The Nation Newspaper

Category: Money

  • Banks, telcos fight for mobile money customers

    Banks, telcos fight for mobile money customers

    For the mobile money market,these are not the best of times. The platform which allows mobile phones to be used to send and receive money, buy recharge cards, pay bills, use Point of Sale (PoS) terminals to pay for goods and services, among others, is under threat.

    The telecoms companies (telcos) and banks which are expected to jointly drive the process are working at cross purpose. In other countries, the process could be operator-led model, bank-led model, collaboration model and peer-to-peer model. The Central Bank of Nigeria (CBN) chose the bank-led model in which case a bank deploys mobile payment applications or devices to customers and ensures merchants have the required PoS acceptance capability to carry out the transaction.

    Mobile network operators’ network merely serves as vehicle through which transactions take place. This is based on the regulatory framework for mobile payment services issued by the apex bank in 2009, which disenfranchised telcos from operating mobile money except through strategic partnerships with licensed operators.

    The Telcos, have consistently advised the CBN to allow them participate in the regulation of the subsector, but nothing has come out of the demand. The apex bank, which solely regulates the business, has given the Telcos little or no opportunity for control. This model has deprived the business the needed technological and infrastructural backing critical to its success.

    The disagreement has adversely impacted on implementation process of the mobile money platform in the country. General Manager, IBM Africa, Taiwo Otiti, said strategy being adopted by the key stakeholders is stifling the success of mobile money operation in the country.

    Speaking during an interview with The Nation, he said: “The approach we have taken in mobile money is the challenge. We have over 30 million unbanked, compared with over 100 million mobile phone users, the guys who are unbanked, they may have mobile phones, but how would you get them into the financial system. You must be able to get into his lifestyle for you to be able to get him subscribe to mobile money scheme. But many of the stakeholders are doing that”.

    Otiti said the getting the mobile money scheme running requires both the payment and supply chain properly defined and implemented by the stakeholders. He said there is need for a paradigm shift that sees all the stakeholders working together. “The telcos can’t also do without the banks, so also are the banks. It is only by collaboration, will the mobile money project begin the deliver the needed results,” he said.

    He said the stakeholders should not think of who owns the customer, but focus on products and services that can attract more customers into the scheme because nobody owns the customer. “Nobody owns the customer. What is important is collaboration that ensures that end-user gets what he wants. We need to see mobile money in terms of what the customer can get and use in improving his lifestyles,” he said.

    CBN Governor Sanusi Lamido Sanusi said regulation of the telecom sector is not within the apex bank’s control, making it difficult for it to guide mobile money operations under the telco-led model being advocated by the operators.

    Sanusi, who spoke at the 2013 risk management conference in Lagos, said the risk involved in mobile money operations are so high that regulation has to be closely implemented. He said the CBN does not control what the telcos are doing, unlike in the existing bank-led model where it provides the operating guidelines.

    He said mobile money operators are being encouraged to increase access to financial services through mobile phones that are either directly linked to a bank account or use of mobile wallets as intermediary virtual money accounts.

    Experts insist that the current regime of mobile money regulation, which is being bank-driven, is not friendly to telecoms companies who provide the mobile payment platform. They said that though there was a lot that telecoms companies could contribute in a cashless economy, their current mandate was limiting.

    The thinking is that since the mobile payments business is 90 per cent dependent on the mobile industry, it was unfair that the mobile networks are prevented from advertising their various mobile payment products which are the foundation on which the bank products operate.

    From the customer’s mobile phone, to the mobile payments system and feedback to the mobile phone, the mobile payment transaction utilises mostly mobile resources, makes use of mobile time and is supported largely by mobile engineers, but unfortunately the CBN has restricted telecom companies from advertising in the mobile payments space.

    Analysts also think that telecom companies should be allowed to speak about the capabilities of their networks, the quality of user experience and the choice of mobile payment services available on their networks.

    It is now roughly two years since the first mobile money went live and approaching a year since cashless economy came into operation. Meanwhile, none of the individual players can boast of having more than 10,000 active subscribers.

