The Nation Newspaper

Category: Money

  • Ecobank launches new Western Union Money Transfer

    Ecobank Nigeria has launched a new service on its retail internet banking platform, named Western Union Account Based Money Transfer service (WUABMT).

    In a statement, the bank said the product allows customers to receive money through Western Union online daily.

    The bank said customers will receive money from 510, 000 Western Union agent locations worldwide directly to their Ecobank account in Nigeria.

    “Western Union just got more convenient at Ecobank,” it said, adding that customers working outside their home countries, can send funds to their own Ecobank account through Western Union, by simply logging in to Internet banking on the bank’s platform and simply transfer the funds to their account with the bank.

    The bank’s Head, Assets and Liability Products, Domestic Banking, Adeola Dare said the electronic service will boost the successful partnership between the lender and Western Union across Africa.

    “It resonates’ a commitment to providing reliable and convenient world-class money transfer service for Africans where ever they might be,” he said.

  • CBN pegs weekly dollar sales in BDCs at $250,000

    CBN pegs weekly dollar sales in BDCs at $250,000

    Foreign exchange sales to bureaux de change (BDC) operators will remain at $250,000 per week per BDC, the Central Bank of Nigeria (CBN) has said.

    In a circular to authorised dealers and BDC operators, CBN Director, Trade and Exchange, Musa Batari, said the selling rate by the authorised dealers to BDCs shall be the prevailing interbank exchange rate plus a margin not exceeding one per cent.

    He said foreign exchange cash bought by BDCs from authorised dealers and the CBN shall be sold to foreign exchange end-users at a rate not exceeding two per cent margin above the buying rate.

    “For the avoidance of doubt, the margin shall be applicable to all funds to be retailed by BDCs regardless of sources of the fund,” he said.

    Batari explained that authorised dealers shall continue to render weekly returns on sales of BDCs while the BDCs shall render weekly returns on purchase from authorised dealers. He enjoined BDCs to keep adequate records of foreign exchange sale and purchases for purposes of monitoring by authorities.

    The CBN had earlier observed that some authorised dealers have continued to deal in ‘free funds’ without adequate documentation contrary to provisions of extant regulation.

    The regulator reminded the dealers that the circular is still in force and all dealings in foreign exchange must be supported with appropriate documentation and returns rendered to regulatory authorities irrespective of the source of the funds. It said dealers that violate the laws will be sanctioned.

    CBN in September, replaced Wholesale Dutch Auction System (WDAS) with Retail Dutch Auction System (RDAS) because of the ineffectiveness of the former in addressing hitches in the forex market.

    It also withdrew the licences of 20 bureau de change (BDCs) operators for violating forex rules, an indication that more licences withdrawal may be seen in future, should the violation continue.

    Under the RDAS, banks and other authorised dealers place bids on behalf of individual clients who qualify to buy forex at the official auction. The change from WDAS to RDAS allows the authorities to monitor more accurately various sources of forex demand and any potential duplication of forex demand in the system. Banks will remain responsible for all documentation requirements.

  • Enterprise Bank’s Walk-for-Life coming

    Enterprise Bank Limited will on Saturday hold its Walk-For-Life campaign.

    In a statement, the bank said the event will hold simultaneously across the ten regions of the bank nationwide.

    The exercise will kick off at 7 a.m. According to the Corporate Communications Department of the bank, the walk underscores and promotes the importance of good health and physical fitness in the country.

    Explaining the modalities for the Lagos version, which will be kicked off by Mallam Ahmed Kuru, the bank’s Managing Director/Chief Executive Officer, the statement added that the campaign would involve participants walking a distance of six kilometres on the Lagos Island.

    The bank said it decided to embark on the walk because walking is a great way to keep the body fit and healthy. Research has also shown that just 30 minutes of walking every day can increase cardiovascular fitness, strengthen bones, reduce excess body fat, and boost muscle power and endurance.

    Walking can also reduce the risk of developing conditions such as heart disease, type-2 diabetes, osteoporosis (bone disease) and some cancers. Unlike some other forms of exercise, medical experts believe that walking is free and does not require any special equipment or training.

  • CITN inducts 548 members

    The Chattered Institute of Taxation of Nigeria (CITN) has inducted 548 members who were successful in its professional training programme. Some of the inductees were Oyetoki Paul, Idowu Olubukola, Ubani Ukoma and the host of others.

    Speaking at the 29th Induction ceremony of the Institute, the Chairman of Membership and Professional Conduct Committee of Council, Mrs. Olajumoke Simplice, said the ceremony was in compliance with Section 1 (3) of the Institute’s membership rule. She said such induction needs to preceed CITN membership.

