Description
ABSTRACT
An Overview of Takaful in Nigeria
Oluwaseyi Oso* & Khadijah Abdulwahab**
Takaful, also known as Islamic insurance, is an inclusive system that provides an alternative to conventional insurance for risk management. It emphasises mutual risk-sharing and ethical investment, excluding interest, gambling, and uncertainty. Notably, Takaful is not restricted to Muslims – it is open to Muslims and non-Muslims seeking ethical financial services. The entities that offer Takaful products, such as family Takaful and General Takaful, are known as Takaful insurance companies.
The article provides an overview of Takaful, outlining its key features and models. The article also analyses the similarities and differences between Takaful and conventional insurance and Takaful and mutual insurance. Additionally, the article gives an insight into the regulation of Takaful under Nigerian law, explicitly reviewing the primary regulation on Takaful in Nigeria, the National Insurance Commission’s Operational Guidelines for Takaful-Insurance Operators, 2013, primarily as it governs and regulates the administration of the Takaful operator. The article concludes by highlighting Takaful’s appeal as an alternative to conventional insurance to both Muslims and non-Muslims interested in ethical financial products.
Keywords: Insurance, Takaful, Islamic Insurance, Non-Interest Finance, Shariah-compliant, Risk-Sharing.
INTRODUCTION
Fisher and Taylor praised Takaful for providing ‘superior alternatives’ to insurance that ‘reinvigorates human capital, emphasises personal dignity, community self-help, and economic self-development.’1
As reported by Research and Markets,2 As reported by Research and Markets, the global Takaful market size reached $33,600,000,000 in 2023 and is estimated to be at $74,000,000,000 by 2032. Despite Nigeria’s relatively low use of non-interest finance, there is significant market potential to be tapped. This presents an optimistic outlook for the future of Takaful in Nigeria.
Takaful, as a type of non-interest finance, offers a platform for investment by corporate and natural entities seeking ethical financial services, whether or not they are Muslims. This article provides an overview of Takaful and its regulation in Nigeria.
* LL.B (OAU, Ife), BL, ACIArb (UK)
**LL.B (University of Ilorin), BL
- Omar Fisher and Dawood Y. Taylor (2000). Prospects for Evolution of Takaful in the 21st Century: Origins of Takaful.
- Research and Markets ‘Takaful Market Report by Product Type (Life/Family Takaful, General Takaful), and Region 2024-2032‘ accessed 30 October 2024
Reviews
There are no reviews yet.