, kindly visit their official website on www.jaizbankplc.com.
TAJ Bank
TAJ Bank, just like Jaiz Bank, basically operates under the sharia financial principle. This means they do not give or receive interest. They operate 3 branches in Nigeria and also provide regular services, just like conventional banks. This includes ATM services, online and mobile transactions, etc. They have their head office in Abuja and a further branch in Kano. Some of their loan offerings include:
Cost Plus Working Capital (Murabaha):
They design this loan option to help you finance the purchase of raw materials and assets you desire. All you have to do is the source for the asset or raw material, once you do, they will pay the supplier of the asset. After this, TAJ bank expects you to repay at a date you both agree on a cost-plus profit basis.
Bonds and Guarantees: (Kafalah)
TAJ bank generally designed this loan option for organizations that need to give their trading partner or clients a guarantee.
Cost Plus SME Finance:
This finance product helps to meet the funding requirements of Small and medium-sized enterprises. If you fall into this category, then this loan option is for you. TAJ bank put people in this category into cooperative clusters and fund their capital needs.
Conclusion:
In Nigeria today, only banks operating under Islamic banking principles are the only ones offering no-interest loans. You can visit their official website to learn more about their loan offerings or visit any of their branches near you.