- CBN Gives 310 Youths N930m to Start Business
A total of 310 youths, including members of the National Youth Service Corps, on Thursday received N930m from the Central Bank of Nigeria to establish profitable ventures in different sectors of the economy.
Each of the youth, who emerged through a rigorous competitive process, received N3m under the Youth Entrepreneurial Development Programme. The first set of the loans was disbursed through Heritage Bank.
Speaking at the disbursement ceremony, the Governor, CBN, Mr. Godwin Emefiele, said the YEDP was introduced in March 2016 by the apex bank as part of efforts to reduce the nation’s un-employment rate, which had increased to 13.3 per cent in the second quarter.
Emefiele, who was represented by the Deputy Governor, Corporate Services, Alhaji Suleiman Barau, said the programme was to ensure that the creative energies of the over 64 million Nigerian youths were harnessed to stimulate growth, address restiveness and promote economic development.
He said, “To realise this objective, the bank, in partnership with the National Youth Service Corps and Heritage Bank, began the pilot seven months ago to inspire and harvest the entrepreneurial abilities of Nigerian youths towards creating over one million direct jobs by 2020.
“The programme is open to youths of between 18 and 35 years who are serving corps members, graduates or artisans. All youths in this category are eligible to apply and will be pre-qualified for training on entrepreneurship before they can access credit lines of up to N3m at a single digit interest rate.
“The programme is premised on the provision of timely and affordable credit to identified youth entrepreneurs with expected multiplier effects on job creation and economic growth.”
He added, “To overcome the bottleneck of collateral requirements for loans and ease access to finance, their academic and the NYSC certificates, third-party guarantees and movable assets are allowed as acceptable collateral under the programme.
“The programme is a revolving fund with a target to create more than one million direct jobs. We encourage all Nigerian youths that are interested in being their own bosses to apply online through the participating banks.”
Emefiele said the central bank had commenced the YEDP with other Deposit Money Banks such as Sterling Bank Plc and Fidelity Bank Plc, adding that discussions were ongoing with other banks to open their portals for the programme in order to have a wider outreach and fund more small businesses.
The Managing Director, Heritage Bank, Mr. IfieSekibo, said the bank had received more than 7,000 applications for the second batch of the programme, adding that the lender would soon be meeting with the CBN to expand the reach of the programme.
Sekibo, who was represented by the Executive Director, Lagos & Southwest, Corporate Banking, Heritage Bank, Mrs. Mary Akpobome, gave an assurance that some issues raised by some of the beneficiaries would be addressed.
The Director-General, NYSC, Brig.-Gen. SuleKazaure, encouraged the beneficiaries to remain focused and ensure that the loans were repaid to make for the extension of similar facilities to other corps members.
Nigerian Banks’ Borrowings from CBN Surge 835% in a Month, Raising Liquidity Concerns
The Nigerian banking sector has witnessed an unprecedented 835% surge in borrowings from the Central Bank of Nigeria (CBN) in the span of just one month, igniting concerns over the nation’s liquidity stability.
Data reveals that banks’ dependence on the CBN has reached new heights, with their borrowings skyrocketing from a relatively modest N323.97 billion in August to N3.03 trillion in September. This remarkable increase underscores a growing reliance on the CBN’s support in times of financial stress.
This surge in borrowing activity has primarily been attributed to the CBN’s stringent monetary policies aimed at curbing inflation and managing the demand for foreign exchange. These policies have, in turn, squeezed commercial banks, compelling them to tap into the CBN’s Standing Lending Facility (SLF) for immediate liquidity needs.
Despite the escalating dependence on CBN funds, the Monetary Policy Committee (MPC) of the apex bank insists that the Nigerian banking sector remains fundamentally robust. MPC member Adenikinju Festus highlighted key indicators, including Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL) ratios, which still align with prudential standards. Furthermore, liquidity ratios have improved, and returns on equity and assets have risen.
However, the banking industry’s persistently high operating costs are raising alarms. In comparison to international standards, Nigerian banks are grappling with substantially higher operating expenses, prompting concerns about their long-term sustainability.
In a parallel development, the CBN’s Development Finance Department has disbursed a total of N9.714 trillion to various sectors of the economy over the past three years, with manufacturing and industries receiving the largest share at 32.6%.
Other sectors, including energy, agriculture, services, micro, small, and medium enterprises (MSMEs), export, and health, have also benefited significantly from these disbursements.
While the CBN remains committed to fostering sustainable economic growth, the surging dependence of Nigerian banks on short-term borrowings from the central bank is casting shadows on the sector’s long-term stability.
As Nigeria grapples with these liquidity concerns, the financial industry and regulators face the challenging task of charting a course towards a more resilient and sustainable banking environment.
Central Bank of Nigeria Postpones 293rd Monetary Policy Committee Meeting
The Central Bank of Nigeria (CBN) has announced the postponement of its 293rd Monetary Policy Committee (MPC) meeting, originally scheduled for September 25th and 26th, 2023.
Dr. Isa AbdulMumin, the bank’s Director of Corporate Communications, released a statement on Thursday confirming the decision.
In the statement, Dr. AbdulMumin stated, “The Monetary Policy Committee of the Central Bank of Nigeria has deferred its 293rd meeting, which was initially planned for Monday and Tuesday, September 25th and 26th, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”
While the CBN did not provide an official reason for the postponement, some industry experts suggest it may be related to the pending approvals for the newly appointed governor and deputy governors of the bank.
President Bola Tinubu recently nominated Yemi Cardoso as the potential head of the CBN. Additionally, Tinubu has endorsed the nominations of four new deputy governors for the apex bank, who are expected to serve for an initial term of five years, pending confirmation by the Senate.
The nominated deputy governors are Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor, and Bala Bello. However, the appointment of the CBN governor is contingent upon Senate confirmation, which is currently on a yearly recess.
The CBN assures stakeholders and the public that the rescheduled MPC meeting date will be communicated promptly as soon as it is confirmed.
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