BoI Launches Non-Interest Banking to Support MSMEs

The Bank of Industry (BoI) has received approval from the Central Bank of Nigeria (CBN) to operate a non-interest banking window, expanding its ability to provide ethical, asset-backed financing to businesses.

The move is expected to broaden access to credit for micro, small, and medium-sized enterprises (MSMEs), manufacturers, and agribusinesses that avoid conventional interest-based loans.

It also aligns with Nigeria’s push to deepen financial inclusion and diversify funding sources.

Non-interest banking, which complies with Islamic finance principles and other ethical frameworks, prohibits interest payments and instead relies on structures tied to tangible assets and shared risk.

BoI said the approval “marks a significant milestone in the Bank’s growth and long-term development agenda,” reflecting regulatory confidence in its approach to responsible financing.

Managing Director and CEO Olasupo Olusi described the licence as transformative.

“This licence marks a pivotal moment in the bank’s journey of transforming Nigeria’s industrial sector. With this licence we can reach a new category of borrowers who before now could not be served,” he said.

Nigeria already has one of Africa’s largest non-interest finance markets, driven by sovereign sukuk issuances and a growing number of non-interest banks.

Demand has been fuelled by faith-based investors, ethical finance advocates, and interest in asset-backed instruments amid global volatility.

By entering the space, BoI aims to tap these pools of capital while expanding access to credit for enterprises previously excluded due to religious or ethical considerations.

The bank said the initiative would enable “ethically motivated and faith-sensitive enterprises” to participate more confidently in the formal economy.

Officials added that non-interest structures better align financing with productive activity, since funds are tied to identifiable assets or projects.

BoI said the new window would reinforce its mandate as a development finance institution, supporting inclusive growth and job creation.