In Nigeria, a bank offering “interest-free” loans to poor farmers back in 2009 in conjunction with a Shariah court judge, is now under investigation for fraud.
Readers may want to take note that Nigeria is being wracked by a violent jihad these days:
As has so often been the case, violent jihad is accompanied in Nigeria by a financial jihad push for acceptance of Shariah finance.
And as has also often been the case, that push has been associated with fraudulent activity.
The Nigerian Economic and Financial Crimes Commission (EFCC) is investigating the whole affair as detailed below, but what it looks like is a classic Shariah finance scam in which people are fooled into taking out “interest free” loans and are charged hefty fees for those loans.
In other words, these Shariah-compliant loans may not charge interest, but they are anything but “free.” In fact the charges customarily exceed what interest charges would be, but, because they are not interest, they get around Shariah usury laws. This is a scam that has not been limited to Nigeria. Many financial institutions across the world identify their Shariah loans as “interest free,” which amounts to fraud…
OPERATIVES from the North-East zonal office of the Economic and Financial Crimes Commission (EFCC) in Gombe have commenced investigations into allegation of fraud levelled against a branch manager of a first generation bank, a traditional ruler and Sharia court judge over agricultural loans and illegal detention of about 300 herdsmen and farmers in Shira and Giade Local Government areas of Bauchi State.
The commission moved to investigate the allegation following a petition written to it by communities in the two local government areas, which it received on October 24, 2012, on agricultural loans amounting to millions of naira, which was allegedly disbursed to the herdsmen and farmers in the two council areas by the Shira branch of the bank.
According to the petition, the beneficiaries of the loans were said to have been cajoled to open account with the bank with a view to benefitting from the loans, which were said to be interest free, sometimes in 2009. The loans ranged from N350,000 to N1 million.
Being mostly illiterates, the beneficiaries alleged that the traditional ruler employed an agent, who acted as clerk or secretary to facilitate documentations between them and the bank, adding that they were charged substantial sums of money for accounts opening.
They added that all transactions were done on their behalf by the traditional ruler and his agent-clerk both of whom collected the beneficiaries’ passports, filled bank forms, tellers and took money for them, alleging that they did not enter the bank throughout the period of processing the loans as they were attended to under a tree near the bank.
They further alleged that when the loans were approved, various sums of money were deducted upfront before their money was handed over to them.
They further alleged that they were maltreated and detained during the loans recovery process by the traditional ruler and the Sharia court judge.