    The CBN said over the next few years, the focus of the regulator will be to strengthen the institutional and regulatory frameworks to achieve improved financial inclusion. The application of mobile technology for financial services especially in rural areas will ensure that a large percentage of the population outside the formal banking system would have access to financial services using one of the three models of card-based, account-based and virtual account.

    CBN statistics showed that only 26 million Nigerians own a bank account out of a population of 167 million populations. With telecoms subscriber base put at about 120 million by the Nigerian Communications Commission (NCC), there are indeed limitless opportunities for the country to achieve financial inclusion by bringing the large numbers of the unbanked to the banking sector through mobile money,” he said.

    The Executive Vice-Chairman of NCC, Eugene Juwah, said critical success factors for mobile payment in the country are the integrity and security of the end-to-end transition during a payment transaction process. He said the chain of transaction must be secured from initiation to authentication. Therefore, confidentiality and integrity of the data transition are critical factors in mobile payment.

    Razak Olaegbe, a mobile money analyst said Telcos are licensed to offer telecoms services and not banking services. According to him, the decision was made because the CBN does not regulate telcos and if the telcos are allowed to lead mobile money, it will mean putting two critical segments of Nigeria’s economy in the hands of a few companies. This, they believe, portends great risk for the country.

    World Bank said the global remittance market has grown rapidly over the past decade. In 2010, remittances through official channels amounted to $440 billion, of which, developing countries received an estimated $325 billion. The majority of these transactions are still cash-to-cash transactions, but the share of digital transactions is steadily increasing.

    Driven by the development of mobile money systems in emerging markets, experts estimate that $16 billion worth of international money transfers will be received with mobile phones in 2015.

    In Nigeria, the scheme is however, confronted with many problems but the CBN said the draft National Payments System Bill, which is undergoing legislative passage, is expected to address the legal barriers to electronic payments such as the admissibility of electronic evidence in the law courts.

    Managing Director, Mobile Money Africa, Mr Emmanuel Okogwale, agrees that there are still challenges. According to him, most of the companies licensed to do mobile payment are yet to have accredited agents who will reside in urban, semi-urban and rural areas. He argued that without well trained mobile money agents, the implementation would not be seamless as agents with the requisite tools and handsets are the infrastructure needed to deliver the money to the customers.

    Despite the inherent challenges, banks have been launching mobile money products to support their operations. FirstBank of Nigeria launched FirstMonie, its mobile money service positioned to assist the lender’s commitment to financial inclusion.

    “With the launch of this service, the stage is now set for the bank’s customers and anyone in Nigeria with a mobile phone to enjoy financial services, using their mobile phones to send money, pay bills, top up their phone airtime, do shopping, deposit and withdraw cash, without the need to visit a bank branch,” the First Bank Managing Director, Bisi Onasnaya said.

    Also, Stanbic IBTC Bank has reiterated its commitment to financial inclusion by empowering its mobile money customers. The bank said in a statement that it has partnered with Mobile Media InfoTech Limited (MMIT), a mobile software development company, to assist the youths and small business owners who do not have credit cards, to pay for goods through their mobile money wallets online.

    The bank said its mobile money wallets customers will be able to shop on foreign online sites like Amazon, Android store, Playstation and other gaming sites. “They will be given the option of making cardless payments through their mobile money wallets; and with this option, any customer with a smart phone will be able to make purchases on these online sites regardless of where they reside in Nigeria,” it said.

    Head of E-Business at Stanbic IBTC Bank, Thabo Makoko, described the partnership as another step towards financial inclusion for persons who are usually not able to shop online because they do not have credit cards.

    He said: “Mobile payments have taken a new turn in Nigeria and being inconvenienced or excluded from participating in the digital economy is a result of one’s inability to produce credit or debit card details for online payments.

    “We want to provide more opportunities for the under-banked in every part of Nigeria, especially the small business owners; and we want to be known as the financial service partner that opens doors for our customers; empowering them to grow their businesses and lives.

    “Removing the barriers to participating in the digital economy, the online shopping process for small business owners, youths and the under banked will greatly reduce barriers to success in acquiring tools to improve lives.”

    Analysts said the African mobile money market has the potential to grow to a money-making market, but operators, banks and regulators need to work toward developing an enabling environment for business models that meet service providers’ revenue demands.

