The Nation Newspaper

Tag: LOAN

  • Sammy Ameobi joins Cardiff City on loan

    Sammy Ameobi joins Cardiff City on loan

    Newcastle United forward Sammy Ameobi has joined Championship side Cardiff City on a season-long loan.

    The 23-year-old scored two goals in 27 games for the Magpies during the last campaign.

    Ameobi has struggled for regular first-team action at St James’ Park in recent years, with the majority of his appearances coming as a substitute.

    “We’re delighted to have Sammy on board, having hand-picked him specifically for his creativity and skill,” Cardiff CEO Ken Choo told the club’s official website.

    “Sammy has Premier League experience to the tune of more than 50 top-flight appearances. We will continue to search for the right players who have specific skill sets and good character.”

    Ameobi won five caps as an England Under-21 international between 2011 and 2013.

  • N534m loan for Ogun cooperatives

    The Ogun State government, in collaboration with the Bank of Industry (BOI), has given loans worth N534 million to cooperative societies.

    Governor Ibikunle Amosun said this at the celebration of the International Cooperative Day, co-organised by the Ministry of Community Development and Cooperatives and the State Cooperative Federation Limited (OGSCOFED) with the theme “EQUALITY” Choose Cooperative, Choose Equality”.

    Represented by the Head of Service, Mrs. Modupe Adekunle, Amosun said about 108 cooperative societies in agricultural, non-agricultural as well as small and medium scale businesses have benefited from the loans.

    The governor has approved N500,000 annual subvention to OGSCOFED, she said.

    The President, State Cooperative Federation Limited, Abdulrazaq Ola Balogun, said the celebration was in recognition of the International World Cooperative Day, recommended by the International Cooperative Alliance (ICA) and the United Nations (UN) to showcase the benefit of the cooperative movement.

  • Lagos secures $200m World Bank loan to improve public finance, investment climate

    Lagos secures $200m World Bank loan to improve public finance, investment climate

    The World Bank Board of Executive Directors has approved $200 million credit to Lagos State to support a range of reforms pertaining to fiscal sustainability, budget planning, budget execution, and the investment climate in Lagos.

    A statement from the World Bank in Abuja yesterday, said the credit facility or ‘operation’ “will help sustain the state’s recent economic growth and poverty reduction, while continuing to deliver social services to the city’s expanding population.”

    The credit which would be sourced from the International Development Association (IDA), supports the Third Lagos State Development Policy Operation, is the last of a series of two development policy operations which aim to improve public finances and the investment climate in a fiscally sustainable manner.

    The statement said: “In the past decade, Lagos State achieved significant economic growth, improved its infrastructure and services, significantly reduced crime, and brought millions of people out of poverty.”

    According to the World Bank’s Jariya Hoffman, Task Team Leader for this Project “the operation’s focus on furthering improvements in the transparency of the budget system, effectiveness of public expenditures, and the business climate will help sustain the pace of economic growth and thus the state’s positive momentum towards income equality and the delivery of public services.  With enhanced budget transparency and efficiency, adequate funding can be shifted to programs to benefit the state’s booming population, especially the poorest families.”

    The World Bank added that “the operation will enhance the state government’s fiscal sustainability by anchoring the budget in a framework that accounts for key fiscal risks and improves revenue collection.

  • Delta Assembly approves N10b loan for Okowa

    Delta Assembly approves N10b loan for Okowa

    the Delta State House of Assembly has approved Governor Ifeanyi Okowa’s request for the restructuring of existing loan facilities.

    The Legislature approved the N10 billion loan from Zenith Bank Plc.

    In a letter yesterday to the Assembly, Okowa reminded the House of Assembly that during its inauguration on May 29, his administration met a huge bank and capital market debt of about N96.62 billion with a scheduled monthly repayment of N4.6 billion.

    The governor said there was another monthly repayment of Delta State Infrastructure Development Bond of N50 billion obtained by the former administration in 2011.

    He said the state had reached an unsustainable level of indebtedness, which was worsened by declining oil prices and low receipts from the Federation Account.

