The Nation Newspaper

Category: Money

  • Mobile money agents advocate clear rate for services

    Consumers, merchants and other agents of mobile money are demanding a clear pricing structure for the effective implementation of the process.

    In a survey conducted by Visa Incorporated, the parties said individuals are price sensitive and evaluate alternative options meticulously. The survey analysed the financial services’ needs and expectations of mobile money among about 2,500 consumers, mobile money agents, and merchants in Bangladesh, Ghana, India, Indonesia, Nigeria and Pakistan.

    According to the survey, 90 per cent of consumers expressed interest in making use of these services in the future, but cited cost of calls as the primary reason for choosing a mobile network operator.

    Also, lack of prevalent accessibility to mobile money agents was also ranked as a key barrier to the adoption of mobile money. It said to drive adoption, cash and customer service will need to be readily accessible to meet expectations even as 54 per cent of consumers cited quick and easy access to cash as a key benefit of mobile money.

    The study also found that security concerns associated with carrying cash and the need to quickly send money to family members living far away are among the key drivers for mobile money adoption.

    The study suggested that the success of mobile financial services is determined by how deep a mobile money provider understands its customers and tailors the service to the needs of consumers and mobile money agents – from service menus, to marketing and education.

    It also found there is high awareness of mobile money services and capabilities among consumers in developing economies.

    “Eighty- one per cent of consumers surveyed intend to use mobile money to send money to family members, 56 per cent to pay utility bills and 52 per cent to save money for their family. The primary driver to adopt mobile financial services is the need to protect funds from theft and the ability to more easily send funds and pay bills.

    “Not having prevalent accessibility to mobile money agents is ranked as a key barrier to the adoption of mobile money. To drive adoption, cash and customer service will need to be readily accessible to meet expectations. Fifty four per cent of consumers cited quick and easy access to cash as a key benefit of mobile money,” it said.

    The study included both in-depth qualitative and quantitative research on money management needs, habits and practices as well as factors that need to be addressed for the adoption of mobile money services.

  • ‘Scale plays key role in positioning of banks’

    With credit to the agricultural sector rising to 3.7 per cent last year, banks, including Sterling Bank, Plc have been bullish on keying into the Federal Government’s agric transformation agenda by developing special products to drive this initiative. In this interview with the Managing Director of Sterling Bank, Mr Yemi Adeola, whose bank is in the market to raise N12 billion via rights issue, spoke to a select group of journalists on many issues in the industry and the economy. Group Business Editor AYODELE AMINU was there.

    The primary market has been inactive for several years, and Sterling Bank is the first bank to undertake equity issue in several years. What gives you the confidence to come to the market at this time?

    As you know, investors’ confidence took a big hit following the 2008/09 financial crisis. However, recent reforms by the capital market authorities have begun to yield dividends, restoring confidence to the market which has witnessed a resurgence of key indices to pre-crisis levels.

    On what gives us the confidence to approach the market at this time? We have never been in doubt about the value of the franchise. Rather, we have been mindful of the need to get a good valuation for the stock in order to preserve shareholders’ value. We believe that stock valuations are closer to their true values than they have been for some years and companies with good fundamentals would be rewarded appropriately by the market.

    Sterling Bank has a compelling business model that is resilient. The bank continues to post high returns despite its limited capital. In the last three years, the bank achieved an average Return on Average Equity (RoAE) of 18 per cent. We have our shareholders’ backing that this is the appropriate time to raise the additional capital for the franchise’s development plans.

    Beyond the rights issue, what’s the extent of your capital raising exercise and how are you going to achieve these?

    The Rights Issue is part of our overall capital raising programme: • $200 million (N30 billion) in tier 1 capital comprising $80 million through Rights Issue and $120 million through Private Placement by September 2013.

    • $200 million in tier 2 capital through multicurrency debt issues expected to come through by Q1’ 2014

    How will the additional capital impact on the performance of the bank?

    These funds would be deployed to key areas of our business to deepen our retail penetration and fast-track our expansion plans. Specifically, we would be enhancing our technology infrastructure, expanding our branch network and our alternative channels as well as remodelling our existing branches to capture a more retail appeal. The bank also plans to increase its lending in the corporate banking and agric space, which is limited due to capital restraints.

