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Credit To Private Sector Increases By 6.68 Percent In 7 Months

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Godwin Emefiele CBN - Investors King

According to the Central Bank of Nigeria (CBN) Money and Credit Statistics, credit to the private sector gained 6.68 percent from N30.65trillion in January to N32.8trillion in July 2021.

But analysts said the increase in the private sector has not manifested in increased output, lower inflation, lower interest rates, improved Purchasing Managers Index and stock market performance as well as job creation opportunities.

While describing the growth in credit to the private sector as laudable, analysts stressed that the impact would depend on the sectoral spread, quality of credit, tenure of the funds and interest rate.

Meanwhile, the CBN Money and Credit Statistics revealed that credit to the private sector crossed the N32 trillion mark in May and since then, maintained growth.

According to the CBN, credit to the government rose by 5.3 percent to N12.13trillion in July from N11.52trillion in June.

Analysis of CBN numbers showed that credit to the private sector in seven months of 2021 appreciated by N2.19 trillion, a development some analysts say showed deposit money banks supporting the apex bank in lending to the real sector and creating jobs.

Further analysis of the CBN Credit Statistics revealed that credit to the private sector hits a peak of N30.19trillion in July 2021 amid the ease in COVID-19 lockdown.

According to the CBN statistics, Money Supply (M3) increased to N39.79trillion in July from N38.78 trillion in January 2021, while Narrow Money rose by 2.15 percent from N15.95 trillion in January to N16.29 trillion in July.

Further review of the CBN statistics showed that Net Domestic Assets (NDA) rose to N44.97 trillion in July, an increase of five percent from N42.95 trillion in January this year.

Some analysts contended that banks lending to the real sector played a critical role in the recent increase in Nigeria’s Gross Domestic Product (GDP).

The National Bureau of Statistics (NBS) had last week announced that Nigeria’s real GDP growth for the second quarter (Q2) of 2021, came in at a 5.01 percent Year-on-Year (YoY) increase.

Announcing the GDP figures, the bureau said: “The YoY performance was mainly supported by the Non-oil GDP component, as it grew 6.7 percent y/y compared to the 6.1 percent YoY contraction in Q2:2020. This was on the back of the strong growth recorded in Trade (22.5 percent YoY), Transportation & Storage (76.8 percent YoY), and Manufacturing (3.5 percent YoY) activity sectors amidst full re-opening of the economy.”

Commenting on the impact of private sector lending to Small and medium-sized enterprises (SMEs), Head, Retail Investment, Chapel Hill Denham, Mr. Ayodeji Ebo opined that there has not been a major credit to SMEs aside from the government intervention.

Ebo said banks lending towards government bonds, and Commercial papers and corporate lending increased recently.

On his part, an Economist & Private Sector Advocate, Dr. Muda Yusuf said the growth in credit to the private sector is laudable, stressing that the impact would depend on the sectoral spread, quality of credit, tenure of the funds and interest rate.

He explained further that: “The CBN has done a lot in lending to agriculture, but the quality of the lending is an issue. Reports indicate high default rates in agricultural credit, especially the anchor borrowers’ scheme.

“Monetary intervention is imperative for real sector development. But it is not sufficient to guarantee the desired outcomes of growth and productivity. The context in which businesses are operating is as important as the funding, if not even more important.

“The totality of the investment environment must be right for sustainable real sector development to be achieved. Therefore, to complement the credit to the private sector, the other factors that should be reckoned with include infrastructure quality, especially power, roads and railways.”

He added, “There are also issues around the quality of the regulatory environment, the foreign exchange policy regime, the ports situation, volatility of the naira exchange rate, the tax environment and the security situation. These are not things monetary intervention can solve. It takes an impactful fiscal policy intervention to fix these problems.

“Some of the issues border on economic reforms that need to happen. Engagements between the private sector stakeholders and policymakers are critical to achieving sustainable development of the economy.”

Speaking from a different perspective, the President, Association of Capital Market Academics of Nigeria (ACMAN), Prof Uche Uwaleke said the increase has no noticeable impact on the real sector, which concerns the production, purchase, flow of goods and services.

He stated that “While inflation rate in June trended marginally downward, available evidence regarding the other metrics does not indicate any significant impact of the increase in private sector lending on the economy.”

