The Nation Newspaper

Tag: funds

  • CRR funds should finance real sector projects, says FirstBank CEO

    CRR funds should finance real sector projects, says FirstBank CEO

    The Group Managing Director/ Chief Executive Officer (CEO), FirstBank of Nigeria Limited, Bisi Onasanya has urged the Central Bank of Nigeria (CBN) on the need to commit Cash Reserve Ratio (CRR) funds to real sector projects.

    The CRR is a portion of banks’ deposits kept as reserve with the CBN to achieve monetary policy stability.

    The CBN pegged CRR at 75 per cent for public sector deposits and 15 per cent for private sector deposits. Over N2.3 trillion banks’ deposits are currently kept with the apex bank as cash reserve.

    Speaking at this year’s  Euromoney Conference held in Lagos,  Onasanya  said FirstBank has over N460 billion CRR fund kept with the CBN at zero per cent interest rate.

    He urged the apex bank to create avenues whereby some of the CRR funds will be diverted to funding Small and Medium Enterprises (SMEs) projects.

    “We need to find a way whereby those funds at the CBN will come back to fund lending to the real sector. The CBN could advise each bank, to for instance, increase its lending to SMEs by say, N100 billion, and  subsequently  release another N100 billion from the CRR pool to the lender when the lending is completed,” he said.

    Such step, he said,  would boost lending to the real sector and enhance economic development.

    The bank chief said FirstBank has the highest loan exposure to agriculture and that the lender has a working arrangement with the National Association of Small Scale Industrialists (NASSI), making it easier for it to lend to small businesses.

    Onasanya said the bank goes through due diligence to ensure that only the right entrepreneurs secure loans. “We focus on emerging businesses and also have strategic plan for SMEs. We need to find a process that ensures that the CRR funds help in lending to this sector,” he said.

    FirstBank of Nigeria Limited has in recent months, taken its SME Connect campaign to different parts of the country to assist small businesses overcome consistent challenges they face especially, in the areas of business plan writing, marketing products and services as well as accessing bank loans and documentation.

    The bank, he said, believes that SMEs are at the heart of national development, contributing greatly to the gross domestic product (GDP) of the country.

    Onasanya said FirstBank, as Nigeria’s leading SME,  is focused on empowering SMEs and their entrepreneurs in capacity building and development.

    Last November, the lender hosted the maiden edition of the conference themed: “SMEs at the heart of National Development: Creativity, Capacity and Capital”.

  • ‘Govt should provide more funds for public schools’

    The Federal Government should increase its funding of public schools, the Proprietress of Dartforte International Schools, Lagos, Mrs Titilade Ijiwole, has said.

    Speaking during a valedictory service of the school, Ijiwole said her position was hinged on her discovery that most parents find it difficult to send their wards to private schools because of financial challenges.

    According to her, many Nigerians still need public schools because the fees charged by private schools may not be easy for some to pay. Private schools, she stressed, try to keep high standard by ensuring school environment and workers are well equipped.

    “Quality education is expensive. Many of the big private schools are not making so much money as people tend to assume. The cost of equipment, infrastructure, staff recruitment, training and development is not as cheap as people presume. In fact, it is not wrong to ask government to support private schools too because it is done in Britain and other places,” she said.

    She said the government should make quality education affordable for all citizens because this is vital for development.

    Ijiwole added that Dartforte International Schools had just installed Closed Circuit Television (CCTV) to monitor movements around the school premises. She attributed the security measure put in place at the event to the security challenges facing the country.

    After, excited pupils performed various cultural dances and songs,  she said: “We want them to see Nigerian nationalities as one, Ijiwole explained. “It is important for the children to love the culture and tradition of people outside their own birth place. At Dartforte  International Schools,  we want our children to know, understand and appreciate our culture and tradition while at the same time we also expose them to latest developments in music, arts, science and technology from Europe and America.”

  • FirstBank’s Firstmonie to disburse MDGs funds

    FirstBank’s Firstmonie to disburse MDGs funds

    Firstmonie, the mobile banking service from FirstBank, has been selected by the Office of the Senior Special Assistant to the President on the Millennium Development Goals (MDGs), to disburse funds of Conditional Cash Transfer (CCT) programme aimed at increasing human capital development of the poor in the country.

