By Aduragbemi Omiyale
One of the things that help the economy of any nation is the provision of credit facilities to the different sectors and for many years, it has been one issue.
This was why the Central Bank of Nigeria (CBN) when worried that financial institutions were not carrying out their core function of lending to entrepreneurs, it mandated banks operating in the country to ensure their loan to deposit (LDR) is not below 65 per cent.
This was contained in a circular, BSD/DIR/GEN/LAB/12/070, to banks dated January 7, 2020, on the regulatory measures to improve lending to the real sector of the Nigerian economy.
Since the issuance of the regulatory directive and in line with its key strategic objective of driving economic growth in Nigeria, Stanbic IBTC Bank has increasingly focused on the growth of its credit exposures to the real sector of the economy.
The focus and concerted efforts of the bank’s management to ensure compliance with the regulatory directive of improving lending to the real sector of the Nigerian economy have been responsible for the growth in the risk asset portfolio for Stanbic IBTC Bank over the last two years.
The loan book increased by 18 per cent from FY 2019 position of N556.4 billion to N655.3 billion as at December 31, 2020.
The bank also recorded an increased loan growth by 30 per cent from the December 31, 2020 position to a gross risk asset position of N854.9 billion recorded as at September 30, 2021.
It is important to note that the risk asset growth of 18 per cent and 30 per cent recorded by the bank in FY 2020 and as at Q3:2021 remain significantly higher than the industry average growth of 18 per cent and 8 per cent in FY 2020 and as at Q3:2021, respectively.
Consequent upon the significant growth recorded in the bank’s risk asset growth in 2020 and YTD 2021, the bank has remained compliant with the CBN’s daily minimum LDR requirement of 65 per cent with an FY 2020 daily LDR average of 65.84 per cent and 2021 YTD daily average of 69.86 per cent.
It is important to note that the bank suffered no CRR debits by the CBN for non-compliance with the regulatory LDR directive over the period.
For the good record, it is also noted that the growth in the bank’s Cash Reserve Requirement (CRR) position from N369.0 billion as at December 31, 2020, to N462.6 billion as at September 30, 2021, has been largely on account of the monetary policy actions introduced by the CBN to rein in inflationary and exchange rate pressures in the economy.
In line with its price stability and monetary policy mandates, the CBN is saddled with the responsibility of managing surplus liquidity in the system and at various times over the period, the CBN has introduced special CRR debits to sterilize surplus market liquidity.
These special CRR debits which are over and above the minimum regulatory cash reserving requirement of 27.5 per cent of customer deposit growth have indeed been responsible for the growth in Stanbic IBTC Bank’s total and effective CRR positions which stood at N462.6 billion and 60.09 per cent respectively as at September 30, 2021.
Notwithstanding the financial constraints arising from the sterilized liquidity from the CBN, Stanbic IBTC Bank remains very liquid and adequately capitalized with liquidity ratio and capital adequacy ratio standing at 96.2 per cent and 15.7 per cent respectively as at September 30, 2021, and above the regulatory minimum of 30 per cent for liquidity ratio and 8 per cent for capital adequacy ratio.
Finclusion Group Rebrands to Enhance Offerings, Market Footprint
By Adedapo Adesanya
Finclusion Group has announced a brand integration across its markets to Fin, which will facilitate Fin’s planned expansion into new markets in 2022 and 2023.
As it gets a rebrand, subsidiaries in its core markets will also follow suit, including Fin Kenya (formerly: TrustGro); Fin Tanzania (formerly: Fikia Finance) and Fin South Africa (with its products now being SmartAdvance by Fin, NiftyCredit by Fin, NiftyCover by Fin, MediFin and e-Fin).
With this step, the company is consolidating its footprint across Africa under one identity and highlighting its ambition to be the leading international neobank across Eastern and Southern Africa.
The company is also announcing a further equity injection to fuel growth as it is adding $2 million in equity funding to its $20 million round raised earlier in the year. This funding is led by existing investors Mr Leonard Stiegeler, who is also joining the board of the company, as well as Mr Sudeep Ramnani and Mr Jai Mahtani.
The funding will be used to add new, fully-integrated territories to its business and develop new offerings, specifically in support of microfinance banks wanting to offer more financial services with the help of Fin.
In a statement, Fin said its mission is to enhance the quality of life of its customers through simple, convenient, and appropriate financial services. This is why the Fin team across Africa has chosen its new slogan, Simply Smarter Finance.
Speaking on this, Mr Tonderai Mutesva, Co-Founder and co-CEO of Fin, said, “This brand integration is an important step in cementing Fin as the leader in the neobanking space in East & Southern Africa. We have fantastic leadership and a strong team across our markets, and with our joint brand and platform, we will continue to expand.”
