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Tag: loans

  • $29.9b loans: Senators set another hurdle for Buhari

    $29.9b loans: Senators set another hurdle for Buhari

    Public hearing demand likely

    Loans not a trap, says DMO boss

    Senators have put another hurdle in the way of the presidential request for approval to obtain  $29.9billion loans for infrastructure.

    Last week, the Senate threw out the request – on the grounds that it was not accompanied with how the loan would be used and repaid.

    President Muhammadu Buhari, according to sources, has secured the understanding of Senate President Bukola Saraki that the request will be reconsidered when re-presented, with details, expectedly this week. But  senators are pressing that the request should be taken for public hearing before approval, The Nation learnt.

    The public hearing clause is one of the conditions most of the senators have given Saraki before approving the loans.

    It was unclear yesterday whether the Senate President will accede to this condition.

    A source in the National Assembly said: “We are amenable to the re-presentation of the request for the loans by the President. The law or our Standing Rules allows it.

    “Most of us have however told the Senate President that we should subject the request to public hearing because the debts will be paid back in 20 years by the next generation.

    “Also, if ex-President Olusegun Obasanjo could secure debt relief of over $30billion, Nigerians need to be part of this latest decision to incur $29.9billion.

    “Some of us feel that if we throw the request open, we may get alternative ideas from Nigerians.”

    A first term Senator said: “We are pushing for public hearing to enable Nigerians scrutinise what the loans will be used for. We want them to buy into it.

    “Some of us will also be able to sleep well that the decision to obtain the loans has the backing of all Nigerians.”

    A ranking Senator said: “We are not opposed to a fresh request from the President but we prefer public hearing. I want a situation whereby I will be able to tell my children why the Senate supported the taking of the loans.

    “We cannot take things for granted again. The government said it will spend about N500billion on social investment but up till now, Senators, members of the House of Representatives and even governors are kept in the dark.

    “We do not know the shape of the programmes, how beneficiaries were drawn up and whether or not the teachers to be recruited are relevant to the need of each of the 36 states and the FCT.

    “If we are unsure of how N500billion will be spent, then we need to subject the $29.9billion loans to public hearing.”

    Another ranking Senator said: “Public hearing is not a must when the Executive needs loans. All we have to do is to refer the request to the Committee on Local and Foreign Debts, which is headed by Sen. Shehu Sani.

    “Our colleagues are demanding for public hearing but this will amount to double standards. When we got requests for loans from Edo and Lagos states, we did not conduct any hearing. We  considered the applications on merit.”

    “We will leave the discretion to the President of the Senate.”

    The President had said the external borrowing plan would be used for infrastructure, agriculture, health, education , water supply , growth and employment generation , poverty reduction through social safety net programmes and governance and financial management reforms etc.

    He said: “The total cost of the projects and programmes under the borrowing (rolling) plan is $29.960billion made up of proposed projects and programmes loan of $11.274billion, Special National Infrastructure projects $10.686billion, Euro bonds of $4.5 billion and Federal Government budget support of $3.5billion.”

  • Union cautions govt over proposed N25b car loans

    Automobile, Boatyards, Transport Equipment & Allied Senior Staff Association of Nigeria (AUTOBATE) has cautioned the Federal Government over its plan to float a car purchase loan scheme to help Nigerians acquire new made-in-Nigeria cars.

    The association said a well-mapped-out, clear and nationalistic guideline that would not short-change the beneficiaries at the end should be put in place.

    In a release, the association’s  National President, Edeki Osumah, said  caution should be taken to ensure the so-called investors, who cut costs only on workers, detest unionisation, promote outsourcing and casualisation did not exploit the opportunity.

    He said: “AUTOBATE understands the fact that the Federal Government is trying to promote a developmental policy, especially as the recession bites harder, but we feel that this should not be done at the expense of the struggling middle class, who really needs this kind of opportunity.

    “We call on the Federal Government to institute public-owned automobile industries so as to widen and deepen the expected development. Industrial standards should also be maintained. This is the safest line to lead in this world of economic downturn so as to promote collective prosperity and robust developments.”

    He  warned that the N25billion loan must not be left at the mercy of greedy bankers, who, according to him, take advantage of opportunities like this to divert funds to other investments, thereby frustrating the supposed beneficiaries.

