The Alternative Bank partners with TK Tech Africa to launch a $500m Sukuk project in Nigeria.

The Alternative Bank and TK Tech Africa have joined forces to establish a $500 million digital Sukuk initiative, which they say will transform Nigeria's financial technology and non-interest banking market.

The two said the collaboration will use blockchain technology to speed up and improve the process of issuing, trading, and settling sukuks, as well as provide a secure and Shari-compliant investment environment for customers in the country.

Sukuk is the Arabic name for financial certificates, also commonly referred to as "sharia compliant" bonds.

Alternative Bank is an Islamic bank licenced by the Central Bank of Nigeria, while TK Tech Africa is a blockchain technology company.

According to the partners, the Sukuk initiative will also allow clients to engage in the commodities market using tokenised alternative assets, which is expected to give optimal flexibility and accessibility.

Both Alternative Bank and TK Tech Africa claimed that they will focus on serving "the needs, preferences, and demands of customers in an ever-changing market, while also prioritising the process of remaining compliant with the laws and regulatory requirements of the industry."

Gbenga Awe, group head of structured trade and commodities finance at the Alternative Bank, said this initiative will enable Nigerians to invest in the commodities market.

“We are deeply engaged in the agricultural sector, with significant assets like cocoa, soybeans, sesame, precious metals, and warehousing facilities. Showcasing the bank’s preparedness to support the Sukuk initiative with tangible, real assets,” he said.

Oludamola Akindolire, the founder and CEO of TK Tech Africa, praised the collaboration's disruptive nature, describing it as a new benchmark for African financial innovation that combines Islamic finance principles with blockchain technology.