Islamic financial institution, Lotus Bank, is seeking a $1 billion facility from the Islamic Development Bank (IDB) to back its bid to provide funds to expand its operations and tackle wider economic challenges in Nigeria.
This was disclosed by Mrs Kafilat Araoye, the chief executive of the Lagos-based non-interest bank, at the 2024 IsDB Group Annual Meetings in Riyadh, Saudi Arabia’s commercial capital.
According to the CEO, the capital support funding facility could help spur growth in the key sectors of the economy.
The facility could boost foreign exchange inflow into Nigeria, where liquidity is running dry as the government strives to attract investments abroad and the official foreign exchange market struggles to get Dollar supplies from the Central Bank of Nigeria (CBN).
“It will put infrastructure and businesses in place, and it will reduce the pressure on the Naira because we will generate foreign exchange from some of the things we will use the money for. What we require is monitoring,” she said.
IsDB, a multilateral development finance bank, comprises 57 shareholding member countries, including Nigeria, and boasts $182 billion in total approvals to finance over 12,000 development projects since its inception in 1975.
“When you invest money in Sukuk fund, all you are saying is that you are partnering in the project, which is monitored from beginning to the end and what the money will be used for. So, the fund is helping us to have infrastructure that we didn’t have in Nigeria before,” added the Lotus Bank CEO.
She stated that the Islamic-based bank is aiming to build trust with the IsDB to identify bankable projects that could be funded to spur economic development in the country.
“The Islamic Development Bank is into oil and gas. We have lithium; we need to start mining, lithium and selling. In terms of the capital funding support, there are three broad areas,” she said.
“Then, there is also the side that has to do with reducing the pressure on foreign exchange, to generate foreign exchange, the export side of the businesses (export mining) and commodity generally. Nigeria needs investment in transportation including rail lines and roads to ease economic activities within the country, she added.