He suggested that, “For impact to be noticeable, it needs to be sustained and scaled up, especially targeting critical sectors of the economy with job creation potentials such as SMEs.”

The Governor of CBN, Mr. Godwin Emefiele in his communiqué at the end of July’s Monetary Policy Committee (MPC) meeting said the committee noted that broad M3 declined to 2.02 percent in June 2021, compared with 2.99 percent in May 2021.

According to the CBN boss, “This development was largely driven by a slowdown in the growth rate of Net Domestic Assets (NDA) and Net Foreign Assets (NFA). Net Foreign Assets contracted by 3.65 percent due to the contraction of foreign asset holdings of the central bank, as well as non-interest, primary mortgage, and microfinance banks. The marginal decline in Net Domestic Assets reflected the slowdown in aggregate credit net, which decreased to 4.30 percent in June 2021, from 4.79 percent in May 2021.”

A member of the MPC and the Deputy Governor, Operations at the CBN, Folashodun Shonubi, in a statement had said, “Growth in credit to the government and credit to private sector reflected the impact of various measures by the CBN to promote the flow of credit to drive economic activities.”

Shonubi added that: “I believe the CBN’s interventions through the aggressive provision of credit should continue as a complement to the ongoing effort by the fiscal authority to boost economic activities.

“As the government act, more decisively to discourage bad behaviour and restore orderliness, we must collectively work to overcome the insecurity challenges. At the same time, we must begin to tighten to deal with the subtle monetary component of inflationary pressure and curb spiraling inflation, without suffocating economic growth.”

The apex bank in its statistics also disclosed that currency in circulation increased by nearly three percent from N2.74trillion in June to N2.81trillion in July.

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Finance

With Giants Campaign, FirstBank is Truly Woven Into The Fabric of Society

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Olusegun-Alebiosu-MD,CEO Firstbank

In its usual creative conjecture, 13O-year-old FirstBank, has hit the airwaves and other media outlets with various visuals to articulate its new campaign ‘The Giant in You’. Breaking down the central message, ‘there is a giant in you’ the campaign stylishly reminds the bank customer that ‘FirstBank Puts You First so you can’ before giving the match order, ‘Live the Giant-Life.

For a bank that settles for the big ‘elephant’, as logo and has remained strong for 130 years, worlds like giant, tall and strides, used in the various visuals are simply validations of its robustness, endurance, doggedness and tall ambition. As part of the ways to convey the bank’s message to its array of patrons, SO&U, the creative agency behind the campaign cleverly selected its cast and buildings, including FirstBank’s corporate headquarters, to reflect the bigness, the tallness and the boldness of the 130-year-old financial institution to rule the world as far as banking and business support are concerned.

Unraveling the ‘Giant’ strides…

Among other reasons, the new campaign must have been conceptualized to position FirstBank as a ‘giant’ and ‘future-ready’ institution that is dependable, innovative and proactive in supporting its customers and stakeholders win in the race to the future and be in a position to take advantage of the opportunities and possibilities of that emerging future.

Driven by the conviction that  consumers want to turn their big dreams into giant successes, the new campaign reminds the consumer that in today’s world of constant disruptions and integrated experiences, the customer needs a strong, stable and supportive partner, with the appropriate platforms, innovative solutions and networks to not only support their aspirations but also be responsive and adaptive enough to anticipate their needs and empower them to success.

Looking through the visuals and the television commercial, it’s easy to conclude that the campaign narrative is not about the brand but the customer. For instance, the creative path illustrates the world as it moves and changes at lightning speed, the customer is reminded that just like the world, everything within it is also changing, from economies to businesses and even opportunities.
“We recognise that to be in sync with the world will require a forward thinking and future ready mindset …and we have created the atmosphere, products and services to help our customers,” the bank stated.

To underscore ‘the big idea’ and the ‘bringing out the Giant in you’ theme, key visuals speak to the essence of the campaign and are accompanied with long and straight legs in a demonstrative form to take the purported giant step. Here the messages are passed under the following; ready to take giant strides?, strides into the future, let’s take giant strides together, stand tall, stand out, think giant solutions, among others.

