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Debit Cards: Still Driving Financial Inclusion



Debit Card From Fraud

The last decade witnessed tremendous changes in the nation’s banking landscape. The number of bank customers has grown, agency banking has gained a foothold and cheques have given way to transfers, particularly through SMS banking and mobile apps. Debit cards, however, remained a constant feature during this period.

Debit cards are financial instruments issued by commercial banks to their customers to enable seamless transaction outside the banking halls. Debit cards have proven reliable in banking and other financial transactions. It is today acknowledged as a viable tool in the quest to drive financial inclusion in Nigeria.

Financial inclusion refers to a situation by which individuals and businesses can access appropriate, affordable and timely financial products and services. These products and services include savings, credit, insurance, equity and pension.

The objective of financial inclusion is to capture the unbanked into the formal banking space and ensure the availability of more financial products to the underbanked. As the World Bank notes, access to a transactional account is the first step towards broader financial inclusion.

Several initiatives have been deployed by the Central Bank of Nigeria (CBN) to drive these financial inclusion objectives, especially payments. Debit cards have proven a critical tool in driving financial inclusion in emerging markets such as Nigeria.

While debit cards were at some points the exclusive preserve of a few, it is today almost ubiquitous. This is due largely to the pioneering efforts of Interswitch Group to place debit cards in the hands of many Nigerians with the introduction of Verve card.

Verve card is not just a domestic card with lower transactional fees, it is highly secure and tailored to cater to the market nuances. It is not surprising therefore that Verve quickly captured an appreciable portion of the market.

Inevitably, as more Nigerians added debit cards to their wallets, information and knowledge about financial services, payment patterns and transaction history emerged. Infrastructure and technology to support the usage also expanded with the deployment of more payment channels across the nation. Interswitch ensured that the Verve card was compatible with a majority, if not all of the payment channels.

Today, with a debit card, cardholders do not have to travel to their banks’ branches to carry out most of their financial transactions. With a debit card, cardholders can make cashless payments for their purchases at the point of sale and small scale business owners can build transaction history with which they can access credit facilities and scale their businesses.

The debit card can be incorporated to underwrite insurance policies and provide various cover to the cardholder. Pensioners can use their debit cards to access their periodic pension payments after retirement. In some cases, the debit card is used as a form of electronic identity (eID). It can be used to access grants, and agricultural resources such as fertilizers, equipment lease, seedlings, etc.

Undoubtedly, debit cards are an effective force in driving financial inclusion.

As debit card payment transaction success increased, cardholders’ confidence grew. Subsequently, it became easier to convince others to come into the formal banking space to enjoy the convenience that the cards offered.

Verve’s intervention in the payment card space proved a game-changer. It became commonplace to see the blue-collar worker and the white-collared counterpart on the same queue to use the ATM. It was no longer strange to see the driver and his boss making payments using PoS at the stores. In the financial services space, debit cards are revolutionary.

Figures on digital payment from the National Bureau of Statistics and the CBN for Q3 2020 showed that digital payment figures for the period was N320 trillion, with ATM transactions accounting for a big chunk of the total transactions. This is not surprising with the significant increase in the use of PoS, USSD and card-based web payments.

The debit card is an enabler. Verve card is a leveler. While the debit card has empowered people to carry out financial transactions seamlessly, the Verve card has ensured that this easy, convenient and secured way service offering came within the reach of all Nigerians, who desired it.

Yes, there is more to be done. The regulatory is on the right path with policies aimed at strengthening and deepening the efficiency of the nation’s e-payment system. New players are emerging and there is an increase in the issuance of cards, both debit and credit. It is clear, agency banking is on the rise, the number of touchpoints are increasing and options are growing. The future of cards, at this time, appears secure and bright.

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We Have Done Well to Stabilise Nigerian Banking Sector—NDIC



Nigerian Banking Sector

By Aduragbemi Omiyale

The Nigeria Deposit Insurance Corporation (NDIC) says it has performed the duties of keeping the Nigerian banking sector stable since its inception about 32 years ago.

