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Tag: cbn

  • CBN underwrites World Bank’s $300m mortgage loan

    The Central Bank of Nigeria (CBN) is underwriting a $300 million World Bank loan for the Nigerian Housing Finance Programme (NHFP).

    Addressing reporters on the sideline of a conference designed to find solutions to mortgage financing in Nigeria, Director, Other Financial Institutions Supervision Department of the CBN, Mrs Tokunbo Martins, said the CBN “is underwriting part of the $300 million risk of the NHFP.

    The programme benefited from a loan of $300 million for 40 years from the global lender and the CBN is underwriting the foreign exchange risks.

    According to Mrs. Martins, “the CBN is the Project implementing entity of the NHFP and the NHFP is meant to re-fund the primary and secondary markets for mortgages. It is a public private partnership and we have a loan from the World Bank so CBN itself is not putting anything in directly.”

    Corroborating Mrs. Martins, Head, Nigeria Housing Finance Programme domiciled in CBN and head of the implementation team, Adedeji Jones Adesemoye told reporters that “the major driver of the programme, the Nigeria Mortgage Refinancing Company (NMRC) funds (N8.2billion and N11.1 billion) from the Nigerian capital market to refinance the mortgages that have been financed by primary mortgage institutions.”

    He disclosed that a component of the mortgage package is that money will be disbursed through seven microfinance banks across the nation, this money is given to them in naira.

    “Between now and November, we will be launching mortgage guarantee company hopefully by the president to widen and bring us to the tail end of modern mortgage system in such a way that those mortgagees the institutions that are lending to our people can actually share risk so that more people will have access, to the housing fund,” he said.

    Also speaking at the event,  Director at NMRC, Mrs Chii Akporji said modern mortgage basically requires certain steps that state governments need to take in order to create the enabling environment for mortgages and housing investment to thrive.

  • Ovia urges NAICOM, NCC, CBN on financial inclusion

    To  acheive Financial Inclusion, the National Insurance Commission (NAICOM), Nigerian Communication Commission (NCC) and the  Central Bank of Nigeria (CBN) must approve the use of mobile phones to sell micro insurance to the poor and excluded adults in the country, Founder and Chairman, Zenith Bank, Jim Ovia  said yesterday.

    He spoke at Transcorp Hilton Hotel, Abuja,  during the 2018 Insurance Industry National Conference, entitled: “Insurance Industry and Financial Inclusion.”

    He said while NAICOM has released a new micro insurance guideline in this respect, this will not change if operators would still need to sell the product in the old traditional way.

    He said: “NAICOM has a new guideline on micro insurance but it is not being deployed through mobile telephony. The Commission can’t deploy micro insurance through the traditional old ways. It should be done through new means which is technology. The Commission, NCC and CBN need to approve mobile telephony for the distribution of micro insurance urgently,” he said.

    Meanwhile, NAICOM yesterday said it has concluded plans to launch the Nigerian Insurance Industry Development Plan (NIIDP) in order to boost financial inclusion.

    The commission said it had already concluded work on the NIIDP, with KPMG, a consulting firm monitoring its implementation to ensure each segment of the market kept to date with their assigned responsibilities.

  • CBN boosts credit facilities to female entrepreneurs

    The Central Bank of Nigeria (CBN) has said it is partnering the National Centre for Women Development (NCWD) in a bid to improve credit facilities for female entrepreneurs in the country.

    The Head, Strategy Coordination Office, Financial Inclusion Secretariat Development, CBN’s Finance Department, Mr Attah Joseph, said at NCWD office in Abuja at the weekend.

    Joseph said there was need to improve women’s access to finance; saying the meeting was geared toward finding possible initiatives that could address the challenges faced by women in accessing financial services.

    According to him, finance is very essential to growth, development and general welfare because it affects business activities and basic human needs. He lamented the lingering disparity which shows that women access to funds is lower than men despite their obvious importance to nation building.

    “Our 2017 survey shows that 42.3 per cent of men have accounts while only 30 per cent of women do not have accounts and access to interventions,” he said.

    Joseph said countries with more bank accounts and more access to finance are better in human development, saying there is huge connection between finance and wellbeing of countries worldwide.

    Responding, the Director-General, NCWD, Mrs Mary Ekpere-Eta said the centre only gets intervention from Federal Government, adding that the funds were not enough.

    Ekpere-Eta therefore, sought assistance from the CBN to enable the reactivation of various women development centres across the country.