    These investments should positively impact our retail footprint and profitability. We are keen to build a franchise that would outlive the managers.

    What attractions are in this rights issue for shareholders?

    With an average RoAE of 18 per cent  over the last three years, we believe that there is a compelling business case for discerning investors to take part in the programme. The financial year also appears very promising with a RoAE of 23 per cent  in the first quarter, and we are on track to close the year with a RoAE of at least 20 per cent.  We expect to sustain this performance in the coming years.

    You have made quite ambitious forecasts for this rights issue. What assurances can the public count on these?

    On the contrary, we believe that the forecasts are conservative, driven by realistic assumptions. Moreover, the bank has an experienced management team with a proven track record of performance.

    How immune is Sterling Bank to industry policy variations? Can we count on the bank to survive any major policy changes in future?

    We must commend the monetary authorities for the excellent work they have done to stabilise the financial system. The industry has, indeed, come a long way and we believe that lessons have been learnt by key stakeholders to forestall drastic policy changes that could reverse the positive strides in recent years, which have received global acclaim.

    However, we understand that factors beyond the immediate industry environment could also impinge on industry fortunes and without sounding immodest, we can say definitively that we are prepared for these as well. We have a resilient business model that is designed to withstand a challenging business environment. You would recall that Sterling Bank was one of the first 10 banks adjudged to have passed the CBN’s 2009 stress test at the height of the nation’s financial crisis.

    How has the divestment from your previous non-commercial banking subsidiaries impacted on the bank?

    Our divestment exercise was managed in a professional manner and at a profit to the bank. Indeed, the bank’s 2011 financials was positively impacted by the sales of the subsidiaries. However, we retain very robust and mutually beneficial relationships with these companies as we see continuing value in our relationship.

    You had recently leveraged on acquisition. Will you consider further acquisition?

    Historically, inorganic growth has played a significant role in the emergence of Sterling Bank as a significant player in the banking industry. We have also built internal capacity to rapidly translate the gains from such exercises into enhanced profitability for shareholders’ benefit. Consequently, while we are on track to achieve our medium and long-term objectives without the need for an acquisition, we would remain open to such opportunities in the near to long term.

    Beyond the general shareholders’ acclamations at the annual general meeting, do you have firm assurances of your core shareholders on this capital issue?

    We have no doubts about the willingness of the bank’s shareholders to exercise their rights as they see immense opportunities for enhancing the value of their stakes in the business.

    What are the strategic goals of Sterling Bank in the medium to long-term?

    We believe that scale plays an important role in the competitive positioning of any player in the banking industry. Consequently, we have set for ourselves a target of at least five per cent market share (measured by assets) by 2016.

    What is Sterling Bank doing to support small and medium scale enterprises (SME)?

    We have several success stories in this respect and we are strengthening structures to deepen our engagement with SMEs. We have also recently launched products aimed at providing solutions for players in this market segment from the SUPA account to specific product programmes tailor made to the unique funding requirements in specific markets.

    In the next five years, where do you see Sterling Bank in terms of industry ranking?

    As I stated earlier, our target is to achieve a market share (measured by assets) of five per cent by 2016.

    How robust and sustainable is your corporate governance structure?

    Sterling Bank’s Board of Directors is composed of competent individuals with diverse professional backgrounds and management experience. Indeed, our corporate governance structure is one of the strengths of the organisation and has been invaluable in building institutional resilience and focus.

    On a personal note, what kind of leader are you?

    One of Sterling Bank’s core values is team work. At Sterling Bank, we believe in a participatory and consultative management where employees are allowed to air their views on issues affecting their productivity in the workplace as well as those of our customers. It is this kind of environment that aids ideas generation and transforms average organisations into world-class institutions. I am conscious of this and recognise my role as the rallying point for staff and customers to express their views and ideas.

     

     

     

  • Automatic agent licences for banks, MfBs, says CBN

    Automatic agent licences for banks, MfBs, says CBN

    Commercial banks and microfinance banks (MfBs) will get automatic licences to run agent banking when the guideline is reviewed soon, Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, has said.

    He spoke in Lagos during the launch of the Geospatial mapping of financial institutions in Nigeria in conjunction with the Bill and Melinda Gates Foundation (BMGF).