Facts and figures…

Like Coca-Cola, the world number one brand, one other thing that has consistently worked for the FirstBank brand is that the promoters have never, for once allowed complacency to set in. The implication of this is that the bank is not only the oldest, but also one of the most digitally compliant banks.  Currently, First Bank stands tall via First Bank digital solutions, employs market-leading digital platforms and solution driven products and services. Besides, the use of AI and Robotic Process Automation (RPA) by the bank enables the financial brand to initiate 85 percent of its transactions via digital platforms leading to quick responses to customers’ needs and satisfaction. In this regard, FirstBank has been recognised by Interswitch as the first financial institution in Nigeria to achieve 100 million sustained monthly transactions in electronic payment and it has hit N1 trillion transactions through the FirstMonie Agent network.

Speaking during the unveiling of the new thematic brand campaign, Head, Brand and Stakeholder management at FirstBank, Yinka Ijabiyi, reiterated that FirstBank came up with the new campaign because of its belief that there is a ‘giant’ in every customer, every employee and every stakeholder.

He said, “This campaign was informed by our belief that there is ‘giant’ in every stakeholder a giant dream, a giant possibility, a giant idea, a giant life and a giant future waiting to be birthed. Our commitment is therefore to provide all necessary business support, financial know-how and platforms to bring out the giant in every customer.”

Ijabiyi further pointed out that the campaign was conceptualised by the bank in a bid to show customers in its 130 years, that it has been supporting and creating giants and that it has no plan to stop anytime soon.

He said the bank, in its celebration of its 130 years in business, came up with a campaign that speaks to the business essence of its brand which is making giants of its customers.

“We have always done it and the fact we have been around for such a long time means good to everybody as we have been supporting businesses, individuals and government in those years. “We are making giants and there is no business that interacts with us that does not see the benefits in their business. We are making giants in our customers and we will not stop.

“We are the partner with tailored solutions for every customer, employee, and stakeholder. We have what it takes to turn dreams into giant successes. FirstBank’s services are designed to help customers “giant-size” their dreams, offering businesses the platforms and solutions needed to grow, innovate, and achieve remarkable success.” Ijabiyi added that the array of products, solutions and services offered by FirstBank cannot be compared with any financial services in Nigeria.

For its customers, the bank said “We would enable, inspire and support you with our world of financial services to help you to giant-size your dreams and live your best life”. It also said it “would give businesses and business owners the right platforms and solutions they need to grow, initiate and execute bold ideas.

Meanwhile, the creative agency behind the campaign has hinted to the media that the unveiled materials were mere ‘tip of the iceberg’ as efforts are ongoing to domesticate the same campaign in local languages to connect with customers across the major ethnic groups in Nigeria.

A peep into the past…

When the promoters said First Bank was “truly the first, many grudgingly agreed. But deep inside its competitors – the possible grudging camp – is the truth regarding the extreme distance the bank has given others in performance and people relevance of its operations! They knew the bank was not bluffing. Not only has it rediscovered itself, but the ability to shed its ancient mindset in terms of operations and blend with modern trends in banking have left many agreeing that perhaps, the saying that the older the wine the better it gets in taste actually applies to FirstBank. To this end, it’s not by accident that First Bank has produced at least two former governors of the CBN and a Finance Minister, including Chief Joseph Sanusi and the current Emir of Kano, Sanusi Lamido Sanusi.

Perhaps the current campaign is an offshoot of a story-telling Television Commercial, by the bank to reflect the beginning of modern banking and how the bank has consistently grown with Nigeria’s enterprises through partnership and innovation.

The referenced TVC says it all: A combination of historical renaissance and quite prescient validation of the innovation that usually drives its bewitching communicational ads. From the groundnut pyramids of the north, which was the symbol of the regions commercial edge and the cocoa bean mountains of Western Nigeria to the rubber plantations of the East and Mid-eastern region, First Bank has applied its new campaign to remind its decades-old patrons, customers, and even competitors, that the beat has refused to abate.