    The CCT programme, which is specifically targeted at addressing the needs of qualified core poor households, would give them access to funds that will improve their lives and that of their children.

    It is designed to provide cash grants to the extremely poor and vulnerable households as a form of investment in human capital development in pursuit of Nigeria’s move to alleviate poverty in attainment of the 2015 deadline for the MDGs goals.

    Speaking on the development, Head, Mobile Financial Services (Firstmonie), Mike Ogbalu said: “We are delighted that Firstmonie has been selected to fulfil this noble cause of mitigating poverty and improving the lot of the less privileged in our society.

    “With our involvement in disbursement of the MDGs funds, it only implies that Firstmonie would also be helping to fulfil the objective of the CCT scheme, which is to improve the effectiveness of conditional cash transfer mechanisms to provide adequate incentives for extremely poor families to use available education and health services for children and pregnant women while increasing household consumption.”

    According to Mike, Firstmonie would be used to disburse  close to N3billion to 15,810 households 343 local government in 15 states of the country in the first tranche.  He added that funds will soon be made available for disbursement to benefitting households in selected states.

    “Each individual beneficiary under the scheme would be receiving N5, 000.00 on a monthly basis for 12 months with an additional N100, 000.00 upon acquiring the necessary empowerment skills training by MDGs. A total of N174.1million would be disbursed to each state. First  tranche of states to benefit from the scheme include: Abia, Adamawa, Anambra, Bauchi, Borno, Delta, Edo, Ekiti, Niger, Osun, Oyo, Plateau, Sokoto, Kano and the Federal Capital Territory (FCT).”

    Already, there are several Firstmonie agents’ points, excluding the bank’s branch agents, across all local government areas of the 15 states that the funds would be disbursed to. The agents would also be providing customer support services to beneficiaries in the selected areas.

  • Stanbic IBTC highlights benefits of mutual funds

    Chief executive officer, Stanbic IBTC Asset Management Limited, Mr. Olumide Oyetan, has advised retail investors to put their money in collective investment schemes, otherwise known as mutual funds, in order to safeguard their returns.

    Stanbic IBTC Asset Management Limited, a subsidiary of Stanbic IBTC Holdings Plc, will today launch a nationwide multi-media investor education campaign to improve penetration and awareness of mutual funds. The campaign is specifically aimed at publicizing the unique benefits of mutual funds, while demystifying the erroneous impression that mutual funds are only meant for the wealthy.

    Oyetan said there were numerous benefits associated with investing in mutual funds including the advantage of professional management of investors’ money.

    He noted that Stanbic IBTC’s experience and expertise are based on in-depth research that identifies unique opportunities designed to deliver on reasonable and consistent superior returns without taking undue risk.

    According to him, the concept of buying mutual funds allows investors to sit back, relax and outsource the management of their money to professional portfolio managers. The portfolio managers or fund managers then channel the money into investments in the appropriate assets class selected by the investor based on their investment objective, time horizon and tolerance of risk.

    He explained that mutual funds are similar to the way a co-operative schemes or the local thrift clubs, Esusu, Adashe or Ajo system are operated as many people pool their money together and invest the pool in purely or a combination of money market, equities, bonds or other assets.

    “With an initial minimum investment amount of N50,000, you derive the benefit of pooling other investors money to attract the most competitive interest rates available on sums in excess of N100 million that was hereto only available to big investors or institutions like if it was N500 million therefore achieve higher returns ordinarily available only to “institutional” investors,” Oyetan said

    He noted that as an industry leader, Stanbic IBTC Asset Management has a responsibility to help enhance awareness about mutual funds so as to enable Nigerians benefit from the opportunities derivable from investing in such instruments.

    He pointed out that Stanbic IBTC’s expertise and experience in asset and wealth management as well as corporate and investment banking garnered over many years, in addition to Standard Bank’s rich heritage, are pivotal in guiding investment decisions thereby ensuring that investors derive value from their investments.