    She further stressed that by the induction, the inductees have obtained the right to practice taxation either as a practitioner or as administrator.

    The CITN President, Mr. Mark Anthony Dike said that taxation remains crucial for the nation’s development. He urged government not only to recognize services of tax professional in policy formulation, but also accord them due priority in its drive to evolve a viable tax system.

    He said the CITN as a sole regulator of taxation in Nigeria, would ensure that only competent and certified professionals practice and administer taxation in Nigeria.

    He lamented that not all the sectors of the economy contribute to tax. “Agriculture for instance, contributes about 34 to 35 percent to the Gross Domestic Product but does contribute little or nothing to tax,” he said.

    Furthermore, he said that tax avoidance and invasion decimate tax revenue in Nigeria adding that the problems of tax avoidance and tax invasion could be solved if the government gives back to the tax payer the value for the tax payment being made, because effective taxation is a one on one relationship.

  • GTBank launches GTExpress service

    Guaranty Trust Bank Plc has launched its “GTExpress” service, an agent banking service that allows customers access financial services at convenient locations. In a statement, the bank said the service would help it in achieving a more inclusive financial services industry.

    It said the GTExpress service is banking via agent locations such as Supermarkets, Schools, Cinemas, Markets and Restaurants and remains an initiative to reach out to the underserved and unbanked segments of the population through the use of non-banking retail outlets.

    It said the non-banking outlets (agent locations) will provide banking services such as account opening, cash deposit and withdrawal through Automated Teller Machines (ATMs), customer enquiries, bills payment, funds transfer services and other activities as the Central Bank of Nigeria may prescribe from time to time.

    Managing Director GTBank, Segun Agbaje said the unbanked sector of the economy presents a significant growth area for banks in emerging markets. “Our objective is to offer banking products and services to this segment via non-banking outlets thus breaking down barriers to financial inclusion such as accessibility and cost,” he said.

  • Resolve unclaimed dividend issue, govt urges SEC, NSE

    The Federal Government yesterday urged the authorities of the Securities of Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) to find lasting solution to the lingering crisis of unpaid dividends, by working out modalities on how the idle money can be paid to investors.

    Giving the advice at the 3rd Annual Retreat of the Capital Market Committee (CMC) in Abuja yesterday, the Minister of State for Finance, Dr Yerima Lawan Ngama, said it was no longer desirable to have the over N60 billion unclaimed dividends unpaid to their owners, especially retail investors, at a time the collective desire is to attract more investments into the nation’s capital market.

    The Minister commended the 38.8 per cent growth in the capital market this year but noted that there was need to explore other untapped investment opportunities for the market in order to create the medium and long term investible funds crucial for the infrastructure rehabilitation agenda of the three tiers of government.

    Ngama said one of the challenges that must be addressed is the opening up of the capital market for new investors, “particularly retail investors who are yet to really see it as a source of wealth creation.”

    The Minister of state for finance disclosed that government was “planning a forum where all the Distribution Companies (DISCOS) and Generating Companies (GENCOS) of the newly privatized electricity companies will come and tell everybody their story and aspirations and what they need to reach where they want to reach because one of the big things they need is not only ideas but commission.”

    He told capital market participants that those invited to come and hear the stories of the DISCOS and GENCOS “are multilateral financial institutions, the IFC, Islamic Development Bank, all of them are coming to seek opportunities that they can invest. But don’t expect them to come and list before they get the money. Try to have funds that people can invest in and guarantee them certain returns and tell them that these companies are investing in companies that will provide the infrastructure in the country. By so doing we will really assist them.”

    Ngama said, “the market over-reacted to the activities of 2008, most of our companies are doing well, but because of the global trend, and the preponderance of foreign investors, their action brought our market down. So, all we need now is confidence building because the facts on ground support our market is strong as it is portrayed today.”

  • Sanusi to speak at women conference tomorrow

    The Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, will be the keynote speaker at the fifth anniversary of the founding of Women in Successful Careers (WISCAR), a network for career women.

    The event which is scheduled to hold tomorrow in Lagos will also mark the graduation of WISCAR’s fourth stream of successful Mentees, and the induction of the fifth stream.

    In a statement, the organisers said the theme of the event ‘Unlocking the Full Potential of Women in the Nigerian Economy’, captures the essence of WISCAR’s vision and mission.

