The Nation Newspaper

Tag: fund

  • ‘Cash-less policy has reduced cost of fund’

    Interswitch, an electronic transaction switching and payment processing company, has said the cash-less policy of the Central Bank of Nigeria (CBN) has reduced the cost of banks’ operations.

    It said the direct cost of handling, processing and managing cash across the nation as at 2009, stood at N114 billion and could have increased if the cashless policy had not been introduced.

    Responding to e-mailed questions, the firm said cardholders must be constantly educated on keeping their banking details protected.

    “The good thing we have also done as stakeholders in the e-payment industry are to also introduce solutions that would drive adoption of the cash-less policy. These solutions have been designed to address the specific needs of the ordinary Nigerian towards the adoption of e-payment,” it said.

    The firm said it is seeking for an upgrade in the technology processes and systems for early detection of fraud.

    This, it said, had become imperative because fraudsters were developing new mechanisms to circumvent new security measures.

    Interswitch said as a second layer of defence, it has introduced Scorebridge, which is a fraud management system that enables Electronic Financial Transaction (EFT) messages to be processed through predefined Artificial Intelligence in order to determine the transaction’s risk and probability of a fraud.

    It said: “Banking security has got so many banks thinking about safety and reliability of their networks. What steps do you think that lenders need to take to guarantee customers’ transaction security and trust? Over the years, the banks have invested a lot in different security measures to guarantee customer transactions, but as a minimum, all banks should have the following measures in place: Defining a baseline security standard (such as PCIDSS) Educating customers on safe security practices when using their cards Investing in a fraud management system.”

     

  • Investors Protection Fund: Investors submit 600 claims for compensations

    Investors have submitted more than 600 claims and request for compensations to the Board of Trustees of the Investors Protection Fund (IPF) as Nigeria’s first investors’ compensation scheme kicks off operations.

    Securities and Exchange Commission (SEC) had two weeks ago approved the operating rules for the IPF, paving the way for the scheme to start effective operations. Part XIV of the Investment and Securities Act (ISA) 2007 requires the Exchange to establish and maintain an investors protection fund to compensate investors with genuine claims of pecuniary loss against dealing member firms resulting from insolvency, bankruptcy or negligence of a dealing member firm of a securities exchange or capital trade points; and defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received by the dealing member firm in its course of business as a capital market operator.

    An impeccable source told The Nation that IPF already has a bagful of more than 600 claims and requests for compensations, which will give the scheme a busy start.

    The Nation learnt priorities will be given to the most pressing claims while all claims will be treated in accordance with the rules of the IPF.

    With IPF’s fund current estimate below N800 million, the mounting claims for compensations will subject the board to rigorous tests of not only the substantiality of the claims but also the degree of compensation based on the existing capital base of the fund.

    The IPF rules empowers the board of trustees to have at anytime a written policy on the maximum compensation payable to an investor who has suffered a loss. The board can review this maximum compensation limit from time to time according to prevailing circumstances at the market.

    The rules indicate that an investor whose claim is within the maximum limit may be paid the full amount of the loss, after deduction of any amount or value of all monies or other benefits received or receivable by the investor from a source other than the Fund in reduction of the loss.

    Besides, where the board is satisfied that in principle compensation is payable but considers that immediate payment in full would not be prudent having regard to other applications for compensation, or to any uncertainty as to the amount of the investor’s overall net claim, the rules empower the board to pay an appropriate lesser sum in final settlement or to make a payment on account.

    It stated that the board may also determine to make a payment on account or to pay a lesser sum where the investor has any prospect of recovery in respect of the claim from any third party or through an application for compensation to any other person or authority.

    However, the board may determine to reduce the compensation which would otherwise be payable to an investor in circumstances where it is satisfied that the investor is partly to blame for the loss which he has suffered.

    Compensation would be paid subject to conclusive decision of the board on the basis of evidence that the investor has a claim against a dealing member, duly applied for settlement of its claim from the dealing member; the dealing member was unable or likely to be unable to satisfy the claim within a reasonable period and the investor then, duly applied for compensation from the Fund.

    According to rules, an application for compensation may be rejected if it is not promptly made and in any event within the periods stipulated in the ISA or where the investor is responsible for, or has directly or indirectly profited from, events relating to the dealing member firm’s business which gave rise to the firm’s financial difficulties.

    The rules empower the board to make payment of compensation based on the claim submitted to the NSE and verified by the NSE or claim submitted to the board of IPF and verified by it, according to relevant sections of the ISA.