    He said it was important to do the review and make it clearer because of initial challenges in banking.

    Sanusi said agent banking is part of the CBN’s determination to enhance financial inclusion in the country and that the target is 80 per cent adults, with about 70 per cent from in the formal sector.

    According to him, there will be specific targets for services, such as payments, savings, credit, insurance and pensions outlined.

    Sanusi said: “Achieving these targets will require the collaborative efforts of stakeholders in the financial industry. And with this in mind, the Central Bank of Nigeria has approved a number initiatives centered on improving inclusion some of which include the development of Agent Banking Guidelines, and tiered Know-Your-Customer (KYC) requirements to encourage financial institutions to reach underserved segments, the development of a Consumer Protection Framework under a newly set up Consumer Protection Department and a National campaign to promote Financial Literacy.”

    According to the CBN, the agent banking guideline is in line with the powers conferred on the banking watchdog by Section 2 (d) of the CBN Act, 2007 and Section 57 (2) of the Banks and Other Financial Institutions Act (BOFIA), Laws of the Federation of Nigeria, 2004.

    The law empowers the CBN to issue guidelines for the maintenance of adequate and provision of reasonable financial services to the public.

    The objective of agent banking, it said, is to provide for its minimum standards and requirements, enhance financial inclusion and provide for this special banking as a channel for offering banking cost effectively.

    Agent banking is the provision of financial services to customers by a third party (agent) for licensed deposit taking financial institution and/or mobile money operator (principal).

    The agent banks are expected to receive cash deposit and withdrawal, carry out bills payment (utilities, taxes, tenament rates, subscription etc.), payment of salaries and funds transfer services (local money value transfer). They are also expected to check balance enquiries, generate and issue mini-statements, collect and submit account opening and other related documentation, among others.

    They are also to carry out cash disbursement and repayment of loans, payment of retirement benefits, cheque book request and collection, collection of bank mail/correspondence for customers, other activities assigned by the apex bank.

    The applications for licence will be accompanied by board’s approval. The document will outline the strategy of the financial institution, including current and potential engagements, geographical spread and benefits to be derived among other factors.

    Under the guideline, super-agents are agent networks that will establish a collection of outlets or franchise in its wide network of outlets that will be under its supervision and control.

    The sole agent is expected to be an agent, who does not delegate powers to other agents, but will assume the agent banking relationship/responsibility by himself while the sub-Aawill be under the control of a super agent as may be provided in the agent banking contract.

    Also, licensed institutions are advised to renew agent agreements biennially except otherwise required while the CBN will, at least, yearly, monitor financial institutions/agent relationships, compliance with laid down guidelines and regulations.

     

    The approach for monitoring super-agent would differ from other agent types in view of the probable higher risk, liquidity management and consequences of failure. In the case of super agents the CBN shall require full disclosure on persons or entities that control more than 10 per cent or more of the share capital or has powers to exercise significant influence over the management.

     

  • Skye Bank to train exporters, importers

    Skye Bank Plc has said it will organise capacity building workshops for its international trade customers. The training, it said, in a statement, is on how they can conduct their businesses and ensure proper documentation of trade requirements.

    Head of International Operations of the bank, Mr Ade Busari, who disclosed this, said in addition to organising periodic workshops for the businessmen, the bank would continue to train account officers in the various branch locations on trends in foreign trade requirements for transmission to the exporters and importers.

    He said the bank would continue to ensure that its customers’ ‘Forms M’ are not rejected by inspection agents, which has the implication of delaying transactions.

    “We will continue to ensure that our customers know what they need at every stage and what they are supposed to do to make their business easy, convenient and fast,” he said.

    Busari said the bank had organised a forum each in Lagos and Ibadan for importers and exporters to explain trade issues, documentation requirements, as well as providing solutions to some of their perceived misgivings and uncertainties concerning international trade.

     

    He advised the customers to always come to the bank to make enquiries on issues that they are not conversant with, noting that the bank would always avail them of all necessary information they require to succeed in their business. Busari said the lender is working on measures to further make international business easy for its clients irrespective of the country of their trading partners.

    Busari said account officers of the bank in all the branches who have been relating with the importers and exporters have in recent times increased their customer education activity to make international trade simple and delightful to customers.

