How we provide financial breathing space for MSMEs to scale operations, buy assets, and hire more people — Akinlabi Adegoke, Lotus Bank Chief Digital Officer

Lotus Bank’s ethical, non-interest banking model has continued to generate attention within the business community, and in this exclusive interview, the Bank’s Chief Digital Officer, Akinlabi Adegoke, shares insights into how the model works, the opportunities it creates for MSMEs, and the future of ethical and digital banking in Nigeria.

MSME Africa: Lotus Bank is known for its non-interest, Shariah-compliant banking model. Could you explain the philosophy behind this approach and its relevance for MSMEs today?

Akinlabi Adegoke: Our philosophy is built on fairness, transparency, and shared responsibility. In simple terms, we don’t earn from interest. Instead, we use partnership and trade-based models that are backed by real economic activity. For MSMEs, this is very relevant because it creates access to ethical financing that supports growth without the heavy burden of compounding interest. Beyond financing, it also helps to promote financial discipline, stronger relationships, and long-term trust between the bank and entrepreneurs. At the heart of it, our model is designed to make businesses more sustainable.

MSME Africa: In practical terms, how does non-interest banking differ from conventional banking, particularly for MSMEs?

Akinlabi Adegoke: The difference is in how financing is structured. In conventional banking, you are given a loan with a fixed interest rate, and you repay with interest over time. In non-interest banking, every facility is tied directly to real goods or services. If an MSME needs equipment, the bank can purchase and lease it to them under Ijara. If they need working capital, it can be structured as Murabaha, where we buy goods on their behalf and sell at a fixed margin payable over time. In Mudarabah, we provide capital and share in profits. These models ensure the financing is connected to tangible value, making repayment clear and predictable. For MSMEs, this means less anxiety and more focus on business growth.

MSME Africa: What financing or support opportunities are available for MSMEs under Lotus Bank’s non-interest model?

Akinlabi Adegoke: MSMEs can access different structures depending on their needs. For example, under Murabaha, we finance the purchase of inventory or equipment, and repayment is spread across an agreed timeline. Under Ijara, we lease assets like machinery or vehicles, and the business pays rental installments while using the asset. Under Mudarabah, we provide financing and share in profits generated by the business. These are not abstract products. They have been used successfully by MSMEs in sectors like trade, transport, and light manufacturing. The beauty of these models is that they give entrepreneurs practical tools to expand, while ensuring the bank is a partner in their success.

MSME Africa: Since loans and facilities are structured without interest, what alternative repayment structures or expectations should MSMEs be aware of?

Akinlabi Adegoke: Repayments depend on the type of contract. In Murabaha, you pay back the cost of goods plus a fixed margin agreed at the start. In Ijara, repayment is in the form of lease rentals. In Mudarabah, the business shares profits with the bank in a ratio agreed upfront. Across all, there are no hidden charges, penalties, or fluctuating interest rates. Everything is transparent from day one. This clarity helps MSMEs plan their cash flow better, reduces stress, and allows them to focus on delivering value.

MSME Africa: How can MSMEs access these facilities, and what role do Lotus Bank’s digital platforms play in simplifying the application and approval process?

Akinlabi Adegoke: Access is through both our physical branches and digital platforms. But what excites me is how we are making this process faster and paperless. At our Digital Service Centres, like the one in Oshodi, everything is digital. Entrepreneurs can open accounts, upload documents, and request facilities without filling a single sheet of paper. Our mobile app also enables MSMEs to initiate requests, upload KYC documents, and receive updates in real time. This is particularly important because many small businesses lose time chasing paperwork. We are changing that by ensuring speed and convenience through technology.

MSME Africa: What specific impact do you hope Lotus Bank’s approach will have on MSMEs and on Nigeria’s broader economy?

Akinlabi Adegoke: For MSMEs, we want to give them the financial breathing space to scale operations, buy assets, hire more people, and focus on innovation. For the broader economy, when MSMEs thrive, the benefits ripple outward. They contribute to job creation, economic resilience, and community development. Nigeria’s economy is driven by small businesses, and our goal is to give them ethical financial tools that reduce their risk of failure and increase their chance of long-term sustainability. Over time, this builds a stronger and more inclusive economy.

MSME Africa: Beyond financing, what other initiatives is Lotus Bank currently pursuing to support individuals, businesses, and communities?

Akinlabi Adegoke: We believe banking must be more than financial transactions. We are running financial literacy programs that equip people with knowledge to make better financial decisions. We are also supporting sustainability initiatives, such as renewable energy adoption for small businesses, and empowerment programs targeted at women and youth. These go hand-in-hand with our banking services because we want to create lasting impact. For example, we are working with schools and communities to promote digital and financial literacy among young people, preparing them to be financially responsible adults and entrepreneurs.

MSME Africa: From your perspective as Chief Digital Officer, what are the biggest opportunities and challenges for digital banking in Nigeria today?

Akinlabi Adegoke: The biggest opportunity is financial inclusion. Millions of Nigerians still do not use formal banking services, yet they have mobile phones and are active in trade. Digital banking gives us the ability to reach them directly, through mobile apps, USSD, and agent networks. But there are challenges. Digital trust is a major one. Many people are cautious about fraud and cybercrime. Another is digital literacy. Some people struggle to use apps or online platforms effectively. At Lotus Bank, we address these by building simple, transparent, and secure platforms and by complementing technology with education.

MSME Africa: Looking ahead, how do you envision the future of ethical, non-interest banking in Nigeria, and what role do you see Lotus Bank playing in shaping that future?

Akinlabi Adegoke: Ethical banking will continue to grow because people want financial solutions that reflect their values and give them peace of mind. I believe in the future, non-interest banking will become mainstream in Nigeria. At Lotus Bank, our role is to lead this movement by showing that non-interest banking is not only possible but also scalable. By blending ethical principles with digital innovation, we are making non-interest banking accessible to anyone who desires it, from a small business owner in Oshodi to a corporate client in Abuja.

MSME Africa: Finally, what advice would you give to entrepreneurs who may be hesitant about taking financial support but still require resources to grow their businesses?

Akinlabi Adegoke: My advice is simple: don’t let fear of financing stop you from growing. The key is choosing the right kind of support. Growth often requires external resources, and with non-interest banking, you can get that support in a way that is transparent and predictable. Take the time to understand the structures available, ask as many questions as you need, and work with a trusted partner. At Lotus Bank, we see MSMEs as the engine of the Nigerian economy. Our job is to walk with them, provide solutions that work, and celebrate their success. There is nothing more rewarding than seeing a small business grow into a larger enterprise, creating jobs and building the economy.

 Lotus Bank remains committed to building a financial system that is fair, inclusive, and supportive of entrepreneurs. Its mission is to provide MSMEs with ethical financing, digital tools, and the knowledge they need to thrive. As Akinlabi Adegoke notes, the future of Nigeria’s economy lies in the hands of small businesses, and Lotus Bank is proud to be part of that journey.