Chairman of the NDIC, Mrs Ronke Sokefun, disclosed that the agency has ensured that members of the public have a strong belief in the financial system in the country.

According to her, the NDIC, when necessary, provides financial assistance, technical assistance to Deposit Money Banks (DMBs), Microfinance Banks (MfBs) and Primary Mortgage Banks (PMBs).

She further said in addition, the insurer assists financial institutions with mergers and acquisition, purchase and assumptions, as well as the application of the bridge bank mechanisms.

“Besides deposit protection, prompt resolution of bank failure in Nigeria by the NDIC in its over 32 years of its existence has succeeded in steering the banking sector off systemic failure and collapse of public confidence, thus safeguarding the role of financial safety net,” Mrs Sokefun said on Thursday at the 2021 NDIC retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters in Lagos.

The NDIC boss noted that, “It is only when all these options could not rescue a bank that it is allowed to go into liquidation.”

She said so far, a total of 467 DMBs, MfBs and PMBs have been completely liquidated or undergoing the process of complete liquidation.

“As of date, 49 DMBs, 367 MFBs and 51 PMBs are either completely liquidated or undergoing the process of complete liquidation by the NDIC, following the revocation of their operating licenses by the Central Bank of Nigeria,” Mrs Sokefun informed the lawmakers.

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Otedola, Odukale First Bank Leadership Tussle Excites CBN



First Bank Leadership Tussle

By Aduragbemi Omiyale

The Central Bank of Nigeria (CBN) has expressed satisfaction with the power tussle between Mr Femi Otedola and Mr Taiwo Hassan Odukale, over who owns the single largest shareholding in First Bank of Nigeria, also known as FGN Holdings Plc.

The duo recently became a news item over the issue after it was announced that Mr Otedola was now the single largest shareholder in the financial institution. The company later released a statement, stating that Mr Odukale was the largest shareholder.

On Tuesday, after the last Monetary Policy Committee (MPC) meeting for 2021, the Governor of the CBN, Mr Godwin Emefiele, while addressing reporters, said the development was a testament to the positive decisions taken by the apex bank to keep First Bank alive.

A few months ago, the CBN sacked the board of FBN Holdings and First Bank of Nigeria Limited, its flagship bank, over a leadership tussle.

It was after the news that Nigerians knew that the central bank had been providing funds to the company as an intervention in order not to make it collapse because of huge non-performing loans (NPLs) bedevilling the organisation.

Justifying its decision to provide funding support to the lender on Tuesday, Mr Emefiele said First Bank, as the oldest bank in Nigeria, was too big to fail.

According to him, “If anything happens to First Bank, it means something has happened to the Nigerian banking system. That is why we are taking advice on how to get the bank afoot seriously.”

He then declared that First Bank was too big to be owned by an individual, adding that the tussle was good because “six years ago, as I said, because of an aggressive build-up of NPLs, the share price of First Bank was about N2. We took it up. Then, everybody was running away from the shares of First Bank.

“We have cleaned the balance sheet now, people are seeing that the money-making machine, First Bank, is back on its feet. They are in the race for profitability. They are now competing for the shares of First Bank. As of the last time I checked over the weekend, the share price was more N11.

“Why should I quarrel about that? “I am happy to see that they are competing for the shares. Of course, we all know that First Bank is so large that no single person can own it. In running the banks, they should see themselves as representing others.”

The leadership tussle between the two billionaires seems to have been put to rest after the clarification made by the National Pension Commission (PenCom).

First Bank had earlier said Mr Hassan-Odukale controlled a 5.36 per cent cumulative equity stake in the company through direct and indirect shareholding, stating that it was more than the 5.07 per cent holding of Mr Otedola.

Mr Hassan-Odukale’s stake rose to 5.36 per cent because of the addition of the stake of Leadway Pensure Limited, which he also has an interest in.