     

  • Interbank rates up on CBN’s liquidity mgt slowdown

    The inter-bank rate last week rose by 179 basis points to 14.1 per cent, following the slowdown of the Central Bank of Nigeria (CBN’s) liquidity management exercise.

    Consequently, the call/overnight and seven-day money market rates inched up to 14.08 per cent and 14.12 per cent on July 16 and 17.

    The three-month Nigeria Inter-Bank offered Rate (NIBOR) also traded on 14.87 per cent, though less activities are done on the tenor. The inter-bank secured lending (Open Buy Back) rose 13.79 per cent for commercial banks and 14 per cent for discount houses.

    Currencies Analyst at Ecobank Nigeria, Olakunle Ezun confirm that the liquidity status was partly due to slowdown in CBN’s management exercise from June to-date. The CBN offered and sold $300 million on July 15 at N155.76 to support the naira.

    He said the CBN’s liquidity management remained active and supported by the circular issued on August 1, reviewing its guidelines for how banks access its Standing Lending Facility window and Wholesale Dutch Auction System forex auction this he said is in addition CBN’s Monetary Policy Committee decision to hold the rate unchanged at 12 per cent on 21 May, this year.

    He said the naira will continue its downward trend this week as impacts of strong market demand and falling reserves bite harder. For him, the trend will persist although the CBN remains poised to support the currency’s short term outlook through monetary operations and robust foreign exchange reserves of $47 billion (about 12 months of imports equivalent).

    He said the naira will continue to depreciate within the week, reiterating investor’s “wait and see attitude” on the naira short term outlook.

    The global crude oil price (Bonny Light) was broadly steady on $109.0/bbl even as the volatility remains elevated and continued to reflect deep uncertainties in global economies.

     

    Global economy

    The dollar is undermined by uncertainty over timing of Federal Reserve’s “tapering” of quantitative easing and Federal sequestration spending cuts that could slow growth. But as monetary policy expansion slows, dollar is expected to strengthen, thereby boosting economic recovery.

    Euro volatility is heightened and will remain elevated until Euro Union leaders confirm policy move towards greater fiscal integration and joint banking sector regulation. European Central Bank support however, remains crucial in underpinning Euro outlook.

     

    Financial Inclusion

    The apex bank has emphasised the need for stakeholders’ support in its drive to achieving targets set in the Nigerian Financial Inclusion Strategy (NFIS).

    CBN Governor, Sanusi Lamido Sanusi, disclosed this at the launch of the Geospatial mapping of Financial Institutions in Nigeria in conjunction with the Bill and Melinda Gates Foundation (BMGF).

    He said the target outlined in the NFIS strategy is the reduction of the number of adults excluded from access to financial services from 46.3 per cent in 2010 to 20 per cent in 2020. As a member of the Alliance for Financial Inclusion (AFI), he said Nigeria’s declaration was in line with the Maya declaration in 2011.

    According to him, it is targeted that at least 70 per cent of the proposed 80 per cent adult Nigerians to be financially included, would be in the formal sector, with specific targets for services such as payments, savings, credit, insurance and pensions. To achieve this however, he said there must be collaboration among all the stakeholders in the financial industry.

    Sanus said the CBN had since approved a number of initiatives aimed at improving financial inclusion. He listed some of these initiatives to include the development of Agent Banking Guidelines, tiered Know-Your-Customer (KYC) requirements to encourage Financial Institutions to reach out to under-served segments, the development of a Consumer Protection Framework under a newly set up Consumer Protection Department and a National campaign to promote Financial Literacy.

     

    AfDB

    The African Development Bank (AfDB) is planning to raise as much as $1.5 billion in local-currency bonds in Nigeria and Zambia to finance infrastructure projects. This became exigent as emerging-market bond yields rise on speculation the Federal Reserve will reduce economic stimulus, Bloomberg report said.

    The AfDB, which gives money to African governments for projects in areas such as roads, ports and energy, is completing the planned size of the medium-term note programmes and is in talks with authorities in the two countries, Olivier Eweck, financial technical services manager in the bank’s treasury department, said.

    “Before the end of the month we would have made up our minds on the numbers,” he said. The Nigerian issues may be worth as much as $1 billion and the Zambian debt may reach the kwacha equivalent of $500 million.