     

  • GTBank promotes SMEs’ growth

    GTBank promotes SMEs’ growth

    Guaranty Trust Bank (GTB) has said it will pay more attention this year to facilitating the growth and development of the small and medium enterprises (SMEs) sector which is the engine of growth for developing economies.

    Its General Manager, Communication and External Relation, Mrs. Lola Adedina disclosed this when she led a delegation of the bank to pay a working visit to the Lagos head office of Vintage Press Limited, publishers of The Nation.

    According to her, GTBank has set up a website that will help SMEs sell their goods all over the country and abroad.

    She explained that one of the bank’s priorities this year is on SMEs because its management has realised that despite government’s effort and various loans, most of the SMEs are not successful.

    She said: “Past and present governments have channeled a lot of efforts towards SMEs but nothing has really happened, adding that majority of the SMEs that have benefitted from government loans still come back to bank to ask them for loans.

    “GTB decided to explore the areas in which it can add value to SMEs and we realised that e-commerce is a missing aspect. We have 160 million Nigerians out of which over 50 million are using the internet today and so GTB created a platform that enables our customers who have businesses to open their shop on our platform so that they can trade with anybody anywhere in the world.

    “We give them a payment engine which is called the GT bank web pay so that the customer is sure that it is secure and backed by GT might. We also offer the customer about five different types of logistic partners like DHL, FEDEX, Redstar and others who are well known in Nigeria so that they can manage your shipment and fulfillment for the customer.

    “So the woman who makes hand chain and does not know how she will sell her goods can come online and people in Abuja, Lagos, London, can buy her goods. This means that we are giving them a platform to trade their goods and a platform for e-commerce. Accountants, real estate agents can all come on the platform”.

     

  • Enterprise Bank enhances e-payment

    Enterprise Bank enhances e-payment

    Enterprise Bank Limited has assured its customers of additional convenience as they make use of the dual purpose MasterCard Prepaid Card. The card, it said in a statement, is used locally and internationally.

    It described the card as a multi-purpose chip and pin debit card that can be pre-funded with cash. The card can then be used to effect cashless payments (like a bank debit card) on the Internet, Point of Sale (POS) terminals and cash from Automated Teller Machines (ATMs).

    It said that one of the unique benefits of the Enterprise Bank Mastercard Prepaid, which is available to both customers and non-customers of the bank, is that it can be pre-funded in Naira or USD denominations. It is also ideal for students, corporate accounts (expense cards, estacode, and corporate travel) and travel cards, among others.

    The card, the bank added, also eliminates the burden of carrying large sums of money around, which otherwise is loadable on the prepaid card. With the product, the statement further stated that holders of the Mastercard Prepaid do not need to carry huge amounts in foreign currencies for foreign trips because money loaded in the card is already available, secure, safe and can be used anywhere in the world.

    The bank said that the process of acquiring the card is also simple.

     

    Customers can collect e-Business Application forms from any branch of Enterprise Bank nationwide and submit completed ones with required documents. Once this is perfected, the individual will collect the card on the spot and in addition, receive a welcome letter and a user manual, which guides effective usage of the card.

     

  • ANAN President seeks stakeholders’ support for economy

    The President of the Association of National Accountants of Nigeria (ANAN), Alhaji Sakirudeen Labode, has advised politicians and other stakeholders to refrain from activities that could endanger the economy.

    In a statement, released at the weekend, he said the association had keenly watched with great concern ongoing developments in the nation’s political arena. According to him, the ANAN is deeply concerned and worried that the heat in the polity is moving fast towards an intolerable level.

    The ANAN president said, “These activities remain threat to the Nigerian economy, particularly the financial sector’’.

    Labode maintained that internal and external investors as well as other stakeholders were becoming apprehensive of current developments.

    “The ANAN appeals to political players and their followers to bear in mind their responsibilities to the citizens of the country who look up to them for good governance and direction. We appeal that the game of politics should be played according to the rules in which the interest of the good people of Nigeria and their posterity shall be enhanced and sustained,” he said.

    The ANAN boss said politicians should watch their activities and ensure that the Nigerian economy is not harmed in any way.

