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.
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