    The chief hosts are the Honourable Chief Justice of Nigeria, Justice Aloma Mariam Mukhtar; retired senior corporate executive and human resources consultant, Chief Olufemi Adesanya; and a retired senior South African diplomat, Mrs Nozipho January-Bardill.

    Speaking on the rationale behind the establishment of WISCAR, the founder, Mrs. Amina Oyagbola, who is also the Human Resources Executive at MTN, said the group was established after she participated in the Aspen Global Leadership Network (West Africa) programme, ALIWA.

    “WISCAR aims to institute an effective career mentoring frame work for young professional career women. Our goal is to initiate and promote the emergence of a highly motivated and talented female work force that are not only valuable role models, but are agents of positive cultural and policy changes within their respective organizations and Nigeria,” she said.

  • DMO stifles development, says WAIFEM chief

    DMO stifles development, says WAIFEM chief

    Director-General, West African Institute for Financial and Economic Management (WAIFEM), Prof Akpan Ekpo, has said the creation of the Debt Management Office (DMO) to manage Nigeria’s debt profile is a minus for the economy.

    Speaking at the weekend during the yearly workshop of Finance Correspondents Association of Nigeria (FICAN) in Ogun State, he said such institutions ended up impoverishing the future generations.

    He said the DMO regularly issues debt instruments which creates more debts for the economy and stifle funds that could have gone into infrastructure funding.

    He said in most cases, the raised funds are not channeled into building viable infrastructure that supports economic growth and development but are wasted on frivolous projects.

    Ekpo said in 2004, Nigeria’s debt stock amounted to about $46.6 billion, which comprised $35.9 billion of external debt and $10.7 billion of domestic debt. He said high debt service costs on Nigeria’s $30.4 billion Paris Club debt had tremendously strained public finances, crowding out space for other necessary social expenditure and investments in public infrastructure.

    However, he said as part of the successful debt negotiation process with the Paris Club, Nigeria paid its creditors outstanding arrears of $6.4 billion, received debt write-off of $16 billion on the remaining debt stock (under Naples terms), and purchased its outstanding $8 billion debt under a buy back agreement at 25 per cent discount for $6 billion.

    The entire debt relief package totaled $18 billion, or a 60 per cent write-off in return for $12.4 billion payment of arrears and buyback.

    He said the exercise involving the buyback was unprecedented and represented an “unnatural” solution under the Paris Club protocol for a low-income country; it was the second largest – debt relief operation in the Club’s 50-year history. Such was the debt exit deal that succeeded in eliminating the country’s external debt overhang syndrome.

    Meanwhile, Nigeria’s total debt now stands at N8.32 trillion ($53.42 billion), the DMO has said.

    The latest statistics released by the DMO on its website showed that at the end of September, the total debt comprised the external debts of the Federal Government and the state governments as well as the domestic debt component of the Federal Government.

  • Cash-less banking for states in June

    Cash-less banking for states in June

    Cash-less banking, which began in Lagos last year, will go nationwide before the end of June, next year, according to Central Bank of Nigeria (CBN) Deputy Governor, Operations Mr Tunde Lemo.

    Anambra, Ogun, Rivers, Kano, Abia and the Federal Capital Territory (FCT) adopted the policy last June.

    Speaking during the Nigeria Inter-bank Settlement System (NIBSS) 20th anniversary in Lagos, Lemo said the use of mobile phones and Point of Sale (PoS) terminals in implementing the policy remained critical.

    “That is a challenge that we are also working on. If mobile phones can serve as a touch point, our transactions would go up rapidly. So, these are some of the things we are looking at, hoping that by next year, as we roll out more PoS machines, we have to see how we integrate the mobile phones into the network because in the hinterlands, the challenges would be more. We hope to roll-out to all the state capitals by the second quarter of next year,” he said.

    Lemo said an effective payment system was going to be an effective anchor for the transformation of the economy even as the nation strives to be one of the 20 biggest economies in the world by 2020.

    CBN Director of Communications Ugochukwu Okoroafor said the policy was meant to reduce the amount of physical cash circulating in the economy and encouraging more electronic-based solutions for payments for goods and services, transfers among others.

    Since the project was introduced in 2002 in Lagos, many commercial banks have, through emails, text messages and formal letters been sensitising their customers on the need to embrace alternative payment options.

    In an emailed statement to its customers, GTBank said the policy will drive the development and modernisation of Nigeria’s payments system within the Abuja and selected states. It said all individuals and corporates will be encouraged to adopt electronic payment and other banking options.

    The policy, which before now was only operational in Lagos State in terms of charges, is aimed at promoting the use of electronic-based transactions instead of cash for payments for goods, services, transfers among other services.