    It said African countries are stepping up sales of local and foreign debt, targeting funds for infrastructure on a continent where many lack regular access to services such as water and electricity. The offers come as borrowing costs increase amid speculation that the Fed will begin scaling back a United States debt-buying programme that pumped cheap money into assets around the world, including emerging markets.

     

    Dud cheques

    Bank customers issued dud/dishoured cheques worth N166 billion last year, the CBN had said. CBN Acting Director, Financial Policy and Regulation, Y.B. Duniya said in a circular to all banks and financial institutions that over 167,507 dud cheques were issued and processed by deposit money banks from January to December last year.

    He said that henceforth, the CBN, in order to check this malaise will forward the account details of erring customers to the Economic and Financial Crimes Commission (EFCC) for further investigation and prosecution.

    Duniya said the enormous volume of dishonoured cheques in the financial sector has shown no sign of abating. The implication of the development, he said, is the low confidence generated in the use of financial instruments, which adversely affects the CBN’s cash-less policy aimed at reducing the volume of cash-based transactions and businesses in the country.

    The CBN director said that over-indulgence of cash in the economy increases the cost of banking services, raise the incidence of crime and facilitate money laundering.

     

    FAAC

    The Federal Government may resort to bank loans and external borrowings to fund gaps in revenue shared by states under the Federation Account Allocation Committee (FAAC). This has become exigent as revenue from oil drops. Managing Director, Financial Derivatives Company Limited, Bismark Rewane, hinted on this possibility in this month’s Economic Report obtained by The Nation.

    He explained that total federal allocation shared in first half of the year was N3.3 trillion, about 13.74 per cent higher than the N2.92 trillion shared in the same period of last year.

    However, the revenue from the Federal Account in July and the remaining months in the second half of the year is expected to fluctuate within N500 billion to N900 billion as in previous months.

    He hinted that a decline in the federal allocation remains possible, and will have a downside risk to the naira as the government battles with ways of bridging funding gaps.

    Rewane explained that a depreciation of the naira would result in a depletion of external reserves and consequently affect the federal allocation. Also, further decline in oil price is expected to increase the disparity between the approved budget and revenues leaving government with the option of relying on bank loans and or external borrowing to manage the funding gap.

    He said July inflation is estimated at 8.99 per cent against 8.49 per cent in June. This, he said, would be fuelled by increased demand for consumer goods as Ramadan begins. “There was also a decline in average inter-bank interest rates in first and second quarters of the year as they averaged 11.6 per cent and 12.2 per cent per annum.The naira equally depreciated at the parallel and inter-bank markets in first quarter,” he said.

     

    Currency in circulation

    Currency in circulation fell by 2.5 per cent to N1.47 trillion in April, a report from the CBN had shown. This is in contrast with an increase of 4.9 and 3.4 per cent at the end of the preceding month and corresponding period of last year.

    The development, the apex bank said, reflected, wholly, the 4.6 per cent decline in currency outside banks component. Total deposits at the CBN amounted to N6.1 trillion, indicating a decline of 10.2 per cent below the level at the end of the preceding month.

     

    Bank to bank report

    FirstBank of Nigeria Limited signed a $100 million facility agreement with China Development Bank (CDB), a leading bank in the Peoples’ Republic of China.

    In a statement, FirstBank said the agreement was in line with its bid to boost lending to Small and Medium Scale Enterprises (SMEs) in Nigeria. It is also expected to stimulate economic growth in the country.

    According to the statement, the signing of the landmark agreement, witnessed by President Goodluck Jonathan, who was on a state visit to China; and his host, President Xi Jinping of China, reinforces the bank’s leadership position as a National Icon and Global Player.

    The FirstBank Group Managing Director, Bisi Onasanya, is a member of the Presidential delegation, which also includes four state governors and 10 cabinet ministers.

    According to the document signed by the managements of the two banks, both lenders will work together to further strengthen the business co-operation between both parties within the framework of each party’s respective articles and memorandum of association and applicable laws and regulations in Nigeria and China.

    United Bank for Africa (UBA) Plc has introduced the World MasterCard, which is the most exclusive card in the MasterCard staple.

    In a statement, the bank said the introduction of the product is consistent with the bank’s focus of providing appropriate product to every customer segment, including high net-worth customers who cherish rare and exclusive privileges.

