The Islamic financing in the country has grown to about three percent of the country’s total financial market with an estimated value of $3.8 billion.

Commissioner for Insurance, Mr. Olusegun Ayo Omosehin, who spoke at the second edition of the African Takaful and Non-Interest (Islamic) Finance Conference, said the expansion reflected a robust and rising demand for Shariah-compliant financial services.

Mr. Omosehin said Sukuk bonds account for 59.3 percent of the market share, non-interest banks 39.8 percent, and Islamic funds and Takaful insurance 0.9 percent.

The industry is made up of four non-interest banks, five Takaful companies, 15 microfinance institutions, and 10 non-bank financial institutions.

In collaboration with other regulators, the National Insurance Commission (NAICOM) Omosehin said is committed to supporting the sector’s growth by fostering more Shariah-compliant investment options for Takaful and other non-interest financial institutions.

Mr. Omosehin noted Takaful’s unique position in Islamic finance, explaining that it is a form of insurance grounded in cooperation and shared responsibility, distinguishing it from conventional insurance models that typically involve risk transfer and interest.

“Takaful enables individuals to contribute to a shared fund that assists members in need, reinforcing community solidarity. This approach offers an alternative that aligns with the ethical principles of Islamic finance,” he said.

Since the release of Takaful Operational Guidelines in 2013, NAICOM has licensed five Takaful operators, a sector which now represents around 1-2 percent of Nigeria’s insurance market.

The future of Takaful he said looks promising, with an average annual growth rate of over 34 percent in contributions over the past four years.

Omosehin added that the Commission is supporting this growth through various initiatives, including the adoption of a risk-based capital system that lowers capital requirements for Takaful operators and facilitates market entry for new players.

NAICOM has also implemented the Market Conduct and Enterprise Risk Management Guidelines for Takaful and Retakaful operators, ensuring best practices and effective risk management within the industry. Furthermore, NAICOM has conducted public sensitization workshops to raise awareness about Takaful and its benefits.

The Commission collaborates with international standard-setting bodies, including the Islamic Financial Services Board and the Accounting and Auditing Organization for Islamic Financial Institutions, to provide regulatory guidelines, technical training, and support to the industry.

Through the principles of risk mitigation, social justice, and sustainable development, Islamic finance and Takaful contribute to resilience, inclusivity, and the pursuit of long-term, ethical growth.