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West Africa: Lotus Capital's MD Advocates Ethical Investments for West Africa
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Vanguard (Lagos)
22 November 2007
Posted to the web 22 November 2007
Lagos
Lotus Capital, a pioneer ethical investment management company in Nigeria has called for the expansion of the practice to other West African countries.
This was disclosed by Mrs. Hajara Adeola, the Managing Director of the company in the paper she delivered at the Africa Islamic Finance Conference in Johannesburg, South Africa recently.
Speaking at the conference, Adeola stated that Islamic finance is becoming a "must have" alternative asset class, adding that the demand for Islamic financial products by investors has led both Islamic and non-Islamic economies to show keen interest in Islamic finance.
She observed that investors are eager for diversification and good returns and financial institutions are driven to develop new products and services as well as demonstrate business acumen that delivers value.
Narrowing it down to the West African sub-region, the MD of Lotus Capital said, "With a combined GDP of $139 billion and a total regional export which include an intra regional exports standing at $68.4billion and regional trade surplus valued at $17, the region which grows at a combined weighted average rate of 5.0 per cent is not to be ignored."
Speaking further, Adeola said, "Globally, financial institutions applying Islamic Finance are over 300 and the combined funds managed by them is estimated at $250 billion. It is one of the fastest growing sub-sectors at an annual growth rate of 15-20 per cent. It is time some of these funds are made available to genuine business in the West African sub-region."
When asked if investments based on Islamic principles are for Muslims only, she promptly responded saying, "So many people have erroneous impressions about Islamic Finance; one of them is what you just asked. I have heard people say Islamic banking has limited investment options, low return on invest-ments and limited transaction structures. Others even say we have limited investor/market interests. All these assumptions are not correct. Just as conventional finance is open to all, so is Islamic finance but the major difference is that we are guided by Islamic tenets."
In conclusion, Adeola pointed out that Dow Jones Citigroup Islamic bond (SUKUK) introduced in September 2005 had a return of 5.52per cent in 2006, exceeding the 4.56 per cent return for Citigroup USBIG Corporate index. This confirms that ethical investments can out-perform non-ethical investments and has a wide range of investment options.
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Lotus Capital is a Nigerian pioneer in this emerging but huge financial market. This unique equitable interest-free investment solution operates in several countries, and is one of the fastest growing financial sectors in the world. The company is duly registered with the Securities and Exchange Commission (SEC) as Fund Managers and Corporate Investment advisers.
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