    According to her, interventions can reach more women, particularly at the grassroots, through these centres.

     

  • CBN: financial inclusion to add $36b deposits to banks

    Banks’deposits are expected to rise by $36 billion in 2025, a financial inclusion report released by the Central Bank of Nigeria (CBN) has shown.

    The Exposure Draft of the Financial Inclusion Strategy signed by CBN Director, Development Finance Department, Modashiru Olaitan, said 46 million new individuals will join the financial system, Gross Domestic Product (GDP) will rise by 12.4 to $88 billion by 2025, new credit worth $57 billion will be given to customers, three million jobs to be created while $2 billion reduction in government leakage annually will be achieved.

    He said: “There  is global consensus that  financial  sector  development  makes  two  mutually  reinforcing contributions  to  poverty  reduction  through  its  impact  on  economic  growth  (finance  for  growth) and direct benefits to the poor using financial services. An increasing body of evidence shows that appropriate financial services can help improve household welfare and spur small enterprise activity. There is also  macroeconomic  evidence to demonstrate that  economies  with  deeper  financial intermediation tend to grow faster and reduce income inequality.”

    Continuing, he said for Nigeria  specifically, past  research  shows  the  potential  economic  benefits of  digital  financial services (DFS).

    “As such, financial inclusion is critical to the economic  recovery and  growth  of  Nigeria. Senior political  leaders, including  the Vice  President, have  made  public  statements  that  emphasise the importance  of  financial  inclusion, most  recently  during  the  official  visit  of  the  UN  Secretary-General’s  Special  Advocate  for  Inclusive  Finance  for  Development to  Nigeria  in  November  2017,” Modashiru said.

    He said government officials had also emphasised the need to act swiftly and collaboratively to accelerate progress towards financial inclusion by “propagating digital financial services as simple, flexible and easy alternative channels for reaching our remote areas and rural hinterland”.

    He said given  the  importance  of  financial  inclusion,  it  is  crucial  to  have  a  strong  strategy for achieving  the financial inclusion goals and targets that have been established by the CBN. The goal of this strategy is to realise a financial system that is accessible to adults, at an inclusion rate of 80 per cent, and to promote the country’s economic growth.

    “There  is global consensus that  financial  sector  development  makes  two  mutually  reinforcing contributions  to  poverty  reduction  through  its  impact  on  economic  growth  (finance  for  growth) and direct benefits to the poor using financial services. An increasing body of evidence shows that appropriate financial services can help improve household welfare and spur small enterprise activity. At present,  Nigeria is not on track to  meet  the 2020 targets  set  out  in  the National Financial Inclusion Strategy (NFIS) of 2012.”

    The NFIS set two financial inclusion targets for 2020: an overall financial inclusion rate of 80 per cent of the adult population and a formal financial inclusion rate of 70 per cent of the adult population. As of 2016, just 58.4 per cent of Nigeria’s 96.4 million adults were financially served and only 48.6 per cent of adults used formal financial services. The NFIS defined an additional 15 targets for channels, products and enabling environment, as well as 22 key performance  indicators (KPIs) related to these targets.

    “Still, promising developments have emerged, especially in recent times, as new stakeholders have joined the  push  for  financial  inclusion. For  instance,  the  CBN  and  the Nigerian  Communications  Commission  signed  an  MoU  on  digital  payment  systems in  2018.

    “Also  in the same year, CBN collaborated with the Nigeria Inter-Bank Settlement System (NIBSS) to create a regulatory  sandbox  that  will  allow  financial  technology  start-ups  to  test  solutions  in  a  controlled environment and  is partnering  with  the  private sector  to  roll out  a 500,000-agent  network to offer basic  financial  services.

    “In  addition,  several  players in the private  sector  have  introduced new products  and  services  aimed at the un-serve/underserved,  and new partnerships are  driving  the delivery of digital financial services more widely—programmes have been launched to boost access to  finance specifically for  excluded groups, such as  women  and  micro, small  and  medium-sized enterprises.”

    In 2012, the CBN adopted the NFIS. The document  articulated  the  challenges  in  financial inclusion; identified  areas  of  focus, key performance indicators (KPIs) and targets; and described the implementation structure. The strategy was built on the four strategic areas of agency banking, mobile banking/mobile payments, linkage models and client  empowerment.

