NBA Stabilization Fund And Access To Finance Scheme For Lawyers: Financial Inclusion Or Exclusion?

By Kazeem A. Oyinwola

The Nigerian Bar Association (NBA) under the leadership of Mr. Olumide Akpata took the courage to implement the initiative approved by the National Executive Council (NEC) of the NBA for the establishment of the NBA Stabilization Fund. It is understood from NBA’s correspondence to its members that the NEC approved the establishment of the fund at its meeting held on 16^th December, 2021. This initiative also marked the commencement of the NBA Access to Finance Scheme for lawyers under which eligible lawyers may access loan from any of the participating banks to the tune of N2m at an interest rate of 9.5% per annum for up to a tenor of 3 years. This loan can be utilized for the operational needs or as working capital for lawyers who may require it. While the Stabilization Fund will be invested in a range of assets/investments with a view to generating returns for the Association, it also provides the cash-backed collateral base for the Access to Finance Scheme for Lawyers. This initiative will, in my view, not only defy the inkling tradition of profligate, it will also imbue the saving culture and prudent investment of the fund belonging to the Association.   

The participating banks for the purpose of Access to Finance Scheme for Lawyers are First Bank of Nigeria and Access Bank Plc and arrangement is in place between the NBA and the participating banks as regards the method of enforcement in the event of default. It is therefore expected that either the NBA or its Finance Committee will provide further update/framework regarding the Scheme. But before the NBA or its Committee does so, it is imperative that attention is drawn to the seemingly inadvertent exclusion of some members of the NBA in the scheme as it is presently conceived.

There is a vital omission central to theme of the scheme which I suppose ought to have been considered at the early stage of the scheme. When the scheme is considered as a whole, one may be convinced to suppose that the omission was, conceivably, inadvertent. Or how does one begin to imagine that a laudable initiative of this nature would also, in its design, result in financial exclusion of certain category of lawyers who also constitute members of the NBA? There is no doubt that the Access to Finance Scheme for Lawyers, as it is presently designed, has, in principle, technically excluded the Muslim lawyers because the scheme is only interest-based. This exclusion of the Muslim lawyers is mainly due to their faith and religious beliefs, because Islam prohibits Riba (interest). The scheme itself is wholly interest-based (Riba) and interest-based finance is also what is widely practiced in the participating banks chosen by the NBA to administer the scheme. In this case, a Muslim lawyer who is also a member of the NBA will be unable to access the fund because it is wholly interest-based meanwhile his faith and religion prohibit him from interest-based finance. Thus, he can be said to have been financially excluded in this regards.

Financial inclusion is, indisputably, a catalyst for economic development. It reduces poverty, generates employment, creates wealth and improves welfare and general standard of living. Thus, the leadership of the NBA cannot afford to ignore this concern. Since Muslim lawyers cannot lawfully access fund under the scheme as presently constituted, it is only fair and just for the NBA to integrate non-interest finance into the scheme so that the diversity of its members in this regards can be accommodated. NBA comprises of diverse members cutting across varied cultures and religions. Diversity, it is said, is measurable but inclusion is what makes it work. Therefore, as Mary Parker Follet posited, ‘differences must be integrated, not annihilated, not absorbed.’

The scheme should be designed to accommodate both interest and non-interest finance for members. There are non-interest finance products that can be incorporated into the scheme. By this, members of the NBA can lawfully choose anyone that best suits them. This will not only be accommodating of all members irrespective of faith or belief, it will also further the goal of the country in striving to reduce the rate of financial exclusion. Diversity and inclusion are undoubtedly the real impetus for creativity, and these two key concepts must remain at the center of what we do as an Association of lawyers committed to promoting the rule of law. Thus, perhaps, when the NBA or its Finance Committee eventually releases further correspondence/framework regarding the Scheme, then we shall know whether the initiative is geared towards achieving inclusion or financial exclusion!

Kazeem A. Oyinwola writes from Abuja. He can be contacted via email: kazdan01@gmail.com