  • Zenith Bank’s profit drops as bad loans rise

    Zenith Bank’s profit drops as bad loans rise

    Zenith Bank Plc witnessed declines in its top-line and profitability in the first half as the quality of the bank’s credit assets worsened. The proportion of non-performing loans to gross loans spiked up to 2.34 per cent by the end of first half 2016 compared with 1.44 per cent recorded in the comparable period of 2015.

    Zenith Bank’s share price dropped by 2.50 per cent to close at N15.60 per share as the much-awaited results filtered into the stock market.

    Key extracts of the audited report and accounts for the six-month period ended June 30, 2016 showed that gross earnings dropped by 6.23 per cent while pre and post tax profits declined by 12.35 per cent and 15.68 per cent respectively. Non-performing loans rose to N54.67 billion by first half of 2016, indicating addition of about N10 billion to the full-year classified loans of N44.9 billion.

    The report indicated that while gross loans and advances grew by 15.3 per cent during the six-month period, non-performing loans rose by about 22 per cent. Gross loans, which closed 2015 at N2.03 trillion, rose to N2.34 trillion by June 2016.

    The contraction in net earnings depressed earnings per share to N1.43 in first half 2016 as against N1.69 recorded in comparable period of 2015. The board of the bank has however recommended interim dividend per share of 25 kobo for first half 2016, retaining the same amount paid in 2015.

    Gross earnings closed June 2016 at N214.81 billion as against N229.08 billion recorded in first half 2015. Profit before tax dropped from N72.20 billion to N63.28 billion. Profit after tax declined from N53.18 billion to N44.84 billion.

  • Ambode’s loans

    All things being equal, the Lagos State government will from September, commence disbursement of N6.25 billion as loans to interested unemployed youths in the state.

    The fund according to the commissioner for Wealth Creation, BabatundeDurosinmi-Etti is to assist unemployed Lagosians to create wealthby setting up businesses of their own. And it is meant for everybody including artisans and traders.

    He said the creation of his ministry was on account of the huge number of unemployed youths in Lagos state and that Governor Akinwunmi Ambode had directed the fund to be made available to ‘everybody’. Consequently, interested individuals and groups have been advised to organize themselves for easy accessibility to the fund.

    Given the dire economic situation in the country and the high unemployment rate especially among the youths, the proposal by the Lagos State government to make some funds available to unemployed youths to set up their own businesses is very visionary and therefore worthy of commendation. It recognizes the problems in the continued harbouring of a large army of youths with no visible means of livelihood and the potent danger it poses for the peace and orderly conduct of the society.

    By making available the loans to the youths to set up their businesses, the government would have kept them busy as gainful partners in wealth creation, while at the same time obviating those ills associated with joblessness. It is therefore a worthy intervention to add value to human capital by making them worthy citizens. The larger benefits to society are enormous.

    Though details of the modus operandi of the fund are yet to be made public, there is no doubt that if properly managed, it will go a long way to create jobs for the army of the unemployed youths who daily roam the streets for lack of gainful unemployment. This will not only rob off very positively on the reduction of the sundry crimes that have come to buffet our urban centres but diffuse the potent threat to national stability which the subsisting situation portends.

    The Lagos State government is therefore on the right track for coming to terms with the reality that given its cosmopolitan nature with a burgeoning population, some form of direct intervention to have the youths engaged is a sine qua non for peace and stability of the state.

    Yet, as commendable as the project is, adequate care must be taken to ensure that the overall objective is neither defeated nor circumscribed by actions or inactions either on the side of prospective beneficiaries or those to be charged with its implementation. We say this because of the tendency for the fund to be sabotaged by the observed penchant of the average Nigerian to see such loans as free funds to service conspicuous consumption.

    Since the fund is said to be for all those who apply, it is only to be expected that the number of applicants will far outstrip whatever is available for disbursement.Yet, it is still a good beginning. What needs to be done is for the state government to come up with fool-proof criteria for authenticating the identity and other information to be supplied by prospective beneficiaries.

    In a clime where data on individuals is hard to come by, there is the need to work very closely with traditional institutions, market associations and the like to stand as guarantee for applicants. Also very relevant is the need to verify and monitor the kind of businesses the loans are to be deployed.

    It was in an apparent move to check these sources of abuse that the government warned that those who will supply false names and wrong addresses or divert the loans to frivolous activities such as weddings would be made to face the law. That is the way to go otherwise the good idea may be defeated by some of our ruinous dispositions and attitudes to anything that is of the civic realm.