  • CBN woos importers for Chinese currency

    The Central Bank of Nigeria (CBN) is wooing importers of goods from China to use the Yuan instead of the dollar. The move supports  the bank’s effort to promote naira exchange rate and boost foreign reserves.

    CBN officials have been holding town hall meetings with businesses in Lagos, Aba and other cities to introduce the Yuan ahead of plans to start auctioning the Asian currency later this month.

    Nigeria suffered severe dollar shortages after the price of crude oil, its top export and main source of forex, plunged in late 2014, prompting it to introduce capital controls in 2015.

    The country now has multiple exchange rates against the dollar and has been selling the greenback on the interbank market to boost liquidity after floating the naira for investors. “The Central Bank will encourage users importing goods from China to use the yuan and not the dollar,” officials said.

    “Dollar demand burden arising from trade with China would be lifted from our foreign exchange reserves,” they said, adding that initial Yuan trades could be small.

    The CBN signed a $2.5 billion currency swap arrangement with the People’s Bank of China (PBOC) in May. Officials said the deal is aimed at reducing reliance on the dollar and “as such reduce the pressure on the naira-dollar exchange rate.”

    Under the swap arrangement, the CBN would hold N720 billion in an account in favour of the PBOC while the Chinese central bank would hold 15 billion yuan, implying an exchange rate of N48 to the yuan.

  • CBN lifts forex market with $210m injection

    The Central Bank of Nigeria (cbn) yesterday injected $210 million into the interbank foreign exchange market.

    The forex injection is in line with cbn’s desire to ensure liquidity in the foreign exchange market in order to meet customers’ requests in various segments of the market.

    CBN’s figures showed that the the apex bank offered $100 million to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment received the sum of $55 million. Customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated the sum of $55 million.

    The bank’s Acting Director, Corporate Communications Department (CCD), Isaac Okorafor, confirmed the figures and reassured the public that the bank would continue to intervene in the interbank foreign exchange market in line with its quest to sustain liquidity in the market and maintain stability.

    It will be recalled that last Friday, June 29, 2018, the CBN had intervened to the tune of $318.73 million to cater for requests in the retail segment of the forex market.

    Meanwhile, the naira continued its stability in the forex market, exchanging at an average of N360/$1 in the BDC segment of the market on Tuesday, July 3.

  • CBN to banks: Don’t take fees on transactions you initiate

    The Central Bank of Nigeria (CBN) has directed commercial banks not to charge fees on transactions initiated by them.

    Speaking at the Meet The Executive forum, organised by Finance Correspondents Association of Nigeria (FICAN) in Lagos, CBN Director, Banking & Payment Systems Department, ‘Dipo Fatokun, said bank-induced transactions should not be charged on customers’ accounts.

    The CBN also directed the banks to resolve disputes arising from use of Unstructured Supplementary Service Data (USSD) channel within three days.

    Fatokun said such resolution would help build more confidence in the payment system and bring more people into the financial services net.

    He said some provisions of the regulatory framework for USSD, such as the authentication measures for transactions, International Mobile Subscriber Identity (IMSI), Date of SIM Swap, Date of Device change, International Mobile Equipment Identity (IMEI), among others, were to make the channel more effective.

    Represented by the Assistant Director, Banking & Payments System Department, Taiwo Oladimeji, he said maximum USSD transaction limit remained N100,000 per customer per day, adding that any amount above that requires the customer to execute indemnity at the bank.

    Speaking on: Half-Year Review of Developments in the E-Payment Industry and Customer Protection, Fatokun said: “USSD transactions above N20,000 require two-factor authentication (2FA). No USSD financial service should be activated for customer unless the deactivation mechanism is put in place with effect from October, 2018. In addition, the CBN is currently working to properly structure and formalise the sandbox arrangement in Nigeria by collaborating with some infrastructure providers like the Nigeria Interbank Settlement System (NIBSS) to interact with FinTechs.”

    Fatokun said the financial system was undergoing transformation through technology, adding that it was not only peculiar to the financial services sector, but all sectors of human endeavours.

    “We are seeing new operators with technology savvy, more efficient models, and collaborations among new entrants as well as established participants in payments systems in ways that exhibit regulatory challenges. To meet up with the challenges, some countries have adopted regulatory sandbox approach which is not totally novel to the CBN. We are however working to properly structure and formalise the sandbox arrangement in Nigeria by collaborating with some infrastructure providers to interact with FinTechs,” he said.