    Mutual funds currently managed by Stanbic IBTC Asset Management include  Stanbic IBTC Nigerian Equity Fund; its flagship fund, Stanbic IBTC Ethical Fund; Nigeria’s first socially responsible quoted mutual fund which allows subscribers to make profitable long-term investments without compromising their religious beliefs and/or principles, Stanbic IBTC Guaranteed Investment Fund; a mutual fund that guarantees principal of investments after holding the instrument for a minimum of three months, Stanbic IBTC Balanced Fund; which allows investors benefit from a balanced combination of  equities and fixed income assets, Stanbic IBTC Bond Fund; which provides easy unrestricted access to Nigeria’s rapidly developing bond market, Stanbic IBTC Umbrella which consists of several distinct sub funds namely the Aggressive Fund, the Conservative Fund and the Absolute Return Fund which are traded as individual investment funds. The umbrella fund structure enables investors to invest in any one or a combination of the various sub-funds towards achieving their investment objectives and most recently the Stanbic IBTC Imaan Fund which is an investment where funds are invested only in businesses with high moral values. It’s for people with high ethical standard that conforms to their religious belief in some instance though open to the general public to invest in. The funds are invested in sharia compliant equity and non-interest bearing fixed income securities.

    Stanbic IBTC Asset Management Limited is a wholly-owned subsidiary of Stanbic IBTC Holdings Plc, while Stanbic IBTC Holdings Plc is part of the Standard Bank Group, Africa’s largest bank by assets. Standard Bank Group has been in operation for 151 years and has direct, on-the-ground representation in 20 African countries.  Stanbic IBTC Holdings Plc provides the full spectrum of financial services with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management.

  • ‘Proper project management key to accessing pension funds’

    ‘Proper project management key to accessing pension funds’

    There is a need for African governments to address the critical challenge facing the continent in managing projects financing and funding if they have to access pension funds to accelerate the implementation of critical high-impact infrastructure projects.

    The Acting Director-General, the National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu stated these at the just-concluded World Pension Summit, Africa Special in Abuja. It had as theme, “Shaping the Future.’’

    She, however, noted that given the size of pension fund assets in Nigeria and across Africa, there are real opportunities for policymakers to collaborate with pension professionals so as to effectively leverage these assets for sustainable progress.

    She said in Nigeria, the rate of growth of pension assets in relation to the Gross Domestic Product (GDP), has continued to rise from 1.47 per cent in 2006 to 9.57 per cent last year.

    According to her, the success of the contributory pension scheme has triggered an exponential growth in the pension funds and size of assets under management across the globe.

    She stated that the value of pension assets has grown from 1.47 per cent in 2006 to 9.57 per cent in 2013 of the national GDP.

    She added that as the population of retirement income provided by private pensions continues to grow, the regulatory framework designed to protect those funds becomes even more crucial.

    She said the theme of the summit thus underscores the imperative of institutionalising a risk-based approach to the supervision and control of pension markets across the continent.

    She said: “The risk-based approach focuses on the identification of potential risks faced by pension funds and strengthens mechanisms that are in place to attenuate those risks, which ultimately allows the regulatory agencies to channel their resources towards issues that pose the greatest threat to the stability of the industry.

    “Infrastructure development remains a key driver and a critical enabler of sustainable growth in Africa and the current favourable economic landsape on the continent provides a unique opportunity for the public and private sectors to collectively address the infrastructure gaps.

    “Focusing on Africa’s infrastructure challenges will indeed help in creating the economic pre-conditions needed for longer-term growth as well as to foster poverty alleviation. However, disruptive market, demographic, fiscal, and environmental dynamics are fundamentally reshaping Africa’s economic landscape. In this new reality, national governments must think of infrastructure, not in general but in the specific, understanding the ways in which different infrastructure sectors such as transportation, energy and water are governed, financed and sustainably delivered.”

  • UNIJOS seeks funds for new courses

    Vice Chancellor of the University of Jos (UNIJOS), Prof Hayward Babale Mafuyai, says that the university has to raise funds to be able to run the new courses it recently introduced.

    Mafuyai who disclosed this at a pre-fund raising media briefing on Tuesday, solicited for support for the programmes.

    “For the university to run these new courses effectively, it needs to rely on its friends and well wishers to raise funds with which to run the new course. The new programmes are in the Faculty of Veterinary Medicine, Engineering, Agriculture and others.

    Apart from the three new Faculties mentioned above, there are several other new programs being introduced by the University in a number of existing Faculties which include, Music in the Faculty of Arts, Dentistry in the Faculty of Medicine, Physical and Health Education as well as Integrated Science in the Faculty of Education, among others.

