Banking
Afreximbank, Sterling Bank Introduce Payables Finance in Nigeria
By Adedapo Adesanya
The African Export-Import Bank (Afreximbank) has partnered with Sterling Bank to introduce an innovative supply chain finance product called Payables Finance in Nigeria.
This product, branded as Afreximbank Tradelink, is one of Afreximbank’s digital offerings under the Africa Trade Gateway (ATG), which provides African corporates and commercial banks with relevant digital tools to access market information, connect with buyers and sellers across the continent for efficient marketing and procurement, facilitate Know Your Customer (KYC) processes, and promote trade payments between African countries in local currencies.
According to a statement, Payables Finance will enable suppliers to access financing from the banking system by obtaining early payment for invoices approved for payment by their corporate buyers.
The buyers continue to receive trade credit from the suppliers, and the suppliers finance their working capital through the early payment received, enabling them to grow their business. The financing cost is linked to the credit rating of the corporate buyers, thereby making this product particularly valuable for small and medium enterprise (SME) suppliers who may face challenges in accessing bank finance at competitive pricing.
“The partnership with Sterling Bank is a unique and innovative arrangement which leverages the complementary strengths of both institutions to provide a comprehensive market-led solution to Nigerian corporates and their suppliers,” the statement noted.
Under this arrangement, Afreximbank will fund corporates and banks in US Dollars and Euros while Sterling Bank will manage financing in Naira. Suppliers of Nigerian corporates can then benefit from financing in both local and foreign currency as per their requirements.
Mr Haytham ElMaayergi, Executive Vice President of Afreximbank Global Trade Bank, welcomed the launch as another milestone in realising the Bank’s vision of transforming Africa’s trade.
“Afreximbank identified supply chain finance as a solution for improving access to trade finance in Africa and embarked on a journey to increase penetration through financial intervention and capacity building. The bank’s Factoring Working Group has done extremely well to provide lines of credit to support factoring and has actively promoted factoring across the continent in collaboration with other institutions.”
He added that the introduction of Payables Finance is the next step on the bank’s roadmap for supply chain finance across Africa.
The launch in Nigeria will be followed by similar partnerships in other African countries to expand local currency financing capability across the continent in a phased manner. Adoption of the product will be supported by capacity-building events to increase awareness of supply chain finance and its benefits.
“African businesses now have the opportunity to harness the potential of this product, which has been widely adopted globally, at an accelerated pace by learning from the experiences of other regions and using the latest technologies which have been developed,” he explained.
Commenting on this partnership, Mrs Gwen Mwaba, Director & Global Head Trade Finance, Afreximbank said: “The launch in Nigeria is a first step in Afreximbank’s plans to introduce Payables Finance across Africa in partnership with leading African financial institutions.
“The product, which will deploy world-class technology and a collaborative delivery model and contribute towards the achievement of the bank’s strategic objective of reducing the trade finance gap in Africa, particularly for the Small and Medium Enterprises (SMEs) segment.”
Adding his input, Mr Chukwuka Onuaguluchi, Ecosystem Banking Head at Sterling Bank, said: “Sterling Bank is committed to meeting the trade finance needs of Nigerian corporates and their suppliers and we are proud to introduce this much-needed product in partnership with Afreximbank for the benefit of Nigerian businesses.”
By Modupe Gbadeyanka
Any bank caught supplying minted Naira notes to currency hawkers will have to pay a fine of N150 million, the Central Bank of Nigeria (CBN) has warned.
In a circular issued over the weekend by the acting Director of Currency Operations Department of the central bank, Solaja Olayemi, it was stated that it was becoming embarrassing that new banknotes are hawked at social events when most Nigerians are unable to get cash from Automated Teller Machines (ATMs) of banks or over-the-counter.
The banking system has witnessed shortage of cash for a while, with most ATMs not dispensing cash to customers despite efforts by the regulator to address the situation.
In the notice, the CBN said the distribution of freshly minted Naira notes illegally to currency hawkers will attract a penalty of N150 million per branch involved.
The apex bank disclosed that to curb the illegal practice, it has ramped up enforcement measures, including spot checks at banking halls, ATMs, and mystery shopping at locations linked to currency hawking.
“Any erring deposit money banks or financial institutions that is culpable of facilitating, aiding or abetting, by direct actions or inactions, illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes, shall be penalised at first instance N150 million only, per erring branch and at later instances apply the full weight of relevant provisions of BOFIA 2020,” a part of the circular stated.
The notice stressed the importance of banks strengthening their internal controls, particularly in cash management at branches and during teller operations.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
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