    The implementation of the ‘Cash-less Lagos’, as it is known, began eary last year and has recorded improvements is the use of PoS, Automated Teller Machines (ATMs) and other e-payment tools.

    The service charges/fees did not apply until March last year, in order to give people time to migrate to electronic channels and experience the infrastructure that has been put in place.

    The policy framework stipulates that cash-in-transit lodgment and cash evacuation services will no longer be available to customers or merchants. For individual account holders, charges on cash transactions will apply when daily withdrawals and deposits are in excess of N500,000 while for corporate account holders, charges will apply when daily withdrawals and deposits are in excess of N3 million. It is the account to which withdrawal and lodgment is made that bears the processing charges and not the individual that receives or deposits the cash.

    However, the CBN granted exemptions on lodgments and withdrawals for accounts operated by embassies, diplomatic missions, multilateral agencies, aid donor agencies, Ministries, Departments and Agencies (MDAs), Microfinance Banks (MfBs) and Primary Mortgage Institutions (PMIs).

     

  • Banks jostle for SMEs’ funding

    Banks jostle for SMEs’ funding

    Banks are taking strategic positions in funding Small and Medium Enterprises (SMEs) seen as key driver of the economy and financial services sector. COLLINS NWEZE reports steps taken by most lenders to empower the subsector through improved lending.

    A Until recently, banks in Nigeria and other parts of Africa were relatively unwilling to finance the millions of Small and MediumEnterprises (SMEs) dotting the continent’s challenging business landscape. Reasons: poor quality of financial records maintained by most SMEs, insufficient protection of lenders’ interests under existing commercial laws, and the difficult business environment where they operated.

    However, deposits money banks have recently, started to develop improved value proposition to enhance banking services to SMEs. Banks like Ecobank Nigeria, Skye Bank Plc, Access Bank, First Bank of Nigeria among others have consistently improved their commitments to lend to the subsector.

    There have also been various SME development and advocacy organisations including the Nigerian Association of Small Scale Industrialists (NASSI) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have constantly encouraged banks to enhance the access to finance to SMEs to help grow the economy while also helping business methods by focusing on training and enhancement of business methods of these businesses.

    The recommendations are against the backdrop of the partial success of the 2005 Micro-Finance Policy, Regulatory and Supervisory Framework for Nigeria introduced by the Central Bank of Nigeria (CBN). The project has transformed the 607 community banks operating across the country into micro-finance institutions to enable them extend micro-loans to individuals, businesses, and organisations, which would otherwise be unable to access funding from formal financial institutions.

    Ecobank Nigeria said it was committed to developing robust value proposition to enhance banking services to retail markets across Africa, including the under-served SME segment.

    According to the bank, the role was in line with its goal to extend its dominance of the wholesale banking business in the region to the retail segment since SME banking has been identified as a key driver of retail and economic growth.

    To achieve this, the bank embarked on an aggressive and strategic expansion of its distribution channels by growing its branch network through acquisition of Oceanic Bank in Nigeria in September 2011 and Trust Bank Ghana Limited (TTB) in January 2012.

    The acquisitions added nearly 500 branches to the Group’s network thereby consolidating its status as Africa’s number one bank brand. This is a key part of the bank’s goal to bring banking closer to its customers, a key part of the value proposition to drive retail banking. The bank’s transactional account offering allows customers to make use of its branch and electronic channels, driving easy and convenient payment. The bank also offers a competitive international payment platform using telegraphic transfers and documentary trade solutions to boost payments to foreign suppliers within and outside Africa.

    The bank has a strategic alliance with Nedbank of South Africa and the Bank of China which clearly illustrates the group’s global ambitions. The bank also provides various financing products to help SMEs grow and their businesses. These include basic overdrafts, business term loans, trade and distributor finance in local and foreign currencies.

    The Ecobank overdraft makes funds available to eligible SMEs when they need it without having to pay interest on the full cash limit but on the amount of cash utilized. While the business term loan is repayable in equal monthly installments for any period from one to five years to finance specific business needs of SMEs. Ecobank also provides flexible short term finance to businesses that import and distribute raw materials, non-perishable finished goods. The bank’s trade finance offering helps SMEs manage their cash flow while minimizing risks associated with the settlement of international trade.