  • Sanusi on why SMEs can’t access fund

    Sanusi on why SMEs can’t access fund

    •Blames infrastructural limitations, others

    A number of factors from the complex to the superficial may be responsible for the inability of small and scale entrepreneurs to access funding for their businesses, the CBN Governor, Sanusi Lamido Sanusi has said.

    He spoke recently when members of the World Economic Forum (WEF), visited the CBN Headquarters in Abuja, as part of the build up to the hosting of the forum on Africa in Nigeria next year.

    According to the CBN boss, the question of access to credit is a big problem for small and medium scale enterprises (SMEs) and for micro enterprises.

    “Some people think it is the high rate of interest, of course, it is debatable. I think high rates of interest are a problem, but I think it is far more fundamental and goes to the point I am making which is that when you deal with credit in particular, it has got to sit within a broader ecosystem.”

    Expatiating, he said: “We cannot continue blaming the banks for not lending to SMEs. We have got to say, how much is the government spending on SMEs, how much investment is actually being done to create viable SMEs? They do not have electricity, they do not have infrastructure, they do not have security, may be the tariff regime or incentive regime is not fair, it is difficult to do business under these circumstances.”

    He was, however, quick to add that: “The attitude of the Central Bank or the banks is to say we cannot lend because those things are just not there. It is to say how we can interface with government to see that those things that need to be done are done so that we can lend. We have done that in agriculture for example.

    “We cannot lend to them, but we need to see how to interface with government so that we can see how we can solve this problem. We worked with the Ministry of Agriculture and fixed value chains and have encouraged the banks to increase lending to agriculture from less than one per cent to four per cent in two, three years and we would try to do that with the SMEs.”

    While reiterating that: “At the micro level, clearly funding is a problem, we have micro finance banks but the lending rates have become so exorbitant that what is supposed to help the poor is not helping them anymore. I saw an exhibition where there was a display by a micro finance banks marketing its loans to the poor and I said what is the rate of interest and they said two per cent a month. That would be 48 per cent and that for the poor is killing.

    “What we have done is set up a micro small and medium enterprise fund and signed a memorandum of understanding (MoU) with one of the state governments as the first and the idea is to make money available to micro finance institutions at very low rate of interest so that they can lend at low interest rates.

    “We try to work with the state governments because we believe that again micro finance needs to work within a developmental framework. So if you are lending N250,000 to a very poor woman, you need to give her training on how to use it, you need to give her education on how to manage her finance, you need to ensure that would have given her the skills to know how to manage her finance and be profitable.

    “You need to protect her against cultural issues, you need to ensure that if you lend to her, her husband is not going to take the money from her and blow it away and throw her into debt.

    “This is not what the CBN or the commercial banks or micro finance banks can do; it is going to work with the local authorities. And that is why we need local political authorities to assist.

    “These are all constraints, cultural issues, attitudes towards borrowing that we have to deal with.

    Lack of infrastructure, lack of training and so on and so we are working on that.

    On the N220 billion funds, he cited the case of Kano, in which the apex bank signed an MoU together. “The state will be responsible for repaying the N2 billion and it is at 9 per cent to them and then the state subsidises. So, the ultimate borrower will get money at no more than six or four per cent per annum and this compared to 48 per cent is a lot of money and this fund is available to them for two to three years,” he stressed.

    The fund, he emphasised, “Is stable, it is low interest and tied to a developmental agenda and 60 per cent of the fund is dedicated to women. So we are yet to have a census in all the villages, six out of ten of them must be women because we think you can’t really address poverty without laying additional emphasis on women who are more poor.”

     

  • SME Funds promises to boost renewable technologies

    SME Funds promises to boost renewable technologies

    SME Funds promises to boost renewable technologies. SME Funds, a group committed to alternative energy developmen,t has concluded plans to deliver clean cooking and renewable energy technologies to over 10 million households in Nigeria and other parts of West Africa.

    This is targeted at solving problems that many households encounter in meeting their domestic cooking needs in the region.

    The SMEFunds Cofounder and CEO, Mr. Femi Oye, who confirmed the development, stated, “People are hungry for good alternatives to kerosene and other unsafe, dirty cooking fuels.”