     

  • Investors eye dividends as Forte Oil meets on audited report

    Investors eye dividends as Forte Oil meets on audited report

    •Stake N35b on sovereign bonds, equities

    Investors’ eyes are all set on dividends this week as the Board of Directors of Forte Oil Plc meets this Friday in a crucial meeting that may see the petroleum-marketing company declaring its first dividend in half a decade.

    The Nigerian Stock Exchange (NSE) at the weekend confirmed that it has received notification of the Forte Oil’s board meeting.

    Directors of Forte Oil, under the chairmanship of Mr. Femi Otedola, will discuss mainly the audited report and accounts of the company for the year ended December 31, 2013 and the corporate budget for the current year ending December 31, 2014.

    Sources in the know indicated that dividend payment will be a major discussion at the meeting, following the recent resolution of negative backlog that had legally debarred the company from paying dividend in spite of improving profitability in recent period.

    Interim report and accounts of Forte Oil for the nine-month period ended September 30, 2013 had shown that net profit after tax quadrupled by 317 per cent from N656.4 million to N2.74 billion. This indicated earnings per share of N2.54 in the first nine months of this year compared with 61 kobo recorded in comparable period of 2012. Profit before tax had increased by 258.4 per cent from N898.3 million to N3.22 billion. Turnover rose by 28.97 per cent to N92.13 billion in 2013 as against N71.43 billion in 2012.

    Forte Oil had recently undertaken a share capital reorganisation, which offset accumulated losses of more than N55.98 billion residual in its reserves with the N62.29 billion balance in its share premium account to remove the deficit and clear the last impediment that had debarred the company from paying dividends from its newly resurgent profit.

    Also, most market pundits expect the Board of Guaranty Trust Bank (GTBank) Plc to announce its dividend recommendation this week. The board has scheduled a meeting for Wednesday to consider “the audited financial statements for the year ended December 31, 2013” and also discuss “issues relating to full year dividend”.

    Directors of United Bank for Africa (UBA) are also expected to meet next week’s Friday to deliberate on the performance of the bank in 2013, including probable dividend while outlining strategic direction for 2014 among other issues.

    Meanwhile, the stock market was dominated by bullish sentiments last week with significant increase in turnover and modest increase in market value. At the equities-dominated Nigerian Stock Exchange (NSE) and the Over-the-Counter (OTC) bond market, investors increased stakes on securities, with the notable increase in debt securities underlining gradual portfolio realignments.

    Turnover on the OTC bond market, where the sovereign bonds of the Federal Government of Nigeria are traded, jumped to 13.70 million units valued at N13.70 billion in 12 deals last week compared with a turnover 1.17 million units valued at N1.16 billion traded in five deals in previous week.

    Turnover on the NSE stood at 1.76 billion shares worth N21.02 billion in 28,949 deals as against 1.51 billion shares valued at N18.33 billion traded in 25,016 deals two weeks ago. Financial services sector remained the most active sector at the NSE, accounting for about 67 per cent of total turnover with the exchange of 1.17 billion shares valued at N10.59 billion in 15,519 deals.

    The trio of Transnational Corporation of Nigeria (Transcorp) Plc, FBN Holdings Plc and Zenith International Bank Plc were the most active stocks, accounting for 402.48 million shares worth N5.55 billion in 5,934 deals, about 23 per cent of aggregate turnover volume.

    The main index at the NSE, the All Share Index (ASI), recorded average week-on-week gain of 0.40 per cent to close at 41,917.55 points. Average year to date return at the NSE thus opens today at 1.42 per cent.

     

  • Fed Govt eyes 10 per cent agric credit by 2016

    Fed Govt eyes 10 per cent agric credit by 2016

    The Federal Government plans to double agriculture’s share of banks’ credit to 10 per cent in two years as it seeks to cut food imports, Agriculture Minister Akinwunmi Adesina has said.

    “We made a fundamental shift that agriculture is not a developmental activity, agriculture is a business. And so it shifted the mind-set of the banks. It’s a new agriculture sector in which they can actually invest money and make money,” Adesina said in a report.

    Loans to agriculture as a share of total credit rose to N320 billion ($2 billion), or five per cent, at the end of last year from less than one per cent in 2011, Adesina said.

