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Banks’ Investment in SMEs to Hit N90 Billion

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  • Banks’ Investment in SMEs to Hit N90 Billion

Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria, has disclosed that banks’ contributions to the Small and Medium Enterprises Investment Scheme, AGSMEIS, and Agro-Business will hit N90 billion by December 2018.

Emefiele, who addressed the press at the end of the 10th annual Bankers Committee retreat, said national microfinance bank will be set up by the committee but in collaboration with NIPOST to offer low-interest credit to entrepreneurs across the nation.

“The AGSMIES fund by December this year will have N90 billion. That is part the funds that will go to support those that are going into farming or trading or those in music or fashion industry,” Emefiele said.

The governor said the recent shock to global economy has mandated the committee to tackle issues that impede exporters from accessing credit facility and enhance non-oil export.

He said: “This year, the theme of the retreat centered around export-led transformation of the Nigerian economy as an engine for sustainable, inclusive growth in Nigeria.

“For this year, we came and said, given the economic volatility and critical development in the Nigerian financial system, it is important that we renew our focus on non-oil exports that will help to catalise economic growth and also eliminate over dependence of our country on crude oil as a major source of earnings.

“We are saying there are challenges around, there are exogenous shocks happening in different parts of the world, which could ultimately constrain the capacity of the country to generate export revenues, particularly from crude oil and there is a need for us to think about how do we diversify our source of revenue earnings into non-oil export sector of the economy?

“We have decided to set up a committee headed by a bank chief executive officer. What that committee will do is to take a deep dive into some of the issues and challenges faced by exporters and then report back to our February 2019 meeting to raise some of the issues, and through that, the banks themselves will commit to ensuring that we deploy funds either on a commercial basis through banks or some of our intervention funds at the CBN to support this initiative.

“You will recall there was a time we contributed N500 billion to support export activities so as to boost export business and also help in generating export earnings into the country.

“We took a review and saw that that aspect has not really quite permeated the system and we wanted to hear from some of the export companies what their challenges were and that was the reason we set up the committee to look into these issues.

“But this time, we are determined that they will get the support they need and make it easy for them to get the credit but at the same time, put in place policies that will ring-fence the export earnings in a way that the funds come in and are used in a way that is beneficial to the economy.”

Explaining why it is necessary for the committee to set up a national microfinance in collaboration with NIPOST, the governor said: “The existing MfBs are doing their best but they are not lending at single digit interest rate.

“Some of them are even lending money on flat, where you borrow N50,000 from them for 90 days and they expect you to pay another N50,000 as interest in 90 days. That is outrageous and too exorbitant and we feel that if we have these funds available in the CBN, through our own National Microfinance, we can make access to funds easy, even if it is not single digit at 9.0 percent per annum, even if it is 15 percent, it is much lower than those borrowing money on what is called flat arrangement basis.”

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.

Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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