    In the event of multiple claims, person who claims in a double capacity for himself and as the personal representative of a deceased investor will be treated in respect of the representative claim as if he were the deceased investor without prejudice to his own personal claim.

    Also, where a person claims for himself and as a trustee, he will be treated in respect of the latter claim as a different person.

    But where two or more persons in partnership have a joint beneficial claim, the claim will be treated as the claim of the partnership; otherwise each of them would be taken to have equal shares in the claim unless the contrary is proved to the satisfaction of the board.

    According to the rules, where an agent has a claim for one or more principals, the principal or principals are to be treated as having the claim, to the exclusion of the agent.

    In order to replenish the fund, where the IPF finds an investor’s claim to be genuine and makes compensation on that basis, the board of the IPF shall have the right to recover such amount from the concerned stockbroking firm, even from the sale of the assets of such dealing member firm.

    According to the rules, the board of IPF upon the payment to any investor shall be subrogated to all rights of the investor against the dealing member concerned to the extent of such payment; and such subrogation shall include the right on the part of the board to recover an equivalent amount from the dealing member or from the proceeds of the sale of the assets of such dealing member.

    Such recovery from the dealing member firm or sale of the asset of the firm shall be paid into the Fund. Stockbrokers are mandatorily required to contribute to the IPF. Besides, the board of IPF is also empowered to invest the funds with a view to grow its capital base.

    The NSE had in 2012 inaugurated a nine-man Board of Trustees under the chairmanship of Deacon Gamaliel Onosode.

    Other members of the board included Chief Executive Officer of Nigerian Stock Exchange (NSE), Oscar Onyema; Misan Kofi-Senaya, managing director of Central Securities Clearing System (CSCS), Mr. Kyari Bukar; Chairman, Ibadan Zonal Shareholders Association (IBZA), Chief Sola Abodurin; Fubara Anga, Edosa Kennedy Aigbekaen, Sam Onukwe and Umaru Modibo.

     

     

  • Expert calls for innovation fund

    The Manager, Technology Innovation Centre (TIC), Mrs Julie Momah, has urged the Edo State Government to establish an innovation fund to assist young entrepreneurs.

    She made the call in an interview with the News Agency of Nigeria (NAN) in Benin, the state capital.

    Mrs Momah said such fund would go a long way in boosting innovation and commercialisationof research findings.

    An innovation fund, she said, would also enable upcoming entrepreneurs to be more focused and resourceful.

    She noted that “lack of finance is a major challenge that confronts young entrepreneurs and innovative ventures.

    “But if the state government establishes a fund, it will encourage innovators in the state.

    “Young people will then be able to develop their brains and put their ideas into positive use, which will ultimately divert their attention from crimes.

    “I know that in the next five years, our level of technological advancement in the state will be high if government can give attention to the right people and create favourable environment for the people to operate.”

     

  • N200bn SME fund: NDIC urges states, councils to float microfinance firms

    N200bn SME fund: NDIC urges states, councils to float microfinance firms

    The Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim has urged states and local governments in the country to float microfinance institutions in order to access the N200 billion Medium, Small and Micro Enterprises Development Fund (MSMEDF).

    Speaking at the closing ceremony of the 2013 workshop for financial correspondents in Uyo, Akwa Ibom State, Ibrahim explained that the fund for MSMEDF would not be effective in states with large rural areas and few microfinance banks unless there are banks to support the existing ones.

    “We continue to call on the local governments, the state governments to float and nurture sustainable MFBs in their areas so as to help the poor in their areas to have access to savings and to credit without which our strive for financial inclusion and poverty eradication will not be realized. Those states that obviously don’t have enough MFBs cannot easily access that N220 billion.

    “For instance, in Jigawa even as at today, there are less than five functional MFBs even though there is a brand new airport there. The Central Bank of Nigeria (CBN) has realized that it is important for state and local governments to be given the opportunity to float and nurture MFBs.

    “This is a new policy that has been agreed upon by the CBN and it is in the realization that MFBs cannot be left in the hands of Deposit Money Banks (DMBs) because the creation and sustenance of MFBs is a very serious developmental issue and the UNDP and some other developmental organizations have amply demonstrated that,” he said.

    He further said there is a direct link between the depositors and financial inclusion.

    “As you know we charge far less premium for MFBs. They pay far less and as we speak for the last couple of years, a lot of them have not been able to pay the premium they are supposed to and yet we have not closed them down for that and have not ceased to insure them.

