The Sultanate Council is working to establish the Caliphate Islamic Microfinance Bank, a Shariah-compliant lender intended to fight poverty, create jobs and support small businesses across Nigeria and the West African sub-region.
The Sultan of Sokoto, Alhaji Sa’ad Abubakar, disclosed this in Sokoto on Sunday at the opening of a three-day training programme on Baitul Mal wat Tamweel, organised by the Islamic Development Bank in collaboration with the Sokoto State Zakat and Endowment Agency. Represented by the District Head of Kilgore, Alhaji Jabbi Kilgore, the Sultan said the proposed bank would give small-scale entrepreneurs access to Islamic finance to expand their businesses and improve their livelihoods. He said the initiative had reached an advanced stage, with investors, including those from outside Nigeria, expressing interest in partnering on the project.
“The aim is to establish a bank that will serve as a model not only for Nigeria but also for the West African sub-region,” the Sultan said.
The timing reflects the scale of the problem the bank would be expected to address. The World Bank’s Country Partnership Framework for Nigeria covering 2026 to 2032 puts about 139 million Nigerians below the national poverty line, with poverty concentrated in the north. It also estimates that 33 per cent of the population is ultra-poor and unable to meet minimum food requirements, while only 8.5 per cent of poor Nigerians are covered by any form of social safety net.
Sokoto sits at the sharp end of that data. The National Bureau of Statistics has put the state’s multidimensional poverty rate at about 90.5 per cent, among the highest in the country. The state’s Zakat and Endowment Agency distributed more than N727 million to 18,400 families across 87 districts during the last Ramadan, a measure of how much of the population depends on charitable support.
Islamic microfinance remains small relative to that need. Nigeria has more than 800 microfinance banks, but academic research published in 2026 puts the number of Islamic microfinance institutions at no more than ten. Islamic microfinance accounts for less than 1.5 per cent of a global microfinance portfolio estimated at more than $124 billion, even as the wider Islamic finance industry is projected to exceed $3 trillion.
Access to credit is the other constraint. The Enhancing Financial Innovation and Access 2026 survey found that formal financial inclusion rose to 73 per cent, up from 64 per cent in 2023, but only about 12 million Nigerian adults, roughly 10 per cent, access formal credit. For borrowers who avoid interest on religious grounds, or who cannot meet collateral and documentation requirements, the gap is wider still.
Malam Lawal Maidoki, chairman of the Sokoto State Zakat and Endowment Agency, framed Baitul Mal wat Tamweel as a bridge between relief and enterprise. He said the model combines social welfare with economic development, providing immediate assistance to vulnerable people while helping them acquire resources and capabilities for sustainable livelihoods.
“In many communities, Zakat and other charitable resources provide essential relief, but relief alone may not create a clear, supported pathway from vulnerability to sustainable livelihoods,” Maidoki said. He added that conventional microfinance may be inaccessible or unsuitable for people who cannot meet its conditions or who seek financing consistent with Islamic principles.
Saat Suharto, an Indonesian social activist and Islamic economics expert who served as a resource person, said the training was designed to strengthen capacity to apply the model in an inclusive, accountable and locally appropriate manner. He said it identified the need to strengthen Zakat and Waqf administration, improve staff capacity, simplify procedures and deploy technology to improve transparency and operational efficiency.
The proposed bank would still need licensing from the Central Bank of Nigeria, which issued guidelines for non-interest microfinance banks in April 2017. Capital requirements, governance and Shariah compliance would be subject to regulatory approval. The Sultanate Council has not published a timetable, capital base or list of investors, and the CBN has not announced any application.
What the initiative does signal is a shift in emphasis from relief to productive finance. Whether it can move enough capital to the small businesses that need it will depend on details that are yet to be made public.