    More importantly, Ecobank Transnational Incorporated and African Guarantee Trust Fund recently signed a portfolio guarantee agreement worth $50 million to support Small and Medium Scale Enterprises across sub-Saharan Africa. Following the signing, which took place at the ETI’s head office in Lagos, Ecobank pledged to promote and support small businesses within the region. The two institutions said under the terms of the $50 million agreement they would work together to unlock the potential of SMEs in Benin, Burkina Faso, Cameroon, Côte d’Ivoire, the Democratic Republic of Congo, Kenya and Nigeria to deliver inclusive growth.

    Speaking on the agreement, Group Executive Director, Domestic Bank, ETI, Mr. Patrick Akinwuntan, said the inaccessibility to finance had been a major obstacle to small business growth and development, with only 20 per cent of African SMEs receiving a credit line from a financial institution. The agreement, he said, aimed to assist viable SMEs by providing an AGF-backed partial guarantee for 50 per cent of net losses of the principal. This, he added, was under the loan facilities extended to customers in the value chain of the SME financing programmes, including contract and receivable finance, distributorship finance and asset finance.

    A statement by the company quoted the Ecobank Group Chief Executive Officer, Thierry Tanoh, as saying, “This agreement reaffirms Ecobank’s commitment to support small and medium-sized businesses and our collaboration with African Guarantee Fund will further enable the SME sector to play a critical role in the socio-economic development of Africa.”

    Akinwuntan said, “Ecobank recognises that the SME and medium-sized enterprises sector has significant growth potential, represents Africa’s ‘rising middle’ and provides the largest employment pool for our vibrant population. This agreement leverages our unrivalled pan-African footprint to deepen financial inclusion in Africa.” Also speaking, Chief Executive Officer of AGF Felix Bikpo, maintained that the partnership with Ecobank was of great significance as it provides them with a very important Pan-African banking network through which African SMEs would be assisted in getting increased access to financing.

    In a separate assertion, Chief John Odeyemi, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), disclosed recently that SMEs engaged in the distribution trade constitute about 50 percent of the sector, while 10 percent are into manufacturing, 30 percent in agriculture and 10 percent in the service sector. According to Chief Odeyemi, SMEs account for over 60 per cent of Nigerian Gross Domestic Product generated mainly in the agricultural, service and distributive trade sectors. He added that SMEs engaged in distributive trade are more viable than those in the manufacturing and agricultural sector, making it easier for them to access funds from financial institutions.

    In spite of the challenges, which characterise lending to SMEs in agriculture and manufacturing sectors of the economy, Akinwuntan noted that Ecobank remains committed to funding these sectors. He said the bank’s value proposition to SMEs was developed after painstaking research on the needs of businesses in Nigeria, using traditional and non-traditional methods to evaluate, mitigate and price the risk associated with financing SMEs, especially in the manufacturing and agricultural sector.

    “We have developed a comprehensive value proposition anchored on three pillars to aid the growth of SMEs. The three pillars are access to finance, capacity development and business advisory and transactional support. Enhancing access to finance remains the key objective of the bank, and we intend to achieve this by providing capacity development solutions and advisory services to SMEs, through third party partners, and our knowledgeable sales team. The bank also encourages the businesses we finance to develop capacity in managing their risks, help them organize themselves into cooperatives and ensure financial statements are up to date. This helps in minimizing the risk of failure ultimately leading to a healthy loan book,” Akinwuntan said.

    The expected social and economic outcomes from funding of SMEs is to raise household incomes, create employment, improve food security due to increased trade, manufacturing, agricultural productivity and the generation of market surpluses, as well as improved access to markets, while institutionalizing credit products at more affordable rates for individuals and small businesses across the country, in a sustainable manner.

    Also, Skye Bank said it intensified efforts to provide financial services to the unbanked within the population. The Executive Director in charge of South-south Business Development/Retail Banking, Skye Bank Plc, Mrs Ibiye Ekong, who disclosed this during an interaction with the press in Lagos, said the lender will reach out to the unbanked through specialised product offering adding that it had perfected plans to enhance opportunities in the retail segment of the market.

    “There are about 64 million unbanked adult population in the country, and another 16 million youth population that is unbanked. So, a lot of opportunities abound out there for players in the industry”, she said.

    FirstBank has reiterated its commitment to SMEs growth through improved funding and capacity building.

    Speaking ahead of the its premier SME conference held in Lagos, the bank’s Executive Director Retail Banking South, Mr. Gbenga Shobo said the lender has as part of its far-reaching SMEs’ support programme named SMEConnect, initiated an a yearly conference.

    He said the conference with theme: “SMEs at the heart of national development: Creativity, capacity and capital” will highlight challenges and opportunities for small businesses.