    Okowa noted that in a bid to free the resources for other development purposes, his administration resorted to restructuring existing loan facilities.

    The governor said the restructuring of the existing facility and obtaining N10 billion loan was consented to in principle, subject to the approval of the House of Assembly.

    According to him, the new approach would mitigate the harsh impact of the liquidity crisis in the state, reduce the time lag in the payment of salaries, pensions and overhead costs and ensure the take-off of some key projects.

    Okowa said the letter was meant to solicit the Assembly’s approval, adding that he would be glad to have its urgent consideration.

    The request was approved following a motion by Majority Leader Tim Owhefere and seconded by Samuel Mariere, representing Ughelli North I.

    The motion was unanimously adopted.

  • Stanbic IBTC to publish list of loan defaulters

    Stanbic IBTC to publish list of loan defaulters

    Stanbic IBTC said yesterday it will publish the list of loan defaulters in line with a new directive by the Central Bank of Nigeria (CBN).

    Stanbic IBTC would be among the first banks to publish such a list after the regulator ordered lenders in April to crack down on non-performing loans to forestall a repeat of a 2009 industry bailout that cost the government $4 billion.

    The new plan requires banks to give bad debtors three months to square their accounts, following which they would be named in the media and barred from taking part in currency and government debt markets in Africa’s biggest economy.

    Stanbic said in a statement that in addition to publishing a list of defaulters by the end of August, it would also use legal and other means to recover non-performing loans.

    While issuing its order, the central bank did not give an estimate of the level of non-performing loans held by banks. In 2009, the central bank rescued several banks that had lent mainly to the oil and gas sector just before crude prices collapsed, triggering a near-collapse of eight commercial banks.

  • Banks’ loans stand at N14tr, says Bankers Committee

    Banks’ loans stand at N14tr, says Bankers Committee

    •12.5m customers enroll for BVN

    The Bankers’ Committee yesterday said total bank credit now stands at between N13 trillion and N14 trillion, adding that three per cent of this huge credit is not performing.

    Addressing reporters in Abuja yesterday at the end of the Bankers’ Committee meeting,  Director,  Banking Supervision, Central Bank of Nigeria (CBN) Mrs Tokunbo Martins, said: “Total bank credit stands at between N13 trillion to N14 trillion; of this amount, about three per cent of that (N390 billion) is not performing. This  means that the industry is very sound.”

    According to her, industry threshold should not exceed five per cent, and since the bad debts are only three per cent of the total banking sector credit, the industry “is stable and the CBN is satisfied with that since bad debts have not crossed the threshold set.”

    The CBN director said she was aware that over 70 projects have so far been financed from the N220 billion MSME fund but that she does not have the details of banks that are not participating.

    She warned serial debtors that “the date is drawing close to publish names of serial debtors, by 1st August, banks will publish names of debtors and we urge debtors to pay up. “Also speaking, the Chief Executive Officer, United Bank of Africa (UBA) Mr. Philip Oduoza said 12,500 customers have so far enrolled under the Bank Verification Number (BVN) exercise which will end in a few weeks time. He said though this is encouraging, there is still need to do more  to close the gap before the deadline of June 30th this year.

    Oduoza warned that in the event that bank customers do not enroll they may lose certain banking services.

    Oduoza said:  “We have seen substantial enrollment to enable the unique bank identity which the BVN represents, customers who fail to enroll by 30th of June may not be able to enjoy banking services like getting credits, access to forex, their internet banking might be shut down.”

    He urged bank customers to enroll “because it carries you through the entire banking system.”

    Oduoza also said a “lot of progress has been made with regard to the cashless policy in the six pilot states and because of the success recorded, we are thinking of going nationwide by end-third quarter of this year.”

    Chief Executive Officer, Ecobank, Mr. Jubril Aku said the Bankers Committee has reviewed all the foreign exchange activities and looked at the supply side of forex activities and they were optimistic that both the “CBN and banks will meet legitimate demands.”

    He said the Bankers Committee was satisfied with the stability attained in the system and denied claims of speculation in the foreign exchange (forex) market, “because the open position limit of banks is very tiny. The market remains stable as every demand that has come in has been met and any demand not met has not come into the system.”

