A senior banking executive has revealed that non-interest financial institutions hold a marginal share of Nigeria's vast banking landscape, highlighting significant growth challenges despite regulatory backing.
Korede Demola-Adeniyi, the Executive Director (South) of The Alternative Bank (AltBank), disclosed that non-interest banks constitute only 1.7 per cent of the total banking system. She shared this insight, based on 2024 data, during an appearance on the Islamic Finance Viewpoint programme.
Structural Hurdles and Public Misconceptions
Demola-Adeniyi identified several core issues stifling the sector's expansion. She pointed to weak public awareness, a lack of innovative product offerings, and deep-seated misunderstandings about what non-interest banking represents.
A major barrier, according to her, is the widespread perception that it is exclusively "faith-based banking." She stressed that the model is, in fact, a broader ethical financial framework built on principles of transparency, risk-sharing, and promoting financial inclusion for all segments of society.
"Non-interest banking is not niche banking. It is ethical banking designed for inclusion. We are not selling to Muslims alone," Demola-Adeniyi clarified. "We are offering a value proposition that works for everyone."
Modest Growth and Future Prospects
The executive acknowledged that while the sector experienced some growth in 2025, its footprint remains negligible within Nigeria's predominantly interest-based financial ecosystem.
Looking ahead, she expressed optimism for a more prominent role. This confidence is anchored in expectations of increased capital requirements and clearer regulations set to shape the industry in the coming year. Demola-Adeniyi believes these developments will empower non-interest banks to contribute more substantially to the nation's economic transformation.
AltBank's 2026 Strategic Focus
Outlining her institution's plan, Demola-Adeniyi said AltBank's growth strategy for 2026 will deliberately target sectors with high developmental impact. The bank intends to prioritise financing in key areas including:
- Healthcare
- Education
- Agriculture
- Renewable Energy
- Transportation
This focused approach aims to align the bank's ethical finance model with tangible national development goals, potentially driving greater acceptance and market share for the non-interest banking model in Nigeria.