    “This is because we feel they have to be encouraged and as a matter fact, the 103 MFBs that were liquidated two to three years ago a lot of them did not have enough money for us to pay their depositors and we had to resort into topping up from the premium we collected from the other banks”, he said.

     

  • Investors Protection Fund may begin operations in 2014

    Investors Protection Fund may begin operations in 2014

    The Investors Protection Fund (IPF) of the Nigerian Stock Exchange (NSE) may begin effective operations in 2014 as the board of trustees of the fund meets to work out the final details of operational strategies and rules.

    An impeccable source in the know of the impending meeting of the board of trustees told The Nation that the trustees would meet before the end of this year to conclude all arrangements for effective operations.

    According to the source, the fund is in the process of rounding off its rules and processes for compensation of investors.

    The source said the board of trustees had taken its time to ensure it laid a good operational framework for the fund before it starts assessment and compensation for claims on relevant losses.

    Part XIV of the Investment and Securities Act 2007 requires the Exchange to establish and maintain an investors protection fund to compensate investors with genuine claims of pecuniary loss against dealing member firms resulting from insolvency, bankruptcy or negligence of a dealing member firm of a securities exchange or capital trade points; and defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received by the dealing member firm in its course of business as a capital market operator.

    The NSE had last year inaugurated a nine-man Board of Trustees under the chairmanship of Mr Gamaliel Onosode. Other members of the board included Chief Executive Officer of Nigerian Stock Exchange (NSE), Oscar Onyema; Misan Kofi-Senaya, managing director of Central Securities Clearing System (CSCS), Mr. Kyari Bukar, Chairman, Ibadan Zonal Shareholders Association (IBZA), Chief Sola Abodurin; Fubara Anga, Edosa Kennedy Aigbekaen, Sam Onukwe and Umaru Modibo.

    The Board of IPF had prepared a new set of draft rules governing the operation and effective management of the fund on June 11, 2013. These rules were made available to stakeholders on June 14, this year to undergo stakeholders’ review up till June 21.

    Head, Public Relations, NSE, Mr. Dante Martins, had confirmed that the Exchange received comments from stakeholders and had made necessary amendments to the rules.

    Under the draft rules, IPF is empowered to take over the assets of insolvent or erring dealing members of the Exchange.

    According to the rules, where the IPF finds an investor’s claim to be genuine and makes compensation on that basis, the board of the IPF shall have the right to recover such amount from the concerned stockbroking firm, even from the sale of the assets of such dealing member firm.

    The board of IPF upon the payment to any investor shall be subrogated to all rights of the investor against the dealing member concerned to the extent of such payment; and such subrogation shall include the right on the part of the board to recover an equivalent amount from the dealing member or from the proceeds of the sale of the assets of such dealing member.

    Such recovery from the dealing member firm or sale of the asset of the firm shall be paid into the fund.

    The draft empowers the board of IPF to have at anytime a written policy on the maximum compensation payable to an investor who has suffered a loss. The board can review this maximum compensation limit from time to time according to prevailing circumstances at the market.

    The draft indicates that an investor whose claim is within the maximum limit may be paid the full amount of the loss, after deduction of any amount or value of all monies or other benefits received or receivable by the investor from a source other than the Fund in reduction of the loss.

    Besides, where the board is satisfied that in principle compensation is payable but considers that immediate payment in full would not be prudent having regard to other applications for compensation, or to any uncertainty as to the amount of the investor’s overall net claim, the draft empowers the board to pay an appropriate lesser sum in final settlement or to make a payment on account.

    It stated that the board may also determine to make a payment on account or to pay a lesser sum where the investor has any prospect of recovery in respect of the claim from any third party or through an application for compensation to any other person or authority.

    “The board may determine to reduce the compensation which would otherwise be payable to an investor in circumstances where it is satisfied that the investor is partly to blame for the loss which he has suffered,” the draft stated.

    Compensation would be paid subject to conclusive decision of the board on the basis of evidence that the investor has a claim against a dealing member, duly applied for settlement of its claim from the dealing member; the dealing member was unable or likely to be unable to satisfy the claim within a reasonable period and the investor then, duly applied for compensation from the Fund.

    According to the draft, an application for compensation may be rejected if it is not promptly made and in any event within the periods stipulated in the ISA or where the investor is responsible for, or has directly or indirectly profited from, events relating to the dealing member firm’s business which gave rise to the firm’s financial difficulties.