  • BoI unveils loan application tracking system

    BoI unveils loan application tracking system

    Bank of Industry (BoI) has introduced an online real time request platform to assist Small and Medium Enterprises (SMEs) to grow their businesses.

    The bank took this path to stem the failure rate of applications and the inconveniences encountered by business owners to come to their office to make requests.

    BoI Managing Director, Mr. Rasheed Olaoluwa, said: “We have come up with a loan tracking system in such a way that when you apply for loan we give you a code. We have also appointed 122 Business Development Service Providers (BDSPs) to help the businesses write good proposal that will attract loans from banks.

    “Our newly introduced SME Customer portal, where we have value proposals and contact details of all our customers. Currently we have data base for over 400 SMEs. This also makes for easier interaction amongst our customers where they can be encouraged to do businesses together.”

    He further revealed that BoI also has an online loan application portal and encouraged deserving businesses to take advantage of it as the bank in partnership with one of their consultants has modeled an SME mobile application demo to ensure business template models to assists prospective clients.

    Another BoI executive, Mr. Philip Ikhile said the dearth of SMEs has reached an alarming rate mainly due to poor accounting skills and IT illiteracy. To check the trend, he said a package that works for both accounting and non accounting business people that allows up to 20 sub titles, profit and loss account and indeed to keep track of income and expenditure of every business is up to their customers.

    He said for now it sells as a flash drive for N20, 000 but to encourage a lot of businesses to buy into it the bank, he said, is giving it out for N10, 000 for the first 100 businesses that will show interest. He said it is accounting made easy for small businesses to run efficiently to meet not only daily modern business demands but in compliance to international accounting profession ethics and demands.

    Executive Secretary, Nigerian Association of Small & Medium Enterprises (NASME), Mr. Eke Ubiji, commended the bank for the innovation and said it would help his members to stay in business.

    He also reiterated that many businesses have not grown because of the lack of requisite skill in financial literacy, information technology and funding.

    Ubiji said with his position in NASME he would spread the message to his members and encourage them to key into new technological models that would grow their businesses.

  • AFREXIM mulls $1b loan

    • May borrow in Renminbi

    The African Export-Import Bank (AFREXIM) is to raise over $1billion in bonds and loans in Renminbi, the Chinese currency, as trade with China rises.

    Bloomberg quoted Jean-Louis Ekra, president of the Cairo-based lender, as saying a Eurobond of between $400 million and $600 million might be sold this month.

    He spoke in Abidjan, Ivory Coast, where the bank opened its third regional office after Harare in Zimbabwe and Abuja.

    The firm will seek the loans from 35 banks later in the year, he said.

    “We want to help the regional economies grow by supporting the private sector. We plan to raise funds in the Chinese currency because of increasing trade between Africa and China,” he said.

    AFREXIM is considering borrowing in Chinese renminbi to take advantage of rising trade in Africa with China, which is the top trading partner of Africa’s five-largest economies, including South Africa, Nigeria and Angola. The lender, which started in 1993, is raising debt as borrowing costs on existing bonds drop to record lows and companies across sub-Saharan Africa issue Eurobonds to benefit from a global hunt for yield.

    Rates on AFREXIM’s $700 million of notes due July 2019 dropped 115 basis points, or 1.15 percentage points, this year to an all-time low of four percent last week.

    Companies in the world’s least-developed continent issued $2.8 billion of dollar-denominated debt in the year, the best start to a year since 2011, as investors take their search for returns further afield amid dwindling gains elsewhere. Interest in African debt is being driven partly by falling yields in other emerging markets, in turn spurred by record-low developed-nation interest rates.

     

  • Bank loan defaulters

    N138bn loss in one year is worrisome; CBN should wake up to its responsibilities

    We loathe a situation where the issue of bank loans default gradually becomes a Frankenstein’s monster which, rather than be nipped in the bud, becomes a romanticised item by the topmost hierarchy of the banking sector. Yet, the avoidable quagmire is not beyond redemption.