    Head, Cards, UBA Plc., Adidèjì Olówè, said the card programme, which is available by invitation only, can be tied to any of Naira, US Dollar, Pounds Sterling and Euro domiciliary account.

    He emphasised that the product offers a chockfull of benefits such as travel accident and inconvenience insurance; extended warranty; purchase protection; concierge services; and emergency cardholder services. The card, Adédèjì stated, is exclusively made from a rare alloy of silver nickel, only a few materials of which exist in the world.

    “The heft of the material is its signature. The recognition of the programme has afforded it the highly coveted MasterCard premium hologram. In addition, there is a great security service protecting our esteemed customers everywhere they shop with Fraud Protection and MasterCard Zero Liability,” he added.

    Access Bank UK Limited has announced that Assets Under Management (AUM) in its private banking and asset management business rose by over 200 per cent to $18.5 million by the end of last year. Also, the bank’s AUM stands at $66 million.

    In a statement, the bank said the increase in AUM has been driven by the ability of Access Bank UK to deepen its client relationships by expanding its product portfolio to its clients beyond the traditional focus on banking and asset management services.

    “Buy-to-let property loans, Investor Visa and discretionary portfolio lending provide new routes for customers to access hard currency outside of Africa. Access Bank UK provides private banking services to African/Nigerian Ultra-High Net Worth Individuals (UHNWIs) in the UK and Sub-Saharan Africa. Services provided include traditional private banking services, property and discretionary portfolio lending,” the statement said.

     

  • Ecobank Chairman in trouble over N1.6b insider loan

    The Public Investment Corporation (PCI), Ecobank Transnational Incorporated (ETI’s) biggest shareholder has asked the lender to resolve a dispute of unpaid debt involving businesses associated with Chairman Kolapo Lawson.

    “We have written a letter to the board of directors, a confidential letter, requesting the board to quickly find time and space to discuss this matter so we can resolve it properly,” Daniel Matjila, the PIC chief investment officer, told Bloomberg. The PIC didn’t ask that the chairman be replaced, he said.

    The Central Bank of Nigeria (CBN) informed Ecobank in April that Lawson failed to honor a pledge to repay debt owed to the Asset Management Corporation of Nigeria (AMCON). Ecobank owes N1.2 billion ($7.4 million) and Agbara Estates, of which Lawson is the chairman, owes it N1.6 billion, the Financial Times (FT) said, citing people familiar with the matter.

    The PIC, which manages more than 1 trillion rand ($101 billion) mostly on behalf of South African civil servants, bought 20 per cent of Lome, Togo-based Ecobank in April last year. Nedbank Group Ltd. , a South African bank controlled by London-based Old Mutual Plc (OML), has an option to buy 20 per cent of Ecobank in November. Nedbank Chief Executive Officer Mike Brown declined to comment in an e-mailed response to questions.

    In response, ETI told Reuters that debts owed by businesses associated with its chairman were performing and there was no doubt they would be repaid.

    Ecobank spokesman Jeremy Reynolds said there is no question of Lawson not settling debt.

    The FT reported late on Tuesday that the bank was caught up in bitter boardroom squabbles about the borrowings and that the lender’s leadership faced a crisis of confidence among some shareholders. The FT said it had seen documents showing that the CBN notified Ecobank in April of Lawson’s failure to make good on promises to repay the loans passed to AMCON.

  • Fidelity Bank gets $150m AfDB credit

    The Board of Directors of the African Development Bank (AfDB) yesterday approved a $75-million medium-term line of credit (LoC) to Fidelity Bank Plc to fund selected projects in sectors that are critical to Nigeria’s transformation agenda and economic growth.

    Such areas include infrastructure, manufacturing and Small and Medium Enterprises (SMEs). The LoC will be complemented by AfDB arranged-syndicated financing of up to US $75 million on a best-effort basis. The LoC will complement Fidelity’s other fundraising efforts through deposits mobilisation and financing lines from Development Finance Institutions (DFIs), commercial banks and proceeds from its recent bond issuance.

    A statement from the AfDB said the “LoC will contribute to bridging Fidelity’s financing gap by providing much-needed longer-term liquidity to meet its pipeline demands against the background of a financial market that has hitherto slanted towards short-term liquidity inhibiting access to medium- to long-term lending.”

