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BoI Loans to SMEs Hit N13 Billion in April

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  • BoI Loans to SMEs Hit N13 Billion in April

As the House of Representatives Committee on Public Accounts awaits details of disbursements of loans to its customers by the Bank of Industry (BoI), it emerged at the weekend that as much as N13billion was advanced to small and medium enterprises (SMEs) by the bank as at April this year.

A highly reliable source at the bank, who released the figure recently, said that before May 2015, the bank’s loan to SMEs stood at N1.8billion annually, but it rose to N5.6billion in 2015, which was about 205per cent increase over the previous year’s figures.

According to the source, in 2016, the bank’s annual loan to SMEs increased to N8billion, representing 42per cent increase from what it gave it out the previous year. By April 2017, the loan advanced to SMEs, had increased to N13billion.

The House of Representative last week summoned the Managing Director of the bank, Mr. Olukayode Pitan over unanswered audit queries by the Office of the Accountant-General of the Federation. The 2014-2015 audit queries covered spendings totalling N11billion, out of which N8billion was on unrecovered loans and N2billion on unexplained expenditure.

Pitan, who assumed office in May, appeared before the committee on Friday after the committee threatened to issue arrest warrant on him, following his failure to appear in person after an invitation was extended to him by the committee.

He was however interrogated by the House committee members, who also directed him to make available a more detailed analysis of the bank’s activities including loan disbursements, repayments and actions initiated against loan defaulters.

The BoI, one of the development finance institutions (DFI) in the country, has a core mandate to provide financial assistance for the establishment of large, medium and small projects; as well as expansion, diversification and modernisation of existing enterprises and rehabilitation of ailing industries.

Chairman of the committee, Hon. Kingsley Chinda (PDP, Rivers) had insisted that the N8billion unpaid loan “was too huge to forgo as it threatened the purpose for which the DFI was established.”

The BoI boss however assured the committee that efforts had been initiated towards recovering the debt, even as he affirmed that some debts had actually been recovered.

He explained that some of the debtors had been dragged to court, while others have been handed over to the Economic and Financial Crimes Commission (EFCC) for defaulting in their obligations with properties in form of collateral were said to be with auctioneers.

But the committee insisted that the BoI chief should provide it with proof of the total amount so far recovered and a progress report of efforts towards recovering the debt as well as comprehensive report of litigation on the debt.

The AuGF had stated in its periodic audit report that about N8.4 billion paid to delinquent debtors was yet to be recovered.

He further requested for original copies of publication of the names of the debtors, copies of report to the EFCC and the list of the delinquent debtors and their statuses.

“Where N8billion debt is outstanding, the purpose for which the bank is established is threatened. Our interest is to ensure you survive because if you continue at this rate, you may not even have a job”, Chinda said.

He added: “In the banking system, we believe you have some safety measures before the loan is given out. We are concerned about the recovery of the fund and the survival of the bank.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

The Africa Digital Inclusion Facility Approves $1.3m Grants for Two Research to Enhance Women’s Digital Access to Loans and Micro-insurance

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The Africa Digital Inclusion Facility approves grants worth $1.3 million for two research efforts to enhance women’s digital access to loans and micro-insurance.

The African Development Bank has approved two grants for research that will increase African women’s access to a range of digital financial services including loans and micro-insurance.

The grants, for $1 million and $300,000 respectively, will be disbursed through the Africa Digital Financial Inclusion Facility, a blended finance vehicle supported by the Bank, to two financial technology firms, Pula Advisors Kenya Ltd., and M-KOPA Kenya Ltd.

Pula Advisors will use the $1 million for research of social, cultural and economic factors that impact women farmers’ access to micro-insurance in Kenya, Nigeria and Zambia. Research findings will inform the design and implementation of gender-centric insurance products. The project will be undertaken over a 3-year time frame.

“This grant funding will be used to leverage technology to develop innovative and responsive loan and insurance products that can spur productivity and inclusion, especially for our women smallholder farmers and traders.” said Sheila Okiro, the Bank’s Coordinator for ADFI.

The three-year project will have three phases: product development; piloting; and scaling; the outcomes are expected to benefit 360,000 farmers, 50% of them women, as well as boost farm yields by up to 30%. This will also raise incomes and enhance household and national food security.

M-KOPA will use the $300,000 grant funding for research involving 250 women and 250 men in Kenya’s Kisumu, Eldoret and Machakos counties. The company will assess the barriers to and opportunities for women’s access to digital financial services and financial literacy programmes via smartphone, and use the research insights to design a financial services app that is relevant to small-scale women traders.

The project, approved by the Bank on 9 February, 2021, will benefit women with no or limited access to financial services that run small informal businesses. Once developed, the mobile app will be used to pilot small loans to the women traders.

