Category: Money

By Collins Nweze

The Association of Bureaux De Change  Operators of Nigeria (ABCON) has called on the  Central Bank of Nigeria (CBN) to increase the margin allowed BDCs on foreign exchange transactions.

Making this appeal at a webinar organised by the association, ABCON President, Aminu Gwadabe, said the N2 margin per dollar presently allowed by the CBN is inadequate in view of the huge operating cost of BDCs.

It said in a statement titled,  Resumption of Foreign Currency Sales to BDCS; COVID-19 challenges, Compliance and Way forward”, arising from a webinar put in place  to sensitise BDC operators on the processes put in place by the CBN and ABCON to ensure seamless dollar purchase by members of the public through BDCs.

Citing the example of other countries where BDCs enjoy up  to six per cent margin per dollar, Gwadabe stressed that even the N2 per dollar allowed by the CBN is not up to the three percent margin preiously allowed  by the apex bank at the commencement of the dollar sale scheme”.

He said: “The challenge that we are facing is the smaller margin. Right now, the parallel market is doing about N430 and our pegged rate is N386 to the dollar. So, we still see a gap between the advised exchange rate of N386 by the CBN and what is obtainable presently in the market. cannot cover our cost of operation.

“We are asking the CBN to please look at this and review it for us,” Gwadabe said, urging the CBN to allow for the use of virtual documentation which he said would help in curbing the spread of the Covid-19 pandemic.”

Gwadabe stated that in addition to  low margin, other challenges confronting BDCs  include  limited scope of operation, rigorous documentation and the penelities levied on erring operators.

Stressing that  the ABCON has always supported   sanctioning of erring members,  Gwadabe said there is need for the apex bank to review some of the penalties, given the severe impact of COVID-19 on the operations of BDCs.

While assuring the CBN of the continued cooperation of ABCON in ensuring stable exchange rate and compliance with regulatory requirements by BDCs, Gwadabe commended the apex bank for the resumption of dollar sales to BDCs.

Central Bank of Nigeria CBN sold about $500 million to foreign investors on the spot and forward market to gauge the level of foreign exchange demand in the market.

The CBN offered a 150 day forward on the currency market and also sold on the spot market to banks, foreign exchange dealers said. The CBN  has gradually restarted dollar sales after it halted supplies following a coronavirus-induced lockdown to slow the spread of the virus, which also reduced its activities.

Dollar demand has been swelling and piling pressure on the Naira. Importers with past due obligations have scrambled for hard currency, while providers of foreign exchange, such as offshore investors, have exited.

Foreign investors have sold Nigerian assets since February because pandemic lockdowns stalled economic activity and triggered a crash in the price of oil, Nigeria’s main export. The central bank has in the past urged investors to be patient, saying funds can exit in an orderly fashion.

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On Wednesday, the spot market traded $38.46 million. The Naira firmed almost 10% on the black market to 435 against the dollar on Tuesday on anticipation of resumed dollar sales. The dollar was quoted at N380.50 on the official market.

Meanwhile the CBN has said that currency speculators in Nigeria’s foreign exchange market are set to count huge losses as the Naira continues to surge against the dollar, following the interventions made by the Central Bank of Nigeria (CBN) in the Investors and Exporters (I&E) window.

By Collins Nweze

FATE Foundation, which will be marking its 20th anniversary has reiterated its commitment to supporting and growing businesses for wealth creation and economic growth.

The enterprise development organisation was founded by Fola Adeola (Founder & Pioneer Managing Director/Chief Executive Officer, GTBank) to harness the strong entrepreneurial culture of Nigerians by providing business incubation, growth enablement and accelerator support required to fully explore their innovative potential.

FATE Foundation has since inception, supported over 120,000 aspiring and emerging Nigerian entrepreneurs spread across Nigeria creating jobs and adding value to the local and national economies. A number of these entrepreneurs are very active in the organisation’s vibrant Alumni community.

Speaking on the Foundation’s work, Executive Director of FATE Foundation, Adenike Adeyemi noted that “the mission of our organization is to foster wealth creation by promoting business and entrepreneurial development among Nigerians”.

In 2000, FATE Foundation started the Aspiring Entrepreneurs Programme (AEP) for young entrepreneurs/startups. This was immediately followed by the launch of the Emerging Entrepreneurs Programme (EEP) for growing businesses and establishment of the FATE Consulting unit (now Growth support unit) to provide business support and advisory services for our entrepreneurs.

Two years later, the organisation won the World Bank Business Plan Competition and opened the Port Harcourt Branch to focus on enterprise creation in the Niger Delta. In 2010 an Impact

Assessment Study of FATE Alumni indicated that 65 per cent of entrepreneurs supported were still in business and they had created an average of four jobs.

Over the last decade, FATE Foundation has pioneered initiatives that continue to focus on enabling Nigerian entrepreneurs and the ecosystem. This include the Institute for Venture Design (IVD) Fellowship in Partnership with the Stanford Center for Design Research; the Annual Policy Dialogue Series on Entrepreneurship; the one-stop virtual resource center for Nigerian entrepreneurs, msmehub.org among others.