    This financing the AfDB statement said “will allow Fidelity to better serve and fund its clients, increase the tenors of loans to sub-projects and expand its loan portfolio, particularly in the manufacturing and infrastructure sectors.” Twenty per cent of the LoC proceeds will be dedicated to SMEs.

    The AfDB noted that the LoC is in recognition of the positive impact of the Central Bank of Nigeria’s efforts to strengthen its supervisory framework, stabilise and instill confidence in the local financial system as well as improve liquidity and credit flows.

    The LoC sends strong signals that Nigeria’s financial sector has stabilised and confirms a return of confidence to the Nigerian banking sector. The AfDB said it sees the LoC as symbolic of its partnership role in supporting the private sector to play its rightful and important part in building the Nigerian economy.

  • Inflation rate declines to 8.4% in June

    Inflation rate declines to 8.4% in June

    Inflation slowed to 8.4 per cent in June, the National Bureau of Statistics said.

    The inflation rate declined from nine per cent in May. The median estimate of 12 economists surveyed by Bloomberg News was 8.8 per cent. Prices climbed 0.6 per cent in the month.

    The inflation rate fell below 10 per cent in January, meeting the Central Bank of Nigeria (CBN’s) target for the first time since August 2011, as the impact of last year’s higher fuel prices waned.

    The CBN kept its policy rate at a record 12 per cent for the 10th consecutive meeting in May on concern spending was poised to rise after the military began an offensive against Islamist militants in the northeast.

  • Diamond Bank pledges more support for MSME

    Diamond Bank Plc has reiterated its resolve to continue to encourage entrepreneurs in the micro, small and medium scale enterprises (MSME) sector of the economy.

    In a statement, Head, MSME Propositions of Diamond Bank, Mr. Chima Nnadozie, said in Abuja, the Federal Capital Territory (FCT) while addressing participants at the 34th Diamond BusinessXpress Enterprise Series.

    Nnadozie noted that the purpose of the seminar, which is being hosted across the country was to support owners of MSME grow their businesses through capacity building.

    He disclosed that the bank is supporting the SMEs with the realisation that the wealth of a nation is directly connected to the level of entrepreneurship in that nation.

    “We are supporting the growth of SMEs because we recognise that the future of this nation lies in the hands of entrepreneurs, so any energy expended in building up that sector cannot be wasted. It is something that is going to benefit the economy in years to come,” he said.

    Nnadozie noted that the business express seminar is a complete package of everything a bank could provide to a small business to enable it grow.

    He explained that for MSMEs to attract loans from the bank, the entrepreneur should have an account with the bank, invest in the business and have a location from which it operates. He added that collateral security which used to be a big issue in loan consideration and approval was no longer the case.

  • MfB launches salary advance scheme

    MfB launches salary advance scheme

    Lovonus Microfinance Bank Limited has launched salary advance scheme for employees of small to medium size companies to ease financial difficulties often faced before the monthly remuneration is due for payment by the employer.

    The scheme provides salary advance or instant loan to the employee, with a flexible repayment plan of one to three months, Usman Onoja, its Chief Executive said.

    He said to ensure the convenience of the employee, the salary advance is processed within 48 hours from the application or documentation, with delivery almost immediately, stressing that interest rate on the product is negotiable.

    To further deepen its customer service, the microfinance bank launched three new products recently, branded lovflex, lovflexplus and lovflexpremium. According to Onoja, lovflex is targeted at micro traders in need of N5,000 to N30,000, stressing that interest rate on the facility was cut to seven per cent per month for a maximum four months tenure while the repayment plan could be by daily or weekly contributions.

    “Lovflexplus is for traders in need of N40,000 to N70,000 credit, for a four month tenoure with interest rate of seven percent, while Lovflexpremium is for 80,000 to 100,000 loan, on four months maximum tenure, with interest rate of seven per cent monthly and repayment scheduled daily or weekly,” Onoja added.

     

    “Interestingly, our customers can access their funds from anywhere in the country. We also run mobile banking, which permits our marketers to carry mobile phones for deposit collection and lodgments into customers’ accounts. The customer gets immediate phone alert on every deposit to his account,” he said.