    In a report based on data obtained from the 2014 annual reports of banks, it was stated that loan default by bank customers created a combined loss of N138bn amongst 13 deposit money banks (DMBs) within the 2014 financial year. The losses purportedly incurred under their respective interest expenses, were usually charged against profits made in a financial year. The breakdown of the affected five Tier-1 banks as reported include, Access Bank Plc.- N11.7billion; First Bank of Nigeria Limited-N25.9billion; Guaranty Trust Bank Plc.- N7.1billion; United Bank for Africa Plc. N6.6billion; and Zenith Bank Plc-N13.1billion. Collectively, banks in this category incurred total loan impairment charges of N64.4billion.

    On another level, eight Tier-2 category banks also affected in the report with breakdowns of the amount owed them include: Diamond Bank Plc.- N26.4billion; First City Monument Bank Limited- N10.6billion; Fidelity Bank Plc.- N4.3billion; Stanbic IBTC Bank- N3.2billion; Sterling Bank Plc.-N7.4billion; Union Bank of Nigeria Plc.-N6.6billion; Unity Bank Plc.-N15billion; and Wema Bank Plc.- N0.1billion. Collectively, they have a total of N73.6billion credit losses. Again, the provision for the losses were made from charges against the income or profit made for a given period. This is huge when the loss of N138billion is spread across the 13 banks, it gives an equivalent of a scandalous over N10billion loss per bank.

    We realise the unstable nature of the nation’s environment that negatively impacts on businesses. Here, we are talking about things such as high interest rate of sometimes 28 to 30 per cent, unsustainably high foreign exchange rate and irregular government policies, among other risk factors. Consequently, it is not impossible that several industries/companies established with large chunk of credit facility might have witnessed avoidable difficulty; but we also know that most times, the required compulsory feasibility studies were not effectively conducted by designated bank officials while the necessary collaterals and insurance guarantee, in most cases of loan default, were handled with levity. And because the bank officers involved can make impairment charges recommendation without any definite sanction by the banks on the erring officers, that bad trend has become intractable.

    While we unequivocally call on the government to endeavour to improve the business environment, it is also pertinent to admonish the Central Bank of Nigeria (CBN) for its inefficient discharge of its supervisory role over the commercial banks. Additionally, it takes the banks so long to make this avoidable trend public simply because most officials of banks saddled with the responsibility of ensuring conformity to requirements and standards in loans granted, with the exception of natural business risk factors, compromised the process, thereby making their banks vulnerable to credit losses.

    This detrimental loan default has become a recurring decimal and a scandal in an economy like ours. The retrogressive trend that is gradually becoming a vicious circle is nothing but a manifestation of the case of corruption catching up with the banks, but with greater consequences on bank customers.

    Henceforth, we demand, like we had canvassed in numerous editorials on the subject, that the name and shame policy of chronic loan defaulters should be implemented without further delay. The CBN should set up a Credit Bureau as institutional/systemic checks to vet loan applicants so as to stop the criminal incidence of loan refinancing among banks, and to enforce standards across board on loan issues.

  • BoI gives N10b loan to 80 firms in Oyo

    BoI gives N10b loan to 80 firms in Oyo

    NO fewer than 80 firms and micro enterprises in Oyo  State have received loans worth N10billion from the Bank of Industry (BoI), its Managing Director, Mr Rasheed Olaoluwa, has said.

    He made this known at the inauguration of bank’s Western Regional Office and Oyo State office, at Iyaganku, Ibadan, Oyo State capital yesterday.

    Olaoluwa said: “The Oyo State government  signed a Memorandum of Understanding (MoU) with BoI in 2012, which culminated in the establishment of OYSG/BoI micro., small and medium enterprises, matching fund scheme to the tune of N10 billion. To date, the bank has recorded a total loan approval of N375 million in respect of 68 companies.

    “Oyo State is very central to BoI’s strategy of ensuring that our development finance services are brought closer to the people of the state, especially in our bid to vastly improve our services delivery efficiency, while also reaching out to all parts of the Southwest region.”

    According to him, additional disbursement to 17 other enterprises in the sum of N104 million is being processed.