    He said a well-functioning National Payments System (NPS) was crucial to the financial sector development as it increases confidence in the financial sector by ensuring a credible, reliable and efficient payment system. He said in recent years, the payment landscape has experienced a lot of innovation, bursting with enterprise and reaching the unbanked and undeserved.

    Speaking further, he said consumer protection involved a whole range of laws, policies, structures, actions and behaviours designed to protect consumers from the abuse and exploitation of service providers.

    “Consumer protection is critical in improving access and usage of financial products and services;  ensures that increase access and usage of financial services, translate into benefits for the economy and individuals; helps protect consumers from probable market abuse and exploitation; helps con-sumers benefit from well informed decisions; helps consumers appreciate how best to use and manage financial products and services,” he said.

     

  • CBN’s PMI report shows growth in manufacturing

    The Manufacturing Purchasing Managers’ Index (PMI) in the month of June stood at 57.0 index points, indicating expansion in the manufacturing sector for the 15th consecutive month, a Central Bank of Nigeria (CBN) survey has shown.

    The Manufacturing and Non-Manufacturing PMI Report on businesses is based on survey responses, indicating the changes in the level of business activities in the current month compared with the preceding  month.

    A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting.

    The CBN report released at the weekend, showed that the index grew  at  a faster rate  in June when  compared  to the  index in  the  previous  month.  “Of  the 14 subsectors surveyed,  10 reported growth in the review month in the following order: paper  products; furniture  &  related products; printing  &  related  support activities; food,  beverage  &  tobacco products; plastics & rubber products; electrical equipment; textile, apparel, leather & footwear; chemical & pharmaceutical products; petroleum & coal products and nonmetallic   mineral   products,” it said.

    It added: “The transportation equipment; fabricated metal products; primary metal; and cement subsectors declined in the review month.”

    It explained that at 59.2 points,   the production   level index for the manufacturing sector grew for  the 16th consecutive  month in June. The index indicated a faster growth in   the   current   month, when compared  to its level  in  the  preceding month.

    “Ten of   the 14 manufacturing subsectors recorded increase in production level, 1 remained unchanged,    while    the    remaining 3 recorded   declines   in   production level during the   review   month. At 56.2 points, the new orders  index grew    for    the fifteenth consecutive month, indicating increase in new orders in June,” it added.

    Continuing, it said eight subsectors reported growth, two remained  unchanged  while four were contracted in  the  review  month. “The manufacturing supplier delivery time index stood at 56.5 points in June, indicating slower supplier delivery time    for the thirteenth consecutive month. Eight subsectors recorded improved suppliers’ delivery  time, while six remained unchanged,” it said.

    Also, the manufacturing sector inventories index grew for the fifteenth consecutive   month in June 2018.   At 57.7 points, the index grew  at a slower rate when compared  to  its  level  in the previous   month. Eleven of the 14 subsectors recorded growth, two remained  unchanged while one recorded decline in raw material inventories.

    “The composite PMI for the non-manufacturing sector stood    at 57.5 points in June 2018, indicating  expansion in the non-manufacturing PMI for the fourteenth consecutive    month. The  index  grew  at  a faster  rate when  compared  to  that  in May. Fourteen of the 17 subsectors recorded growth in the following order: repair, maintenance/washing of motor vehicles; agriculture; information & communication; professional, scientific, & technical services; finance and insurance; utilities; water  supply, sewage & waste  management; health  care  &  social  assistance; real  estate  rental  & leasing; electricity,  gas,  steam  &  air  conditioning  supply; wholesale/retail  trade; construction; management of companies; and transportation and warehousing,” it said.

    The arts,   entertainment & recreation subsector remained unchanged, while   the accommodation & food   services; and educational services subsectors recorded contraction in the review period.

     

     

  • Ex-CBN chief seeks establishment of bank for women

    A former Deputy Governor of the CBN, Prof. Kingsley Moghalu, has called for the establishment of a “Bank for Women” to boost women enterprise in the country.

    Moghalu made the call at the Chartered Institute of Bankers of Nigeria (CIBN) 2018 Annual Lecture on Friday in Lagos.

    The theme of the lecture is: “Of Banks and Bankers: Finance and the Challenge of Economic Development in Nigeria”.

    He said that 46.6 per cent of Nigerian women lacked access to financial services, despite the fact that they were highly productive.

    Moghalu urged the banking sector to do whatever it could to establish the bank, to facilitate wealth creation by women.