Both projects align with ADFI’s digital products and innovation and capacity building intervention pillars as well as its cross-cutting focus on gender inclusion, a thematic running across all its interventions.

The PULA grant approval meets African Development Bank strategic goals, including the Ten-Year Strategy, two High-5 priority areas—feed Africa and improve the quality of life for Africans— and the financial inclusion strategies of Kenya, Nigeria and Zambia.

The M-KOPA project is aligned with the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program that seeks to increase access to finance for women.

ADFI is a pan-African initiative designed to accelerate digital financial inclusion throughout Africa, with the goal of ensuring that 332 million more Africans, 60% of them women, gain access to the formal economy. The Facility was formally launched in June 2019 at the Bank’s Annual Meetings in Malabo, Equatorial Guinea. Current ADFI partners are the French Development Agency (AFD); the French Treasury’s Ministry of Economy and Finance; The Government of Luxembourg’s Ministry of Finance; the Bill and Melinda Gates Foundation; and the African Development Bank, which also hosts the fund.

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Banking Sector

FirstBank Boosts Cross Border Payment With FirstGlobal Transfer

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FirstBank Boosts Cross Border Payment With FirstGlobal Transfer

First Bank of Nigeria Limited has announced the launch of First Global Transfer (FGT) to promote the international transfer of funds across its subsidiaries in sub-Saharan Africa.

The bank, in a statement, said: “First Global Transfer (FGT) initiative is specifically designed to ensure safe, timely and improved efficiency in the transfer of funds across the network of FirstBank subsidiaries in Africa.

“The FGT is not restricted to FirstBank and FBNBank customers alone but it is also open to every individual resident in the country the funds’ transfer is originating from.

“Intending users of the initiative are to visit any of the bank’s branches in Nigeria or subsidiaries in Africa, which are: FBNBank DRC, FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, or FBNBank Senegal to enjoy the service.

“For example, with First Global Transfer, individuals and customers in Sierra-Leone can walk into any FBNBank branch to send money to FirstBank customers in Nigeria as well as FBNBank customers in Gambia, Ghana, DR Congo, Senegal or Guinea.”

Speaking on the initiative, Dr. Adesola Adeduntan, Chief Executive Officer, FirstBank said, “today’s customer is influenced by the technological advancement shaping businesses across various industries and our First Global Transfer (FGT) initiative is one of those advancement created to impact every individual in our host community in Africa, whilst promoting the ease and swift transfer of money from one country to another for business or personal activities.”

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Finance

Ecobank To Pay Customers N5 For Every Dollar Received

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Ecobank To Pay Customers N5 For Every Dollar Received

Ecobank has implemented the CBN scheme which offers N5 for every Dollar received into domiciliary accounts or as cash over the counter. Korede Demola-Adeniyi; Head, of Consumer Banking, Ecobank Nigeria, who announced this in Lagos stated that the decision is in line with the CBN directive and fully aligns with efforts to encourage the inflow of diaspora remittances into the country.

She noted that the “CBN Naira 4 dollar scheme” is an unprecedented incentive for senders and recipients of international money transfers.

Korede Demola-Adeniyi said that the scheme takes effect from 8th March and will run till 8th May 2021. “Ecobank will pay N5 on every Dollar so beneficiaries will not only get the foreign currency sent from their family and friends abroad, but they will also get extra Naira”, she stated.

Only recently, Ecobank had a first-of-its-kind virtual Diaspora Summit to discuss opportunities for Nigerians living abroad and the various platforms available to assist them with their investment decisions and remittance needs. The event had major players in the remittance space, diaspora audience, government officials and notable stakeholders in attendance.

Further, the Managing Director, Ecobank Nigeria, Patrick Akinwuntan has disclosed that apart from consistent engagement with Nigerians in the diaspora, Ecobank is leveraging its digital technology to make remittances to Nigeria and Africa easy, convenient and affordable.

Mr. Akinwuntan stated that growing evidence has shown a positive relationship between diaspora remittances and economic growth.

“Ecobank will continue to pursue its mandate of helping to enhance the economic development and integration of Africa, through the 33 countries where the bank operates on the continent. Ecobank’s Rapidtransfer and mobile app (Ecobank Mobile) enable Africans, wherever they are, to easily and instantly send money to bank accounts, mobile wallets and agent locations across 33 African countries”, he stated.

Ecobank Nigeria, a member of the Pan African Banking Group is committed to supporting Africans in the diaspora by providing advisory services, remittance solutions, investment options and financial planning schemes. The bank also offers mortgages, treasury bills, capital market instruments, among others.

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