    He said, “We started with the simple belief that cooking shouldn’t kill. Why should our women cook with tears?”

    Oye also said, “Africa – SMEFunds ‘Green Energy & Biofuels’ (Nigeria) has been named the best clean energy investment opportunity in West Africa and overall Winner at the West Africa Forum for Clean Energy Financing (WAFCEF) Business Plan competition in Accra.

    He said the competition assessed business plans from all clean energy sectors across West Africa in two elimination rounds.

    The final round brought the top 10 companies among the 72 applications received to Accra where they were judged by representatives from major international organizations such as Leo Blyth (IFC, Lighting Africa Initiative), Musa Salah (EcoBank), Godfrey Mwindaare (Acumen Fund West Africa), Professor Joseph Adelegan (EBID), and Sander Smits van Oyen (SOVEC).

    Green Energy & Biofuels stood out due to the established track record of SMEFunds, innovative technology and the ability to scale quickly.

    The $28million Investment in the first round will go towards scaling up their renewable ethanol cooking gel production and clean cookstove manufacturing.

    Already, over 1 million liters of cooking gel has been produced locally using 2G Cellulosic Bio-Ethanol technology from wastes such as water-hyacinth and saw-dust from Lagos saw mills.

    SMEFunds has already recruited over 15,000 entrepreneurs through its Carbon Credit Network and helped them start green businesses that sell the cooking gel and stoves across Nigeria and West Africa.

    More youth and women stand ready to bring safer, stable green energy to their communities once the scale-up is reached.

    The Climate Technology Initiative Private Financing Advisory Network (CTI PFAN), the ECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE), and the Regional Clean Energy Investment Initiative (RCEII) of the U.S. Agency for International Development (USAID) and SEFA supported the competition.

    The business plan was assessed thoroughly after benefitting from a six month program which provided development and structuring, the preparation of bankable business plans and investor pitches from professional advisors, clean energy investors and commercial banks.

     

  • Don seeks more funding for creative industry

    Don seeks more funding for creative industry

    The Vice Chancellor, Federal University, Udufu Alike, Ikwi, Ebonyi State, Professor Ibadapo Obe, has charged federal and state governments to put in more funds for the expansion of the creative industry in Nigeria.

    Obe made this known at a two-day British Council Creative Industry Expo 2013 organised by the British Council, Nigeria, in collaboration with Enterprise Creative in Lagos.

    Tagged: ‘Capacity: The Building Blocks for a Competitive Creative Economy’, it brought together hundreds of youths, members of the academia, government agencies, entrepreneurs, civil society groups, actors, and other stakeholders across the country.

    Obe said that Nigeria has a huge capacity of young, innovative, creative, enthusiastic, creative minds that need support and encouragement in utilising their talent for the nation’s progress.

    He said: “I see shared power in our youths and when I look at it, I could see that if we can open up the box a little and incorporate the youthful enthusiasm, we are likely to solve lots of problems in the creative industry.”

  • How to access SME funds

    How to access SME funds

    Bukola Afolabi in this report shares useful tips on how small and medium scale entrepreneurs can access some of the intervention funds earmarked for the sector by the Federal Government through some of the quasi-governmental agencies like the Bank of Industry (BoI) and others

