FINANCING ECONOMIC DEVELOPMENT IN NORTHERN NIGERIA: THE ROLE OF ISLAMIC BANK

ABSTRACT This study investigates the role of Islamic banks in financing economic development in Northern Nigeria, focusing on their contributions to financial inclusion, sectoral growth, and sustainable development. Utilizing a descriptive survey design, primary data were collected from 150 respondents comprising staff and customers of Jaiz Bank in Maiduguri, Borno State, through structured questionnaires. The findings reveal that Islamic banks have significantly enhanced access to finance (83.3% agreement) and supported trade (80.7% agreement) and economic diversification (74.7% agreement). However, their impact on agriculture (74.7% disagreement) and SMEs (77.3% disagreement) remains limited. Key challenges include regulatory constraints (87.3% agreement), low public awareness (74.7% agreement), skilled personnel shortages (68.0% agreement), limited capital base (90.0% agreement), and competition from conventional banks (86.7% agreement). Respondents recommended staff training, capital expansion, product innovation, technology adoption, and government incentives to strengthen Islamic banking operations. The study concludes that while Islamic banks promote ethical finance and inclusion, structural barriers hinder their developmental potential. Policy reforms and institutional support are essential to maximize their contributions to Northern Nigeria’s economy. Keywords: Islamic banking, economic development, financial inclusion, Northern Nigeria, Shariah-compliant finance.