    No doubt, there is the urgency to get the youths engaged through such intervention loans if we are serious in reducing the debilitating unemployment rate in the country. With the daily laying off of workers on account of the technical recession which our economic managers have admitted, governments both federal and state must seek out other alternatives of aiding the unemployed to engage in some form of self-employment. That will also involve conscious and concerted efforts to provide such supportive infrastructures as power, water, durable roads among others. At present, the current state of these social infrastructures is a serious disincentive to investment.

    Ours is a county where many are qualified to work and are prepared to work. Yet they cannot find any work to do. That is the irony of our situation. And we can continue with such a foreboding scenario with dire repercussions. The Lagos State government should work with great zeal and focus in determining artisans and traders genuinely intent in improving their fortunes and avail them of the loans.

    The initial disbursement of N6.25 billion should serve as a pilot scheme and experiences gathered from its implementation brought to bear in enhancing the overall success of subsequent disbursements. Closely linked to this is the ban on street trading which the state government has moved to enforce. A recent interview by some reporters on why street trading flourishes, highlighted such factors as the poor state of the nation’s economy, spiralling inflation, lack of sufficient capital to start off business, inability to pay for shops that are usually out of the reach of many, among others.

    The loans when properly managed and harnessed, will also partly address street trading which was outlawed since 2003 but has not been fully implemented because of the abject poverty in the land and the repercussions of having toexacerbate the situation. It was in an apparent realization of the yawning gap between the ban and the material conditions of the people that reservations have been made on its full implementation now.

    The government appears not unmindful of these reservationsas it has gone ahead to engage the public on the evils of patronizing street hawkers. The state Commissioner of Police, FataiOwoseni took up the challenge to sensitize the public on the dangers inherent in patronizing these street hawkers when he recently addressed the media.

    After enumerating the dangers associated with street trading such as robberies, sale of harmful and substandard goods and exposure to accidents, he admitted “We know the mood of the society and we want to balance our enforcement and that is why we are doing a lot of public enlightenment”. He has said it all.

    Owoseni raised another valid issue when he urged street traders and hawkers to form a formidable front and meet the government to create corner shops for them. That initiative should rather be taken up by the government as it will enhance the overall success of any eventual and full implementation of the ban on street trading.

    With the creation of the corner shops that are within the reach of the poor, youths who are lucky to benefit from the loans will have little problem adapting to the competitive business environment. By the same token, traders driven out of the street will find alternative and affordable places to do their business. So the corner shops are two sides of the same coin as they will not only enhance overall success of the utilization of loans but the crusade against street trading. Should we wait any longer to have them on stream?

  • CBN orders banks to review foreign currency loans

    CBN orders banks to review foreign currency loans

    •Naira falls to N334.50 on interbank

    The Central Bank of Nigeria (CBN) has directed banks to review and provision for non-performing loans denominated in foreign currencies.

    CBN Director, Banking Supervision, Mrs. Tokunbo Martins, who made this known in a letter to all the banks titled: Provisioning for foreign currency loans, said the exercise was in continuation of the regulator’s efforts to enhance efficiency, facilitate liquidity and transparency in the foreign exchange market.

    This is happening as the naira yesterday weakened to an all-time low of N334.50 against the dollar on the interbank market, a day after the CBN hiked interest rates to lure foreign investors back into local assets, traders said.

    The naira fell by 5.8 per cent from its opening rate, and $10 million was traded at the new record low. Traders said investors were pushing the currency lower to test the limit of how far it can fall, given a spread of almost 12 per cent between the official and black market naira rates.

    At the parallel market, the naira was, however, exchanging at N376 to dollar.

    “If we have more people trying to buy the naira then it should strengthen. I think we will keep seeing the trickles … I don’t think we will see large inflows until the fundamentals of the economy improves,” one trader told Reuters.

    On the foreign currency loans, Martins explained that the CBN issued the Revised Guidelines for the Operations of the Nigerian Inter-bank Foreign Exchange Market meant to liberalise the foreign exchange market and increase balances on foreign currency-denominated loans and advances in the books of banks.

    The target loans also include those that had been fully provided for under the previous exchange rate regime, but were yet to be written off, per our extant regulation under Section 3.21(a) of the Prudential Guidelines for Deposit Money Banks in Nigeria of July 1, 2010.

  • ‘How Osun farmers can access agric loans’

    In a bid to boost food production in Osun State and reduce the hardship that farmers go through in accessing agricultural credit facilities, the Osun Ajo Se Foundation, a non-governmental organisation (NGO), in partnership with Association of Grain Processors and Allied Produce Farmers of Nigeria (AGPAPFN), organised a seminar in Oshogbo, to educate farmers on how to take advantage of agricultural credit facilities.