    According to a recent survey conducted by the National Bureau of Statistics and SMEDAN, the SME sector currently represents 97 per cent of the enterprises in Nigeria and employs over 32million Nigerians.
    But, it is, however, instructive to note that one of the major challenges that have limited the access of small and medium scale enterprises to credit facilities is their inability to present bankable proposals to financial institutions.
    Echoing similar sentiments, Ms. Evelyn Oputu, Managing Director of Bank of Industry (BoI), said the difficulties most SMEs face in their quest to secure funding for their businesses, is as a result of their inability to supply the right information required by banks to process their loans application.
    Having recognised this, the BoI has continued to organise series of capacity building programmes to empower owners of small businesses across the country.
    Thankfully, BoI under its paradigm shift launched in 2006 has continued to dedicate 85% of its resources to funding of the SME sector.
    In order to address the problem of lack of access to finance for the development of the sector, the federal government, through the BoI, has developed a counterpart funding scheme and currently has a partnership with 17 states, with more in the pipeline for next year.
    This scheme has generated a funding pool of approximately N9billion for MSME development.
    This new scheme being spearheaded by the Federal Ministry of Industry, Trade and Investment (MITI) is aimed at harnessing the vast opportunities in the MSME sector to drive inclusive economic growth through skills acquisition, entrepreneurship training, business financing, employment generation as well as wealth creation. And in order to harmonise all SME development activities across the country and achieve maximum impact, the Federal Ministry of Industry, Trade and Investment is promoting the establishment of SME council in all the 36 states and the Federal Capital Territory, Abuja.
    The SME council are structured to comprise relevant state government official, those of the organised private sector and representatives of SME promotion, development and facilitation agencies.
    ABC of accessing BoI funds
    BoI fund items like manufacturing, agricultural and so on. To access the Bank’s facilities, prospective applicants are required to take one of many steps.
    Among other things, an applicant is expected to submit a proposal by writing a formal application letter, completion of BoI’s questionnaire.
    Besides, applicant must produce a photocopy of Certificate of Incorporation, Certified True Copy of Memorandum and Articles of Association, form CAC 2.5(CO2) and forum CAC 2.3(CO7) of the company.
    Prospective applicants are equally required to provide the most recently audited accounts in the case of existing businesses in the last three years and a report of feasibility study, land and building documents with an unexpired tenure of 25 years minimum, statutory Certificate of Occupancy original copy for sighting, approved building plan, bill of quantities or contractors estimate\valuation report on building as applicable as well as a satisfactory tenancy agreement long enough to cover the tenure of BOI’s facility, in respect of suitable rented property.
    Other requirements include providing a proforma invoice for items of machinery and equipment from the source indicated in the feasibility report; enumerate price and source of raw materials, present a tax clearance certificate of the company along with names of at least two directors for the last three years, with eight recent passport photographs, international passport or driver’s license of each and that of the company secretary.
    In an interview with The Nation, a highly placed source at the BoI, who would not be named, said, “You can simply walk into any of our offices in Lagos, Abuja and the six geo-political zones across the country to access our loans. You don’t have to know anybody at BoI to enjoy our services.”
    Besides, BoI, there is also the Micro, Small and Medium Enterprises Development Fund (MSMEDF) which has been earmarked a proposed seed fund of N220billion, with a minimum of 60% (N132billion) of the Fund committed to providing financial services to women in order to address their peculiar financial exclusion challenges.
    Guidelines for accessing MSMEDF
    This guideline specifically sets out the modalities for operating the N132billion women component of the MSMEDF.
    The Fund’s two main objectives namely: social/developmental objectives/grants.
    10 % of the MSMEDF has been earmarked for administrative objectives in the following categories: Managing Agent’s Operational Activities of three percent (N3.96b) and Interest Drawback Programme of two percent (N2.64b).
    Details of the application of the grants
    A component that includes capacity building of staff of microfinance institutions (MFBs, MFIs and similar institutions) and their apex bodies on women-based lending has been built into the fund.
    Besides, microenterprises which have a mandate to manage 80% of the commercial component of the Fund have N95.04 billion while SMEs are expected to manage the remaining 20% of N23.76billion.
    Activities for which the PFIs can seek for facilities from the Fund shall include those for agricultural value chain activities, trade, cottage industries, artisans, services including: hotels, schools, restaurants, laundry etc and any other income generating projects as may be prescribed by the Managing Agent.
    The Fund shall be managed by a Special Purpose Vehicle (SPV) under the terms and conditions defined in the general guidelines for the MSMEDF. In addition the Department of the Fund that shall administer the Women component of the MSMEDF shall be headed by a woman.
    Requirements for Microfinance Banks/Finance Companies
    For a microfinance bank/finance company to be eligible for support from the Fund, it is expected to satisfy the following conditions as obtained from its latest CBN examination report:
    • Compliance with regulatory capital
    • Compliance with prevailing prudential ratios: liquidity 20%; capital adequacy ratio 10%; adjusted capital to net credit ratio; micro credit to other loans ratio; and 80:20.
    • Average deposit growth rate of 20 % per annum
    • Favourable profit trend for three years.
    • Risk management framework acceptable to the regulators
    • Corporate governance culture acceptable to the regulators and as indicated by number of non-performing insider-related facilities; degree of separation of ownership from control/management; adherence to sound ethical values.