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CBN Intervenes On MSMEs N48tr Funding Gap

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  • CBN Intervenes On MSMEs N48tr Funding Gap

Financial intervention is underway for 17.5 million Micro, Small and Medium Enterprises (MSMEs) operating in Nigeria, as the Central Bank of Nigeria (CBN) and the National Judicial Institute (NJI) have teamed up to dismantle their financial bottlenecks.

The numerous interventions notwithstanding, the CBN in collaboration with the NJI on Monday organised the first national workshop for judicial officers on Secured Transactions in Movable Assetss Act (STMA) and National Collateral Registry (NCR) themed: “Leveraging Movable Assets for Credit Delivery in Nigeria; Legal Regulatory Framework. This was done to acquaint them with the workings of collateral registry.

The CBN Governor, Godwin Emefiele, speaking at the event said the more than 17.5 million MSMEs in Nigeria, remain the catalyst of Nigeria’s economic growth, but are faced with the most commonly cited challenge of financial bottlenecks.

“Support for MSMEs’ financing is more critical now than ever given the need to boost Nigeria’s long-term growth trajectory since exiting recession in the second quarter of 2017.

“In real terms, our GDP grew by 1.8 per cent in the third quarter of 2018 compared with 1.2 per cent in the corresponding period of 2017. The observed growth was largely driven by continued improvements in non-oil sector activities such as agriculture, information technology, manufacturing, transportation and storage, trade and other services.

“About 96 per cent of enterprises operating within these sectors are MSMEs. These enterprises account for an estimated 48 per cent of Nigeria’s nominal GDP, seven per cent of export and about 84 per cent of workforce.

“Despite these contributions, however, MSMEs across the country continue to face structural drawbacks particularly due to their peculiar nature. Poor access to finance, high cost of borrowing, inadequate infrastructure, non-conducive business environment and weak capacity are some of the stylised challenges constraining their growth.” the apex bank Governor said.

The CBN put the existing financing gap in the MSMEs segment of the economy at $158 billion (N48 trillion).

Emefiele further said the N48 trillion financial gap was a reflection of the risk-driven apathy of financial institutions to lend to the MSMEs, adding that the statistics bring to view the urgent need for stakeholders to synergies, support and promote MSMEs through improved access to affordable finance.

Banking Sector

CIBN, NIBSS Introduce e-Payment Certification Programmes

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CIBN, NIBSS Introduce e-Payment Certification Programmes

The Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with Nigerian Interbank Settlement Systems Plc (NIBSS) have introduced professional certification programmes on electronic payments for financial service providers and institutions.

Both organisations disclosed that the programme was designed to enhance the electronic payment skills and knowledge of financial practitioners in order to equip them with efficient tools and information required to upscale innovation and services.

Speaking to journalists at a media briefing in Lagos, yesterday, the Chief Executive Officer, Chartered Institute of Bankers of Nigeria, Mr. Seye Awojobi, said the initiative is an international programme, well grounded in the local realities of the Nigerian e-payment industry and captures the current dynamics, as well as aspects of digital financial services practices.

“This programme would set the standards for e-payment expertise in Nigeria; foster a category of high performing professionals in the industry and build a resilient, safe and secured payment technology driven platform.

“The curriculum for the programme adequately covers recent methods required, which are in line with global practices.

“The introduction of the scheme cannot be more timely than now considering the COVID-19 pandemic, which created serious disruptions in our professional and personal lives,” he added.

On his part, Chief Executive Officer, Nigerian Inter-Bank Settlement Systems Plc, Premier Oiwoh explained that the introduction of the programme would determine the capacity and work experience criteria required to recognise beginners, intermediate and advanced.

“It would create a growth roadmap for fledging e-payment workers, including the unemployed who has the desire to make a career in the electronic sector.

“Also, it would enable us continue to tackle the issue of insecurity within the financial technology payment and banking space,” he added.

The institutions also noted that in order to maintain a certification credential, the practitioners must earn some recertification credits over a three year span and valid for three years after it has been issued.

The CIBN last week has reintroduced its mentoring scheme. The initiatives aims at up-scaling the leadership capacity and productivity of workers within the financial and banking sector.

Speaking during the virtual forum, Director General, Securities and Exchange Commission, Lamido Yuguda, had explained that mentoring schemes are essential for the sustenance and development of the sector as it is built upon values such as trust and professionalism.

