THE TERMINUS MARKET REBUILD BY JAIZ BANK PLC. AND THE NEEDLESS CONTROVERSY~~~
The recent controversy around funding the redevelopment of the Jos main market by Jaiz Bank Plc. to the tune of 10 billion is unnessary and diversionary.
Jaiz Bank Plc. Is an Islamic bank committed to doing business differently, underpinned by a win-win principles of equity, fairness and socioeconomic justice, among parties in a financial transaction.
Following the Islamic financial principles, it is also committed to national development objectives. Because it is non-interest bank, it prefers to deal with the real economy rather than just pure lending based on interest. Hence, it is directly involved in developing markets across the country.
No fund diversion, there is a timeline for delivery. Every party is clear about the terms of the contract. The profits that accrues to the bank are disclosed at the commencement of the contract, and every party’s benefits are negotiated transparently. Below are two of the Jaiz Bank’s ongoing multi-billion Naira involvement in project financing.
KANO PHARMA MARKET: KANO ECONOMIC CITY
Jaiz Bank Plc. is presently in partnership with traders in Kano and a major property developer, Brain and Hammers to build the first of its kind, world class, multi-billion Naira pharmaceuticals only market in Kano within the Kano Economic City.
The new market, which is to be called Coordinated Wholesale Centre (CWC), is a tripartite innovation of the bank, Kano State government and traders, with the hope of curbing the supply and distribution of fake and counterfeit drugs in the state.
It is to provide a permanent seat for all pharmaceutical traders by providing the cold room for their storage.
There is also the presence of all relevant law enforcement agencies including NDLEA, NAFDAC, police and Pharmaceutical Society of Nigeria (PSN), who will oversee activities in the market.
Jaiz Bank Plc. also hopes to make the resources available to start even the production of these drugs in the country.
So far, close to 700 shops have been completed, and more are on the way.
MINNA CITY CENTRE
Likewise, Jaiz Bank Plc. has committed about 4 billion Naira towards the rebuilding of Minna City Centre, in partnerships with Niger State government.
Jaiz Bank Plc. is to spend the amount on the construction of a shopping complex, modern underground car park, modern filling station, warehouses, corner shops, restaurants and recreation centre among others at the Minna City Centre.
Jaiz Bank will benefit, so will Niger State government. But the biggest beneficiaries will be Minna residents and other indigenes of Niger whose living standards will be enhanced by that development.
The question is why the unnecessary controversy over Jaiz Babk involvement with rebuilding the Jos main market that has been wasting away for over two decades?
A NOTE ON NON-INTEREST PROJECT FINANCING
Jaiz Bank Plc. utilizes a non-interest financing structure called Istisna.
WHAT IS ISTISNA?
Istisna is widely used by Islamic banks and financial institutions to finance the construction of real estate such as buildings, warehouses, showrooms, shopping malls, residential towers and villas, as well as manufacturing activities involved in the construction of like aircrafts, ships, machines and equipment, etc
HOW IT WORKS
Istisna is generally a long-term sales contract between a customer and the bank, whereby Jaiz Bank agrees to construct and deliver an asset at a pre-determined future time, at an agreed price. The bank takes care of paying the contracted developer or builder in full or at specific stages of project completion. The client then pays the bank as per agreed payment plan. The customer then pays the bank either in installments, at delivery or after project completion.
The key advantage of an istisna contract is that it can provide flexibility to the customer, where payments can be made in instalments linked to project completion, at delivery or after project completion.