    The state Chairman of AGPAPFN, Agboluaje Mudasiru, said farmers, who should be the beneficiaries of agricultural credit facilities were either unaware of existing loan services or do not have information on the terms of loans. He gave such terms as loan requirements, interest rates, loanable amount and mode of repayment.

    Sterling Bank Plc’s Southwest Agric Officer, Latona Olabode Felix, who represented the Group Head, Agric Finance, revealed that the bank is a major financier of agriculture in Nigeria and is ever ready to partner with major stakeholders–both private and public in the sector to bring about agricultural development in Nigeria.

    Olabode highlighted the various Sterling Bank Plc Agric Credit Schemes and how farmers can access them. He, however, advised them to always ensure that they have their farm records ready, adding that farm records are not only useful in managing farm budgets but will also be needed to determine if farms are performing well, as required when applying for agric loans.

    The Chairman of Osun Ajo Se Foundation, Mr. Benedict Olugboyega Alabi, who commended Sterling Bank for its contribution to the growth of agriculture in Nigeria, said agriculture still remains a mainstay of the state’s economy, adding that if well developed, will provide the majority of the populace with employment, income and food. He said Osun Ajo Se Foundation is keen to ensure that farmers in Osun State are empowered.

    Over 2, 000 farmers have registered with AGPAPFN.

    Osun Ajo Se Foundation is a non-political organisation established by some indigenes of Osun State for the unity and economic development of Osun indigenes worldwide.

    Olugboyega Alabi, Chairman of Osun Ajo Se Foundation is an indigene of Ikire in Osun State. He was the  Group President and Chief Executive Officer of Eliezer Group, the companies he started from nothing to be leader in facility management industry in Africa before leaving to pursue his interest in agriculture and empowerment of people through Osun Ajo Se Foundation

  • NDIC pushes for stiffer sanctions over non-performing loans

    NDIC pushes for stiffer sanctions over non-performing loans

    The Nigeria Deposit Insurance Corporation (NDIC) has expressed concern over the increasing wave of non-performing insider loans in various banks and its consequence on the stability of the banking system.

    Its Managing Director/Chief Executive, Alhaji Umaru Ibrahim, spoke while receiving the new President/ Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Prof Segun Ajibola and some of its executive members who visited the NDIC’s senior management in Abuja.

    According to Ibrahim, the rise in non-performing insider loans poses credibility questions which can erode public confidence in the banking system.

    He called for strict compliance with the code of conduct and a review of laws and regulations to provide stiffer penalties for directors who take advantage of their positions and failed to pay back their loans.

    The NDIC chief observed that casual workers accounted for about 25 per cent of the industry’s workforce,  which has a negative impacted the industry.

    Ibrahim lamented the practice of some banks that assign sensitive roles to casual workers, thereby exposing the banking industry to cases of fraud and forgeries.

    On rationalisation by banks, Ibrahim urged the banks to exercise caution to avoid industrial unrest in the industry.

    He urged the CIBN to intervene by advising its members on the aim of the rationalisation which should be to weed out bad eggs from the industry.

    He said the NDIC would continue to partner the CIBN and other professional bodies to achieve effective capacity building among its staff.

    According to him,  77 staff members of the Corporation  are undergoing the Bangor/CB MBA programme which started three years ago.

    The Bangor/CB MBA programme is an initiative of the NDIC, the CIBN and the Bangor University, Scotland where staff of the Corporation undergo up to 24 months training programme and graduate with dual certification: an MBA and Chartered Banker of Scotland.

    Fourteen members of staff had already graduated from the programme.

    He further requested the CIBN to fast track the accreditation of the Corporation’s Training Academy and the introduction of the deposit Insurance System (DIS) in the institute’s curricula in order to broaden the scope of professionalism in the banking industry.

    Ajibola praised the Corporation for its contribution to stability in the banking system.

  • BoI gives loans to corps members

    BoI gives loans to corps members

    As the National Youth Service Corps marked its fourth year of implementation of the Skill Acquisition and Entrepreneurship Development (SAED) scheme, the Bank of Industry has doled out N426, 796,078 to corps members under the Graduate Entrepreneurship Fund (GEF).

    The scheme, which swung into action in 2012, has sensitised 600,000 corps members, trained over 250, 000 and has churned out more than 2,000 established enterprises as well as employers of labour.