    He said the Agriculture Ministry is partnering with the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL), a unit of the Central Bank of Nigeria (CBN), to provide credit guarantees to enable banks lend to farmers.

    Nigeria, he said, is trying to reverse decades of neglect of its farming industry and push agriculture as its “new frontier for growth” because it can no longer depend on oil to drive its economy.

    The government’s efforts to boost food supply by 20 million metric tons from 2011 to 2015 has seen the country’s food import bill drop by more than half to $5 billion from $11 billion two years ago, Adesina said.

    The NIRSAL initiative, which is a brainchild of the Central Bank of Nigeria, the Bankers’ Committee and the Federal Ministry of Agriculture & Rural Development (FMARD), seeks to create incentives and catalyse processes to encourage the growth of formal credit, direct and indirect, for the agriculture value chain, as a mechanism for driving wealth creation among value chain participants.

    According to the apex bank, NIRSAL is also expected to be a catalyst for innovative risk management strategies, long-term financing for agribusiness and significant job creation by new entrepreneurs.

  • Access Bank, GRI, SIDA partner on capacity building

    Access Bank has collaborated with the Global Reporting Initiative (GRI) Focal Point South Africa, Swedish International Development Cooperation Agency, (SIDA) and Thistle Praxis on sustainability capacity building in Nigeria.

    Speaking yesterday at the G4 Sustainability Reporting Guideline Training Workshop, Access Bank’s Group Managing Director, Herbert Wigwe, said the partnership gives the bank opportunity to demonstrate its leadership in the areas of responsible business practices and sustainability.

    Wigwe, who was represented by the bank’s Chief Risk Officer, Gregory Jobome, said sustainability and responsible business practices are important to the bank and consistent with its pedigree in championing and supporting sustainability initiatives across Africa.

    He said the bank had in the past, organised several workshops and conferences, notable among which is the Nigerian Sustainability Banking Principles (NSBP) Steering Committee Meeting in partnership with IFC and AccessConference2013 where global leaders deliberated on Embracing Sustainable Leadership as its theme.

    “These corporate actions are a testimony to the bank’s sustained efforts at nation building and support for the Nigerian financial services sector in achieving a seamless integration of sustainable business practices into the core of its business operations,” he said.

    He said the workshop was meant to empower participants with the requisite knowledge of sustainability reporting.

    Head, GRI Focal Point South Africa, Mr. Douglas Kativu, encouraged Nigeria to step up the standard in the practice of sustainability reporting, given the size and relevance of the country to global economy.

  • AMCON Bill scales second reading in Senate

    •Senators lament its non-performance

    Bill seeking to amend the Asset Management Company of Nigeria (AMCON) Act 2010 yesterday passed second reading in the Senate.

    The bill, among others, seeks to establish a corporate entity with a well constituted Board of Trustees drawn from the Central Bank of Nigeria (CBN), eligible financial institutions, National Deposit Insurance Corporation (NDIC) and Finance Ministry.

    The lawmakers however condemned the alleged ineffective use of the N5.6trillion voted into the agency by CBN.

    The body being proposed in the bill is expected to make regulations for the supervision and management of AMCON’s fund.

    Chairman, Senate Committee on Banking, Senator Bassey Otu, who sponsored the bill said it also seeks to prohibit any board member or an employee of AMCON from being directly or indirectly involved in the purchase of assets acquired by the corporation.

    He also said the bill seeks to empower AMCON to acquire assets that are already subject to litigation if there is no valid court order restraining it from doing so.

    The senators in their various contributions lamented that since AMCON was set up, it had failed to live up to its objective of recovering toxic debts owed by some commercial banks.

    The Senate therefore asked its Committee on Banking to find out the exact amount put into AMCON by the CBN, and also find out whether it is being effectively utilised.

    The Upper Chamber also wanted to know how much debt AMCON has recovered so far.

    Senator Ita Enang said the N5.6 trillion voted to AMCON exceeded Nigeria’s yearly budget and queried why the corporation, since its inception had failed to recover up to 15 per cent of the entire money.

    Enang therefore advised the committee to examine the functions and operations of AMCON.