Like other neobanks, Fin is already active across the credit, insurance, BNPL and other financial services space and by presenting its services under one name, the company says it will ensure that its quality offering and customer support are instantly recognized.
Also, this brand integration will facilitate Fin’s planned expansion into new markets in 2022 and 2023 and highlight its quality services to microfinance banks in its markets. Fin will soon offer services to these microfinance banks to enhance their value proposition to customers by allowing for higher credit or better saving tools. The technology behind this offering will be known as Fin Connect and is supported by Fin’s earlier acquisition of the microfinance technology services provider, Awamo.
Fin will also continue to support adjacent businesses in the space through its venture portfolio. Fin Ventures is focused on funding entrepreneurs and startups in Africa within the credit and banking space. These ventures are independently run but can benefit from the company’s expertise. One such venture is mTek-Services, a leading digital insurer in Kenya.
Adding his input, Mr Timothy Nuy, co-founder and co-CEO of Fin, noted that “Fin has been created by a team with proven experience in the African fintech space. I am delighted that our platform can extend this expertise and useful financial tools to our partners.”
Cashless Policy: CBN Announces Fresh Cash Withdrawal Limits
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has placed new limitations on cash withdrawals from January 9, 2023, following the launch of the redesigned Naira notes by President Muhammadu Buhari last month.
In a letter seen by Business Post on Tuesday, all Deposit Money Banks (DMBS) and Other Financial Institutions (Payment Service Banks (PSBs), Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs) must not allow individuals and corporates to withdraw more than N100,000 and N500,000, respectively, while cheques above N50,000 shall not be available.
It noted that in line with the cashless policy of the CBN, all financial institutions must comply with the directives, which include, “The maximum cash withdrawal over-the-counter (OTC) by individuals and corporate organizations per week shall henceforth be N100,000 and N500,000 respectively.
The apex bank noted that individuals and companies intending to go above the fresh cash withdrawal limits should be ready to pay processing fees of 5 per cent and 10 per cent, respectively.
“Third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.
“The maximum cash withdrawal per week via Automated Teller Machine (ATM)) shall be N100,000, subject to a maximum of 20,000 cash withdrawals per day. Only denominations of N200 and below shall be loaded into the ATMs.
“The maximum cash withdrawal via point of sale (POS) terminal shall be N20,000 daily.”
In compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits are required for legitimate purposes, the apex bank noted that such must not exceed N5 million and N10 million for individuals and corporate organisations, respectively.
It noted that this should be subject to the referenced processing fees in addition to enhanced due diligence and further information requirements.
The CBN noted that the financial institutions are required to obtain the following information at the minimum and upload the same on a portal created for the purpose, including a valid means of identification of the payee (National ID, International Passport, Driver’s License).
Others include the Bank Verification Number (BVN) of the payee, notarized customer declaration of the purpose for the cash withdrawal, and senior management approval for the withdrawal by the Managing Director of the drawee, where applicable, as well as the approval in writing by the MD/CEO of the bank authorising the withdrawal.
CBN, Stakeholders to Check Rising Wave of Cyber Attacks
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has assured information security stakeholders and the general public of its commitment to curb the rising cases of cyber attacks within Nigeria’s cyberspace.
This was disclosed by the Director of the Payments System Management Department of the CBN, Mr Musa Jimoh, in his keynote address at the annual Information Security Society of Africa – Nigeria (ISSAN) Cybersecurity Conference in Lagos.
He stated that the apex bank was firmly committed to building a sustainable payments ecosystem in the country.
He also commended ISSAN for organizing the event, stressing that the apex bank will continue to collaborate with organisations that are committed to addressing the rising activities of cyber attacks.
Also speaking, the President of the FinTech Association of Nigeria (FinTechNGR), Mr Ade Bajomo, said to adequately address the rising rate of cyber attacks, organisations should embrace collaboration and information sharing on cyber breaches.
According to him, keeping silence on the part of organizations that had been attacked would not help others, stressing that full disclosure, synergy, and information sharing on reported cyber-attacks and how it was managed would guide other organizations to put preventive and countermeasures in place.
He also called on organizations to constantly upgrade their technology to counter cyber-attacks, urging them to have a data backup.
On his part, the president of ISSAN, Mr David Isiavwe, said the conference was devoted to further exposing the new threats and trends in the cyber security space and also offering practical steps on what businesses and individuals need to know and do to check the rising tide of the activities of cyber-criminals.
He observed that cyber attackers are getting more sophisticated globally, which is an aftermath of the COVID-19 pandemic, stressing that greater awareness must be created to minimize attacks on businesses that may result in losses by various organizations.
Further, Mr Isiavwe, who is also General Manager at Ecobank, made a case for customer awareness as well as a collaboration by all stakeholders.
ISSAN is a not-for-profit organization dedicated to the protection of Nigeria’s cyberspace, specifically and the entire cyberspace in Africa, generally.
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