    The draft empowers the board to make payment of compensation based on the claim submitted to the NSE and verified by the NSE or claim submitted to the board of IPF and verified by it, according to relevant sections of the ISA.

    In the event of multiple claims, person who claims in a double capacity for himself and as the personal representative of a deceased investor will be treated in respect of the representative claim as if he were the deceased investor without prejudice to his own personal claim.

    Also, where a person claims for himself and as a trustee, he will be treated in respect of the latter claim as a different person.

    But where two or more persons in partnership have a joint beneficial claim, the claim will be treated as the claim of the partnership; otherwise each of them would be taken to have equal shares in the claim unless the contrary is proved to the satisfaction of the board.

    According to the rules, where an agent has a claim for one or more principals, the principal or principals are to be treated as having the claim, to the exclusion of the agent.

    To build up the IPF, the draft rules stipulate that all penalties and fines paid by erring stockbrokers for contravening capital market rules, regulations and market practices shall be paid into the IPF in addition to established contributions from stockbrokers. The board of IPF is also empowered to invest the funds with a view to grow the capital base of the IPF.

     

  • Nigeria, others get $12b private equity fund

    Nigeria, others get $12b private equity fund

    Private equity firms have invested about $12 billion in Nigeria, South Africa and other African countries. The firms have also raised almost $10 billion, a study by Ernst & Young and the African Private Equity & Venture Capital Association (AVCA), has shown.

    A private equity firm is an investment manager that makes investments in the private equity of operating companies through a variety of loosely affiliated investment strategies including leveraged buyout, venture capital, and growth capital.

    Often described as a financial sponsor, each firm will raise funds that will be invested in accordance with one or more specific investment strategies.

    The firms will raise pools of capital, or private equity funds that supply the equity contributions for these transactions and will receive a periodic management fee as well as a share in the profits earned from each private equity fund managed.

    Reuters report said many private equity firms are adamant that Africa is the next hot spot for the industry as its burgeoning middle class continues to bloom, but the pension and endowment funds who invest in private equity funds are more cautious.

    It is not hard to see what has attracted them to the continent. Over the last 10 years, Africa’s economic output has increased three-fold to $2 trillion and six African countries have been among the fastest-growing economies in the world.

    Principal at private equity firm Hamilton Lane, Daniel Schoneveld, told a conference earlier this month. And because of the uncertainty and many risks involved, many pension funds are hesitant.

    As Alona Ponomareva, principal portfolio manager for the World Bank Pension Plan, said: “Africa is kind of the last frontier for us. I am gradually taking us in the direction of Africa.”

     

  • Use excess crude fund to build roads, markets, says Ajimobi

    Oyo State Governor Abiola Ajimobi has directed council chairmen to use their share of the excess crude oil fund and the Millennium Development Goals’ (MDGs’) funds to build and rehabilitate roads, markets and health centres.

    Ido Local Government Chairman Prof. Joseph Olowofela spoke with reporters yesterday in Ibadan, the Oyo State capital, while inaugurating some projects.

    The projects include the Alexandra Junction-Bembo road; Oke-Alaro-Alexandra road, Apata; Kuola road linking New Garage, a neighbourhood market at Bode-Igbo and a motorised borehole.

    He said the governor’s directive showed that the administration was committed to the people’s welfare.

    Olowofela said: “We are getting our funds from the excess crude oil cash. We are not only building markets, we will build strategic roads, such as the Oloruntumo and Aba Nla roads. We will also do the front of Bembo.

    “I also mentioned the MDGs project. We are lucky that this local government is one of the beneficiaries of the MDGs programme. We are going to execute a project worth about N200 million, to be completed in four months.

    Olowofela is a former Head of the Physics Department of the Federal University of Agriculture, Abeokuta, Ogun State.

    The Baale of the Bode-Igbo, Chief Muraina Agbomeji, said: “This is what we have been expecting from the government and we thank God it has come to pass today through one of my sons, Olowofela. Some people said he is not from Ibadan because they are ignorant, but we, the elders, know he is truly from here. We thank the governor for making this happen.”

  • ‘Prominent Nigerians haven’t redeemed promises to relief fund’

    Several prominent Nigerians, who promised to donate to last year’s flood disaster fund in the presence of President Goodluck Jonathan, have not redeemed their promises, six months after, it was learnt yesterday.

    Ironically, among the defaulters are those enjoying the tax incentives attached to the financial pledges.