    The ex-CBN chief described Nigerian women as enterprising, better borrowers and loan payers than men.

    He also argued that that over exposure to the oil and gas sector had aided non-performing loans when the value of the oil and gas sector dropped.

    Moghalu said that reforms by the CBN to buy non-performing loans and aid financial stability had proved unsuccessful.

    “So out of the little credit left, over 77 per cent was concentrated in Lagos, sidelining, women in rural communities.

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    “No economy can sustain inclusive growth under such circumstance and this would lead to infrastructural epilepsy,” he said.

    The President of the CIBN, Mr Uche Oluwu, noted that Nigeria currently faced serious economic challenges.

    According to him, there are still notable gaps in the country’s development, despite exiting economic recession in 2017 after five consecutive contractions.

    “These gaps, according to the National Bureau of Statistics’ report on macro-economic indicator, revealed that unemployment rose steadily to 18.8 per cent in third the quarter of 2017 from 13.9 per cent in the third quarter of 2016.

    “Infrastructural deficits and alarming low literacy rates, are pointers to deep deficient human capacity development among others, plaguing the great nation.”

    He charged the banks, through their wealth creation, to play significant roles in allocating resources for infrastructural development.

    Olowu applauded banks for their support for Micro, Small & Medium Sized Enterprises (MSMEs).

    “However, I plead with our banks to be resolute in supporting MSMEs across various productive sectors of the economy and the adjoining value chains.”

    NAN

  • CBN directs banks’ directors to protect data

    Bank directors will henceforth be responsible for the protection and security of customers’ data against e-fradusters, the Central Bank of Nigeria (CBN) has directed.

    The new rule followed the sophistication and jump in the number of cyber-security threats against Deposit Money Banks (DMBs) and Payment Service Providers (PSPs) which require strengthening their cyber defences to remain safe and sound.

    Nigeria experienced over 4,000 cyber-attacks with 70 per cent success rate and loss of about $500 million in recent years mainly through cross channel fraud, data theft, email spooling, phishing, shoulder surfing and underground websites.

    In a circular released yesterday titled: Risk-based Cyber-security Framework for Deposit Money Banks, signed by K.O Balogun for CBN Director of Banking Supervision, the regulator said provision of oversight and leadership and resources to ensure that cyber-security governance becomes an integral part of corporate governance, rests with the Board of Directors.

    “The Board of Directors through its committees will now have overall responsibility for the DMB/PSP’s cyber-security programme. It will provide leadership and direction for effective conduct   of   the   processes.   The   Board will ensure   that   cyber-security governance is integrated into the organisational structure and relevant processes,” it said.

    Also, the board will ensure that  cyber-security  processes  are conducted  in  line  with business   requirements, applicable   laws   and   regulations while   ensuring security expectations are defined and met across the DMB/PSP.

    The Board will now hold Senior    Management    responsible    for    central    oversight,    assignment    of responsibility, effectiveness  of  the  cyber-security processes  and shall ensure  that the audit function is independent, effective and comprehensive.

    Besides, the board  will  be  responsible  for  all  cyber-security  governance  documents  such  as cyber-security strategy, framework and policies and ensure alignment with the overall business goals and objectives.

    Also, the board will, on a quarterly basis receive and review reports submitted by Senior Management. The report shall detail the overall status of the cyber-security programme to  ensure  that  board- approved  risk  thresholds  relating  to  cyber-security  are being adhered to.

    The CBN also directed the boards to henceforth ensure that cyber-security is completely integrated with business functions and, well managed across the DMB/PSP.

    Cyber-security governance should not only aligns with corporate and Information Technology (IT) governance, but is cyber-threat intelligence driven, proactive, resilient and communicated to all internal and external stakeholders.

    Boards are also mandated to appoint or designate a qualified individual as the Chief Information Security Officer (CISO) who shall be responsible for overseeing and implementing its cyber-security programme.

    “The responsibilities of senior management include the implementation of  the  board-approved   cyber-security   policies,   standards   and   the   delineation   of   cyber-security responsibilities. Senior management will  provide periodic reports (at  a  minimum  quarterly);  to  the board on the overall status of the cyber-security programme of the DMB/PSP. The Chief Information Security Officer (CISO) are responsible  for the day-to-day  cyber security  activities  and  the mitigation of cyber-security risks in the DMB/PSP,” the apex bank said