“These values can be taught. But are reinforced when practiced by the senior co-workers and emulated by junior colleagues. Such initiatives enable workers to avoid being distracted by the material, prestigious and monetary incentives the space presents.

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Stanbic IBTC Offers Low-Interest Agric Loans

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Stanbic IBTC Offers Low-Interest Agric Loans

Stanbic IBTC Bank Plc has reaffirmed its commitment to the growth of Nigeria’s agriculture sector by supporting farmers and other players in the agricultural value chain.

As the demands on agribusinesses change seasonally, the financial institution provides financing solutions for agricultural enterprises to suit their requirements.

A statement explained that the needs range from availability of resources, to farming equipment, as well as enhancement of seasonal cashflow, amongst others.

Stanbic IBTC Bank offers various low-interest credit facilities across the agricultural sector that will help clients to cushion the impacts of the Covid-19 pandemic.

Speaking on this, Head, Agribusiness, Stanbic IBTC Bank, Wole Oshin, said the agribusiness financial solution was geared towards ensuring that players in the agriculture space are not hindered by lack of finance.

He said: “The bank’s suite of agribusiness solutions minimises risks, ensures maximum control and optimises profits associated with international trade by making transactions smoother, simpler and safer for all parties involved.

“Some benefits of the Stanbic IBTC Agribusiness Finance include: availability of gap-funding for unforeseen financial needs, maintenance of cash flow and flexibility of repayment terms based on the type of funding. This facility is also versatile and can be utilised for funding resources, vehicles and farming equipment.”

Oshin noted that agricultural enterprises could access overdraft to finance their short-term cash flow and working capital needs.

“With quick and flexible processes, funds are available when needed and interest is paid only on funds utilised, not on the full amount on which the limit is set,” he added.

He further reiterated that the asset finance solution could aid in the financing of all farming vehicle and implement needs, with a wide range of packages to suit business’ cash flow and tax requirements.

“Vehicles and assets such as tractors, harvesters, irrigation equipment and so on, to enhance production,” he said.

Other available facilities are Business Revolving Credit Loan, Agricultural Production Loan and Medium-Term Finance.

These are suitable for grain farmers, individual farmers, groups and entities in the agricultural sector. Our loans are designed to accommodate the purchase of various agricultural inputs (like seeds, fertilizers etc), livestock, agriculture-related products and asset acquisition.

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

FMDQ Securities Exchange has registered the Parthian Partners Limited N20 billion Commercial Paper (CP) Programme to its platform as part of its efforts to assist corporates access funds from the debt capital market (DCM).

The DCM has continued to witness significant activity among corporates seeking a viable avenue to raise capital to meet their financing needs.

According to the FMDQ, the registration of the CP programme strategically positions Parthian Partners Limited to raise short-term finance from the DCM with speed at a time in the future when it determines suitable, through CP issues within the CP Programme limit.

Parthian Partners provides competitive wholesale brokerage services in the African over-the-counter (OTC) markets, and trades in Federal Government of Nigeria (FGN)bonds and treasury bills, state government bonds, local contractor bonds, orporate bonds and eurobonds, providing regular market updates and liaising with market participants and regulators in the African markets to provide independent research on the African fixed income market.

FMDQ said in support of the growth and revitalisation of the Nigerian economy, it championed the resuscitation of the CP market to provide corporate and commercial businesses with the opportunity to meet their short-term funding requirements, whilst building their profiles within the Nigerian DCM.

“In addition to its commendable and efficient registration process, FMDQ Exchange, through its quotation service, will provide stakeholders and market participants with credible and real-time information as part of the exchange’s commitment to facilitate transparency in the fixed income market space,” it said.

Meanwhile, trading in the equities market closed in the green yesterday following buying interest in Zenith Bank Plc (+4.8 per cent), Flour Mills of Nigeria Plc (+6.2 per cent) and Guaranty Trust Bank Plc(+0.8 per cent). As a result, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 0.03 per cent to close at 40,164.86.

Zenith Bank Plc yesterday released its audited results for the year ended December 31, 2020, announcing a profit before tax (PBT) of N243.294 billion, up from N255.861 billion. Profit after tax (PAT) rose by 10.4 per cent to N230.565 billion from N208.843 billion in 2019.

Trading activity improved as volume and value advanced 16.8 per cent and 7.6 per cent to 338.0 million shares and N3.8 billion respectively. The most traded stocks by volume were FBN Holdings Plc (64.6 million shares), Zenith Bank (52.7 million shares) and Transcorp (42.0 million shares).

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