    A Presidential Flood Relief and Rehabilitation Committee, co-chaired by business mogul, Alhaji Aliko Dangote and frontline lawyer, Olisa Agbakoba (SAN), was put in place to administer the fund.

    It has threatened to publish the names of the defaulters should they fail to remit their promises on or before June 30.

    Advising the defaulters to respect their honour and integrity and pay up, the committee vowed to publish defaulters’ names in national dailies in the next three weeks.

    The 34-man Presidential Committee, which targeted N100 billion, held a fund raising dinner at the Presidential Villa, Abuja.

    On the occasion, donations and pledges made by prominent Nigerians amounted to N11.35billion.

    Dangote and the Federal Government led the list of donors with N2.5 billion apiece; Jim Ovia, Chairman of Visafone and Tony Elumelu donated N1 billion each.

    The Minister of Petroleum, Mrs Deziani Alison-Madueke, and her Telecommunications counterpart promised to mobilise indigenous oil companies and telecommunications firms for the fund.

    The companies, though invited, were absent at the dinner.

    President Jonathan announced tax incentives for corporate organisations that would donate to the flood relief fund, which is meant to alleviate the sufferings of Nigerians who were affected by last year’s floods.

    A statement in Lagos by the co-chairmen said the committee would publish the names of defaulters in the newspapers and other social media blogs, if by June 30 they fail to redeem their promise.

    The statement, titled: Public Notice: Redemption of Pledges, reads: “The Presidential Committee on Flood Relief and Rehabilitation expresses its profound gratitude and appreciation to all who answered the clarion call to be our brothers’ keepers through their generous donations and pledges at its fund raising dinner in November, 2012, for the relief and rehabilitation of flood victims in Nigeria. We thank you immensely.

    “As we proceed to the implementation stage of the planned rehabilitation projects, we hereby call on all those who have not redeemed their pledges to please do so on or before June 30, 2013, as a mark of honour and integrity. The names of defaulters will be announced in all national dailies and social media blogs.

     

  • Body chides AMCON on sinking fund

    Body chides AMCON on sinking fund

    The decision of the Assets Management Company of Nigeria (AMCON) to increase the contributions of banks to its Debt Redemption Sinking Fund from 0.3 per cent to 0.5 per cent is not good enough, the National President, Independent Shareholders Association of Nigeria (ISAN), Mr Sunny Nwosu, has said.

    Speaking in Lagos, Nwosu said the development, which has taken effect this January, will have undesirable effects on the performance of banks in the long run. He said when banks take 0.5 per cent of their total assets and put in the debt sinking fund of AMCON, the value of the assets would be impair as time goes on. According to him, the money will not only accumulate over a period of time, but would prevent the banks from using the money for more important and immediate needs.

    He said: “What purpose is the fund going to serve in AMCON vault?, he asked. It is going to be idle. Banks have a lot of projects to invest in on than allowing their money to be idle somewhere. Shareholders are looking for increase in their investment portfolios, and would not like a situation where by banks would be giving unnecessary excuses.”

     

  • Edo probes N50m electrification fund

    Edo State lawmakers have begun a probe into an abandoned N50m electrification project for Akoko-Edo Local Government Area.

    The probe followed a petition sent to the House by residents of the several communities under the auspices of Ikiran Oke, Ayanran, Ikakumo Electricity Completion Committee.

    In the petition signed by the chairman and secretary of the committee, Chief John Alaba Obasoro and Hon. Oyewole Samuel, respectively, the communities said the project was awarded during the Obasanjo administration and that the National Assembly approved the project sum in the 2012 fiscal budget.

    They alleged that only scanty numbers of electricity poles were dumped at the site and accused the Power Holding Company, Benin Zone, of diverting the funds to finance other projects in neigbouring states.

    But the Benin Zone PHCN Executive Director, Effion Umoren, who appeared before the House Committee on Energy and Water Resources said the project in question was handed over to him as a new project and not an on-going one.

    Chairman of the House Committee on Energy and Water Resources, Hon Michael Ohio-Ezomo directed Umoren, an engineer, to provide relevant documents on the said contract.

    He said the lawmaker would visit the site to assess the level of work done.

    Hon Peter Akpatason representing Akoko Edo Federal Constituency faulted claims of the PHCN authority that they completed the electrification of the 25 kilometers Unemen-Igarra Road and urged the lawmakers to tour all the projects in the communities.