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We Were Dismissed As Unserious When Westarted Interest-free Loan by jasmine01s: 8:54am On Sep 14, 2014 |
This article seems to be old but it's an interesting piece and still effective for more info vis. www.alhayatrelieffoundation.com We were dismissed as unserious when we started interest-free loan coop 13yrs ago – Salako By ADEOLA BALOGUN Friday 1 April 2011 Alhaji Dr. Taofeek Salako recently lost the post of the chairman of the Academic Staff Union of Universities, Tai Solarin University of Education, Ijebu-Ode branch by a single vote. Apart from academic politics, he is also the national president of Al-Hayat Relief Foundation, an interest-free cooperative society with 33 branches in five states of the federation. He tells ADEOLA BALOGUN the story of the society, which he cofounded 13 years ago and how it has become a model for Islamic banking What is Al-Hayat Relief Foundation about? Al-Hayat Relief Foundation is an interest- free cooperative society, which started in 1997 in Ijebu-Ode (Ogun State). It was formed to rescue our Muslim brothers who were often forced to take loans from Shylock lenders, who charged exorbitant interests. More so, we observed that the practice was that when they took the loans, the lenders would not want the loans to be paid back. Rather, they preferred the interest to accumulate. We felt that it would be proper to come together and put up a cooperative that would be interest-free. What we wanted was to live and have all the necessities of life without unnecessarily getting them in the wrong way. Islam abhors ill- gotten and accumulated wealth; it believes that for whatever you own, it must be in halal way as opposed to haram. Six of us sat down and started talking to people about it, but unfortunately, the first set of people that we invited thought it would not be possible to float an interest-free cooperative in this environment and so backed out. But we were resilient and we continued with our membership drive and by the time we were about to do our annual general meeting after a year, we encouraged each member to come with friends and by the time we finished, the membership had swelled. Right now, we have about 33 branches in about five states. Since it was a novel idea when you started, what model did you use as guide? If we must be sincere with ourselves, heavy interest loan has killed a lot of brilliant and flourishing business outfits. We designed a format trying to follow Islamic teachings. Apart from this, we did not close our eyes to all the necessary areas like consulting legal luminaries, accountants, those whose services would be useful. We prepared our own unique accounting system, instructing our accountants to prepare it in line with what Islam would support and accept. We have about 33 branches cutting across Ogun, Oyo, Osun, Kwara and Lagos states. You don’t collect interest on loans; how then did the organisation grow so rapidly? Al-Hayat holds meetings once in a month in all the branches. This is how we operate: we pay a development levy of N500 per month and this is what we use as running cost and it is uniform. Most of those that work there are members who carry out selfless services; they are not paid. We have provision for shares; once you become a member, the minimum shares you can have is 2,500 and you can save as much as you have. For you to take a loan, you must have been a member for six months and we give you double of what you save. For example, a member that has N50,000 gets a loan of N100,000, but the shares we have are what we use to run legitimate businesses. At a point in time, we sold shares to members to float a bottled water company to the tune of N10m. At the end of the year, those who bought shares get profit for their investment. If you take a loan of say N200,000, the repayable tenure is 20 months, and you are not going to pay a dime as interest. We do not use whatever money generated at a particular branch out to service another, no. What of membership? Do you have non- Muslims as members? As at now, we don’t have non-Muslim members because the constitution that set up the organisation stipulates that members shall be Muslims and working class people. We did that then because of the challenge we faced and that is the constitution we still operate. As a faith-based organisation, what would you describe as the impact of the organisation on members, apart from seeing to their financial growth? Apart from financial growth, it is also contributing to the spiritual development of members. We organise lectures and special prayers for different areas. We have different committees. Any fund collected on behalf of the organisation is receipted and judiciously used for what is meant for. What do you mean by working class members? Working class are those who are gainfully employed. Here we mean those who have a means of livelihood like civil servants, artisans and businessmen and women. We don’t take students who are still being cared for. The CBN governor is toying with the idea of Islamic banking in Nigeria. How does that affect your organisation? Even before the CBN governor came on board, about five years ago, we had a relationship with an investment company called Jaiz Investment, which tried to float Islamic banking in Nigeria. We are shareholders in the company, and we have even requested that Jaiz should give us a branch in Ijebu-Ode. Our working together with Jaiz Investment will be much easier than the CBN, but it is a welcome development by us. Based on your personal experience, would you say it is possible to acquire wealth without taking high interest loans? It is possible and easy to acquire wealth without going through interest-based organisations. From what we have done in Al-Hayat, a majority of our members are proud owners of vehicles and homes through the loans they took from Al- Hayat. The Mercedes Benz I bought last, I took a loan from Al-Hayat and I have paid back without paying a dime as interest. By the time I was working on my house, I took a loan from Al-Hayat. Al-Hayat has helped members to purchase plots of land by buying in bulk and sharing them among members who pay back gradually. Presently, we have Al- Hayat Golden Estate along Ibadan-Iperu Road. We bought about 23 acres with a plan to make it an estate to create an ideal environment and we have done the perimeter survey and the layout. The unit cost that Al-Hayat has given to branches is N250,000 and they are to sell at N300,000. So, what we are doing is to control it so that we don’t create room for unnecessary exploitation of members. What we are selling for N300,000 would probably double if handled by others. Al-Hayat provides the necessary amenities such as roads, water, security and so on. I believe that people can attain whatever level without going through interest-based organisations, banks or bodies. What about the leadership of Al-Hayat? Many of our members are literate and civil servants; they belong to different professions. For instance, I, as the national president, am a lecturer at the Tai Solarin University of Education; the national secretary is also a lecturer. The national treasurer is also a lecturer and the national vice-president is a principal of a high school. The national financial secretary works in the audit department of the University of Lagos, Akoka. I must say that having this class of personnel has been of tremendous advantage and the result is there for everyone to see. When I look back now, I can proudly beat my chest that we started a revolution, which has liberated a number of our people from financial difficulties. http://www.nigerianbestforum.com/generaltopics/we-were-dismissed-as-unserious-when-we-started-interest-free-loan-coop-13yrs-ago-salako/ |
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