But PenCom explained that the shares of FBN Holdings purchased by Leadway Pensure belonged to Retirement Savings Account (RSA) holders and not Mr Hassan-Odukale because the funds actually belonged to a pool of investors, who are mainly Nigerian workers.

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Heritage Bank CEO Clinches Banker of Year (SMEs & Agric) Award



Heritage Bank CEO

By Modupe Gbadeyanka

The Managing Director and Chief Executive Officer of Heritage Bank Plc, Mr Ifie Sekibo, has been named as Banker of the Year 2021 under SMEs and Agric category.

The Heritage Bank CEO won this award at the New Telegraph 2021 Awards held recently in recognition of his leadership position in delivering sterling development and growth of the agricultural sector and the Small and Medium Enterprises (SMEs).

Receiving the award on behalf of the bank’s CEO, the Executive Director, Jude Monye stated that the bank was honoured and motivated to do more for the sustainability and growth of the Agric and SME sectors following the award received from the New Telegraph newspaper.

“We are highly honoured to receive the award as the Banker of the Year (SMEs & Agric) from the Board and Management of New Telegraph Newspaper.

“This validates the hard work and success story of the bank to create, preserve and transfer wealth across generations, as amongst other sectors of the economy, we have continued to ensure our efforts to support the Agric and SMEs sector in Nigeria counts.

“This is a result that will continue to motivate us to deepen our supports to Agric, SMEs sector and the economy at large for sustainable growth,” he assured.

Mr Sekibo vowed that in line with its core mandate to create and transfer generational wealth, the bank would continue to make farming profitable to stakeholders and attractive to the youth, as Heritage Bank had taken the front seat in financing critical agricultural projects in several states in the country, especially in Oyo, Kaduna and Zamfara and recently in Plateau Jos.

He noted that most of the ventures in the agriculture sector fall within the Micro, Small and Medium Scale Enterprises (MSME) sectors of the economy, which Heritage Bank in close collaboration with CBN has been championing.

According to him, in complementing the efforts of the Central Bank of Nigeria (CBN), Heritage Bank has made a huge success of the established agricultural schemes by making funds available to both small holder farmers and SMEs (Prime Anchors) in their efforts to increase agricultural output especially rice and wheat productions.

He explained that Heritage Bank has deepened support of small holders’ farmers and anchors in Ogun, Niger and recently Plateau state in rice and wheat seed and grain production under Prime ABP, which would help tackle gaps inherent.

“Heritage Bank in partnership with CBN is set to reverse the adverse trends by eliminating dependence on imported wheat which currently stands at over $2 billion and the unavailability of high yield wheat seed that stands at 63,000 MT through a strategic approach which would facilitate import substitution and promote self-sufficiency in the wheat value chain in Nigeria, by funding the local production of wheat and encouraging backward integration by wheat millers,” he stated.

Earlier, in a letter to congratulate him for his nomination as the Banker of the Year (SMEs & Agric) of the year 2021, the Managing Director/Editor-in-Chief of New Telegraph, Mr Ayodele Aminu, explained that, “after a thorough scrutiny of Heritage Bank’s laudable support for Small and Medium Scale Enterprises (SMEs), as well the country’s agricultural sector, in the last one year by our Panel of Judges and Editors, we at the New Telegraph 2021 are pleased to award Heritage Bank, Banker of the Year (SMEs & Agric).”

Meanwhile, Heritage Bank has recorded notable success stories in the Agric and SMEs’ spaces which in 2017 the bank won the maiden award from CBN for Sustainable Transaction of the Year in Agriculture.

In 2018, Heritage Bank emerged as a winner in the Agriculture Category during the year’s CBN Sustainable Transaction of the year award. The Nigeria Agriculture Awards (NAA), announced Heritage Bank as the Agric. Bank of the Year. According to NAA, Heritage Bank was selected in recognition of its footprints in the Agribusiness space.

In 2019/2020, Heritage Bank secured mandate as Transaction Advisers and Settlement Bank on Agribusiness and Solid Minerals to Lagos Commodities & Futures Exchange.

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