    He noted that it is lamentable that the corporation appeared to be failing because the money committed to it by CBN was not free money but rather a loan meant to be paid back to the Federation Account.

    Senate President David Mark wondered why the Federal Government should be subsidising AMCON. He noted that the toxic debt that AMCON is supposed to manage is not yielding any fruitful result.

  • AutoReg supports tax collection in states

    The AutoReg business solution has been described as a reliable and efficient platform for the collection and administration of road taxes in the country.

    In a statement issued yesterday, Courteville Business Solution Plc said the product has assisted many state governments in their revenue collections drive.

    Courteville also announced the approval by the Adamawa State Government for the automation of Motor Vehicle Administration Documentation process, using the tested and proven AutoReg Business Solution, effective next month.

    The product, it said, has created the best online, real-time records for government and its agencies; eliminated cases of duplicated registration of motor vehicle number plates and dislocated touting from all the motor licensing stations across the states.

    According to the statement, the AutoReg platform is a web-based business solution for motor vehicle administration documentation, currently deployed through about 4,500 processing points in 19 states across Nigeria and the Republic of Sierra Leone.

    It said the product has generated employment for thousands of people and created e-registration solution for the National Agency for Food and Drug Administration and Control (NAFDAC). This, it said, has helped for registration of drugs, foods, chemical and monitoring of approval processes in a more conventional and system compliant way.

    Also, the Nigerian Insurance Association (NIA) has adopted the AutoReg model for the insurance industry database, recently designed and developed by Courteville and currently in use by all the insurance companies for upload of their third party insurance policies in the industry.

    This, it said, has gained wide acceptability as a model for standardised monitoring and verification process that will unify the insurance industry towards disengaging the activities of touts in the issuance and verification of insurance policies in the country

  • CRR hike depletes banks’ balance sheets by N750b

    Banks’ balance sheets will drop by N750 billion effective February. This followed Tuesday’s decision by the Monetary Policy Committee (MPC) to raise the Cash Reserve Ratio (CRR) on public sector deposits from 50 to 75 per cent, Managing Director, Financial Derivatives Company Limited, Bismarck Rewane has said.

    CRR is a portion of bank’s deposits kept with the Central Bank of Nigeria (CBN).

    The MPC left all other parameters, including the Monetary Policy Rate un-changed at 12 per cent, with an asymmetrical corridor of plus or minus 200 basis points. The CRR on private sector deposit was retained at 12 per cent and the liquidity ratio was unchanged at 30 per cent.

    Rewane said the global economic recovery and likely impact of tapering in the United States on investment flows, shows some limited amount of vulnerability on the external sector of the economy.

    He said impact of this decision on money markets would be a shock effect in the short run and a re-turn to equilibrium rates within six weeks.

    “The first time the MPC increased the CRR on public sector deposits in August, last year, an estimate of N1 trillion or 6.84 per cent of money supply was debited. At that time, the impact was a spike in interbank rates of approximately 800bps to an average of 21 per cent. Also, it coincided with the failure of two discount houses which exacerbated the situation,” he added.

    He said about N750 billion that would be debited on February 4 is equivalent to 5.09 per cent of money supply. “Therefore, we expect an initial spike of approximately 400bps before settling to a 1.5 per cent increase in the effective cost of funds for the banking system. Banking net interest margins and profitability will be affected whilst their liquidity will remain unimpaired,” he said.

    He said the key variable that drove this decision remains the protection of the value of the naira in the foreign exchange markets. “The CBN Governor expressed some concerns about the declining trend in foreign portfolio flows. This in addition to the leakages and falling fiscal buffers made the CBN take a more aggressive position to defend the naira,” he said.

    According to Rewane, the divergence between the official and parallel markets had widened to N20 or 12 per cent of the official exchange rate, adding that the economy is more exchange rate than interest rate sensitive. This, he said, means that a depreciating currency will have a direct impact on inflation and could be counterproductive.

    Razia Khan, said in view of increased market liquidity following the Asset Management Corporation of Nigeria (AMCON) bond maturity in December, as well as an increased spread between the interbank foreign exchange rate and bureau de change rates, the move is not surprising.