Addressing Nigeria's growing unemployment crisis requires expanding access to Islamic finance to support youth-led businesses, agriculture, and other vital economic sectors, according to Abdulmajeed Alaro, a professor of Islamic finance and law. Speaking at the Islamic Finance Youth Summit held at the Ilorin Innovation Hub in Kwara State, the academic argued that alternative financing models can help young entrepreneurs overcome the hurdles of traditional lending.
Organised by NEXTIF under the theme “Ethical Innovation, Ethical Generation: Rethinking Finance and Innovation,” the event gathered industry leaders and youths to discuss prospects in ethical finance and technology.
Why is youth unemployment tied to finance?
Alaro noted that joblessness in Nigeria is worsened by the inability of skilled young people to secure capital for enterprise development. He pointed to obstacles faced by tech-savvy graduates, small-scale farmers, female entrepreneurs, and business owners who possess viable ideas but lack traditional collateral.
“Consider the young entrepreneur with a bright business idea but no collateral, the smallholder farmer who needs financing before the planting season, the woman who operates a growing enterprise but cannot access affordable capital, and the graduate who possesses digital skills and creative energy but lacks the resources to turn an idea into a viable business,” Alaro stated.
He challenged youths to develop technology-driven solutions bridging the gap between businesses and ethical funding, highlighting financial technology, Sharia-compliant digital platforms, agricultural funding, and blockchain systems as viable areas.
What role should financial institutions play?
Alaro cautioned that the success of Islamic finance must be judged by its ability to resolve tangible economic difficulties rather than mere compliance with legal principles. He urged institutions to demonstrate social impact through job creation and wealth distribution, directing resources toward agriculture, education, healthcare, and affordable housing rather than focusing solely on commercial returns.
Supporting this view, NEXTIF co-founder Yusuf Abdulwasiu explained that profit-and-loss sharing models connect capital directly to productive ventures. He urged the Federal Government to promote public awareness and integrate ethical financing into school curricula.
Co-convener Safiyyah Isyaku Umar highlighted career paths in Sharia advisory, investment management, and consultancy, while calling on regulators like the Central Bank of Nigeria to streamline approval processes for Islamic institutions.
Dr Muhammad Mustapha Ishaq, Managing Director of the International Ethical Finance Academy, noted that while Nigeria has progressed in the sector, geographical concentration in major cities limits rural access. He advocated for policy adjustments, improved liquidity management, and greater use of Sukuk bonds for infrastructure. Meanwhile, participant Abdulbasit Umar Balogun noted that public misconceptions regarding the exclusivity of Islamic finance to Muslims continue to hinder its broader adoption.