The organisation has also published seven research reports on the Nigerian ecosystem and MSMEs.
Following the impact of COVID-19, the Foundation has successfully pivoted to digital programming and developed resilience building programmes to support entrepreneurs, set up a FATE Philanthropy Coalition for COVID-19 Support Fund and also launched an 8-Part video and podcast series called Journeys in Entrepreneurship.

By Collins Nweze

Managing Director, Development Bank of Nigeria (DBN), Tony Okpanachi has commended the setting up of the MSME Academy, an initiative of the African Union Development Agency – AUDA-NEPAD in partnership with the Ecobank Group.

Okpanachi who was speaking at the virtual launch of the first Pan-African MSME Academy said the AUDA- NEPAD and Ecobank partnership must be lauded as the entrepreneurial potential and critical role of MSMEs in economic growth and development in Nigeria is clear. He noted that DBN will continue to collaborate with financial institutions to assist them with all necessary support to play their role in the economy.

In his presentation titled: “How MSMEs can access funding – opportunities from financial Institutions/banking sector”, Mr. Okpanachi, said to be bankable, the MSMEs should have accurate financial statement, collaterals, good credit history, viable business model and sound corporate governance, listing the sources of funding to include equity, grants and credit.

Also speaking, Managing Director, Ecobank Nigeria, Patrick Akinwuntan  pledged the bank’s support for small businesses operating in the country, stressing that the micro, small and medium enterprises (MSMEs) sub sector remains the most affected by the COVID-19 pandemic and needs support in the revamping of the nation’s economy. Akinwuntan maintained that MSMEs are the drivers of post COVID-19 economic recovery for Nigeria, noting that the sub sector should take advantage of technology, financial services, and support from the government to drive the survival and growth of their businesses.

Further, Mr Akinwuntan said the MSME Academy which is an initiative of the African Union Development Agency – AUDA-NEPAD in partnership with the Ecobank Group provides easy access to practical training and resources on financing opportunities in various countries in Africa, how to build a digital presence for businesses and how to adapt business operations in the era of the COVID-19 pandemic. In his words, “ as an MSME friendly bank, we have been helping them with capacity building; providing simple and easy access to loans  in various sectors including agriculture, creative industry, healthcare and commerce amongst others; access to markets via our e-commerce solutions and simple but robust digital platforms for collections and payments. We have also provided a channel to enable MSMEs to open various accounts via self-service on our webpage. I encourage all MSMEs in the country to avail themselves of this opportunity to grow their business. ”

Representing AUDA-NEPAD, Amine Idriss Adoum, Director, Programme Delivery & Coordination, explained that the MSME Academy aims to build the capacities of MSMEs across Africa through a combination of relevant content library, a network of institutions specialized in MSME support such as incubators and accelerators, and a community of peers, mentors, and advisors. He noted that  the key objectives of the academy is to radically expand access to finance by aggregating smaller financial institutions such as micro-credit institutions and credit unions that have access to micro-enterprises, standardising their processes, and building trust in their capabilities. “The MSME Digital Platform is a one-stop-shop for all MSMEs across Africa to access all these three programmes which jointly address MSMEs’ challenges with access to capacity building, markets, and capital”. He explained.

The first Panafrican MSME Academy is open to Medium, Small and Micro Enterprises in Nigeria and across Africa . The programme provides support to African MSMEs and is structured along three pillars, namely:  the MSME Academy, MSME Marketplace, and MSME Financing Support Programme to be delivered through an MSME Digital Platform. The Academy provides easy access to practical training and resources on financing opportunities in various countries in Africa, how to build a digital presence for businesses and how to adapt business operations in the era of the COVID-19 pandemic. It also offers free access to market intelligence, mentors with a diverse experience and assisting with access to funding opportunities.

Coronation Merchant Bank has launched a mobile banking application.

The app  provides customers with access to their accounts as well as the ability to perform transactions seamlessly without the need for in-person banking.

Managing Director/CEO of Coronation Merchant Bank, Banjo Adegbohungbe,  stated: “We are delighted to be at the forefront of digital banking within the merchant banking space.

“We recognise that these are very difficult times and our customers are looking for a partner that can help them navigate the challenges induced by the COVID-19 pandemic.

‘’This is why we are  raising the bar and pushing the limits in service delivery by pioneering innovative solutions that make banking easier and faster for our customers.”

He added: “Our goal is to create value for our customers  and to provide them with solutions that enable them meet their strategic objectives. We remain committed to being there for our customers even in these difficult times.”

In spite of the novel coronavirus, Coronation Merchant Bank has been at the forefront of pioneering innovative solutions to enable its customers achieve their strategic objectives.   Earlier this year, the bank announced  its partnership with IFC (a member of the World Bank Group) to provide a $40 million Trade Finance Guarantee facility for its clients. This was the first time in five years that International Finance Corporation would approve such a facility in Nigeria.