    The beneficiaries of the support fund were among 1,002 candidates sieved from over 3,100 applicants following an intensive screening and training across the country.

    Acting Managing Director, BoI, Waheed Olagunju, who spoke at the presentation of cheques during a SAED stakeholders meeting in Lagos, reiterated the bank’s commitment to bridging the gap between SAED and requisite funding. He noted that beyond deepening financial inclusion of corps members by equipping them for small business loans, it is also keen on sustainability of the businesses through effective monitoring.

    Olagunju said: “At the end of the training, participants were required to come up with detailed business plans and feasibility studies with vivid description of their business ideas, business models and implementation strategies. As at the deadline of February 15, 2016, for the submission of loan applications, 360 candidates submitted requests for an aggregate sum of N695.16 million spanning 27 of the 40 product clusters identified by BOI.”

  • Reps scuttle NNPC’s $400m refineries loans bid

    Reps scuttle NNPC’s $400m refineries loans bid

    •Refineries ‘lost N82b’

    The House of Representatives Committee on Privatisation and Commercialisation  yesterday stopped the bid by the Nigerian National Petroleum Corporation NNPC to acquire a $400 million loan for the upgrade of the four refineries in the country.

    The Hon. Ahmed Yerima- headed committee said the NNPC  was breaching Section 11 (g) of the Public enterprises ( Privatisation and Commercialisation) Act 1999, which gives the National Council on Privatisation (NPC) the power to do such.

    Members of the committee said the NNPC shoukd suspend outrightly the proposed restructuring/privatisation of the refineries because of the breach of the regulations in the Bureau of Public Enterprises (BPE) as well as the Presidency’s delay in inaugurating the National Council on Privatisation (NCP).

    The committee said it will formally communicate President Muhammadu Buhari on the need to adhere to due process and avoid the pitfalls in the commercialisation and privatisation exercises that were made in the past.

    The committee noted that breach of policy guidelines and extant regulatory framework and undue rivalry among government agencies is giving investors concern.

    According to NNPC document submitted to the Committee and obtained in Abuja, “in 2015, the refineries posted combined losses of N82 billion and processed only eight million barrels of crude in total.”

    At the meeting yesterday, the failure of the NNPC management to present documents showing the approval allegedly given by the President for the proposed improvement of the refineries’ capacity utilisation to 80 per cent within one year on the basis of the subsisting ownership structure, made members of the committee angry.

    Also the $50 million agreement signed by NNPC with a Chinese company, without any clear work plan got the disapproval of the lawmakers.

    Group Executive Director (Refineries) Anibor Kragah, who spoke for the NNPC, said the report on the privatisation of the refineries, was not true.

  • CBN sets aside N500b for loans to non-oil exporters

    CBN sets aside N500b for loans to non-oil exporters

    The Central Bank of Nigeria (CBN) is setting aside N500 billion (about $2.5 billion) for loans to non-oil exporters, after a slump in oil revenues led to the worst crisis in Africa’s biggest economy in decades.

    The Organisation of Petroleum Exporting Countries (OPEC) member, whose economy shrank 0.4 per cent in the first quarter, has been  hard hit by a slump in global oil prices as it relies on sales of crude for around 70 per cent of national income and 90 per cent of foreign exchange earnings.

    The CBN said it “will invest in a N500 billion debenture to be issued by Nigerian Export-Import Bank (NEXIM)” as part of a bid to diversify the country’s revenues away from crude.

    Nigeria was Africa’s top oil producer until a series of militant attacks on pipelines pushed crude production to a 30-year low. The value of its exports, mostly crude, plunged 52 per cent to N1.27 trillion in the three months to March from a year ago.

    It expects to nearly double its non-oil revenues this year to counter the effects of lost crude income.

    “The facility is essentially designed to redress the declining export credit and reposition the sector to increase its contribution to revenue generation and economic development.

    “It will improve export financing, increase access of exporters to low interest credit and offer additional opportunities for them to upscale and expand their businesses,” the apex bank explained.

    The bank said loans for up to three years would be granted at a maximum all-in interest rate of 7.5 per cent a year. Loans of more than three years will be granted at a maximum rate of nine percent a year.

    Much of the hard currency Nigeria needed to finance imports evaporated as the CBN burned dollars in an attempt to peg the naira at 197 to the dollar, which it gave up under new FX guidelines introduced on Wednesday.