Innovative Funding of Nigerian Private Islamic Universities: The Option of Islamic Financial Products (IFP)

Abstract

In spite of the Nigerian government’s exorbitant expenditure on the nation’s public universities through the National Universities Commission (NUC), the Education Trust Fund (ETF) and now the Tertiary Education Trust Fund (Tetfund), other governmental agencies intervention funds, and huge internally generated funds, it is still manifest that tertiary education in Nigeria is yet to compete favourably with others globally. While the public universities have these sources of funds, private tertiary institutions rely extensively on their proprietors and, possibly, the fees paid by students for everything, including building and infrastructure. The fact still remains that private universities, particularly those established by Muslim individuals and organisations, are not adequately funded to withstand the cost of effective administration and financial demands of the universities. To sustain those universities and assure quality, their proprietors, in addition to the cumulative investment, have to subsidise the recurrent costs of the universities. The huge amount charged as school fees, though not up to the one charged by their Christian counterparts, is not affordable to many Muslims from low socio-economic backgrounds. Since the objective of the Islamic financial products is to bridge the gap between the rich and the poor, this paper proposes the usage of these products by the Islamic universities to facilitate their attendance by students from poor economic backgrounds and to provide other facilities needed for quality assurance in the institutions. The modus operandi of this is established in this paper.