Throughout the campaign, FirstBank subtly registers itself in the minds of the banking public that it’s entirely Nigerian – past, present, and the future. The well-crafted historical simulation captures how FirstBank opened its first branch in Lagos in 1894 and started helping merchandise and local traders to grow their businesses. The excitement and enthusiasm on the faces of the bank’s early customers after getting their cash books from the Lagos office say it all. Like someone who has gotten a glimpse of what the future holds with banking, the customers express surprises and happiness. The commercial captures the mood and goes back in memory lane on how the bank has helped many people succeed in their ventures. Subtly, the narrator takes viewers to Kano and reveals how the then richest men in the commercial city were making their deposit of 20 bags of Silver in an atmosphere that looks like the first operational day of the bank.

Perhaps the beauty of the commercial lies more in the way it strikes a balance between the ancient and the modern days through setting and swapping of background colours. This was cleverly explored in referencing the way the bank transformed into an online haven, driven by technology. While reminding the patrons of the bank’s transformation and technological advancement, the narrator is quick to talk about the expansion of the bank beyond the shores of Nigeria to the West-African region and beyond. The TVC also positions FirstBank as a socially responsible brand by touching on various initiatives it has embarked on. Specifically, First Bank’s contribution to Sports through its support for football and athletics is captured very well.

The ‘Giant in You’ is another chapter as the bank begins a fresh journey after operating for 130 years.

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Banking Sector

Jaiz Bank Boosts Chairman’s Income to N24m Amidst Strategic Expansion

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Jaiz Bank

Jaiz Bank has announced a 20% increase in its chairman’s annual income to N24 million.

This decision was unveiled in a recent statement filed with the Nigeria Exchange Limited, highlighting the bank’s commitment to rewarding leadership amidst its expansion plans.

The bank, renowned for its pioneering role in non-interest banking in Nigeria since 2012, also approved a remuneration package of N20 million for each non-executive director.

The announcement was made by the bank’s secretary, Mohammed Shehu, highlighting the importance of competitive compensation for board members who provide crucial oversight and strategic guidance.

Shareholders at the Annual General Meeting (AGM) expressed confidence in the board’s leadership by approving the resolution on directors’ fees.

This move aligns with Jaiz Bank’s ongoing efforts to enhance its capital base to N70 billion by the end of 2024.

The bank also announced a dividend of 4 kobo per share, which will be distributed to shareholders on July 16, 2024.

This dividend declaration was welcomed as a testament to the bank’s operational success in a challenging economic climate.

Also, the AGM saw the re-election of Muhammadu Indimi and Muhammad Abdulmutallab as non-executive directors, reaffirming shareholder trust in their leadership capabilities.

Jaiz Bank’s financial performance has been impressive, with a 67% increase in profit before tax, reaching N11.1 billion in 2023.

Gross earnings also rose by 42% to N47.2 billion from the previous year, showcasing the bank’s successful growth strategy.

As Jaiz Bank continues to expand its services, the enhanced remuneration package signals a commitment to maintaining strong governance and leadership, paving the way for future achievements in ethical banking.

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Finance

ARISE IIP and Africa Finance Corporation Launch US$ 100M Capital Pool for African Entrepreneurs

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ARISE IIP, the pan-African developer and operator of world-class industrial parks, and Africa Finance Corporation (AFC), the leading infrastructure solutions provider in Africa, today announced the signing of a Memorandum of Understanding to establish a dedicated US $100 million capital pool for African entrepreneurs who are establishing operations within any of the Arise IIP Special Economic Zones (SEZ) in Africa. 

At the heart of this partnership is a shared vision to uplift African entrepreneurs by providing them with much needed financing and advisory services to catalyse growth.

AFC will also actively seek financing from Export Credit Agencies (ECAs), local and regional financial institutions to mobilise funding to support these companies.

This concerted effort underscores ARISE IIP and AFC’s commitment to fostering industrialisation, job creation and economic prosperity in Africa.

Under this partnership, AFC’s comprehensive suite of financial services will extend beyond financing to include financial advisory support for corporate finance, equipment financing and market entry including assisting with joint ventures and technical partnerships for sponsors that may require it, to ensure they are well-equipped to seize opportunities and thrive within the SEZs.

By tapping into AFC’s extensive network and expertise, ARISE IIP aims to cultivate a vibrant ecosystem that nurtures entrepreneurship and drives sustainable economic development across the continent.

Gagan Gupta, CEO of ARISE IIP said about this partnership: “ARISE IIP is about empowerment. By empowering our customers, and ensuring they have the robust financial support needed to meet their operational objectives, this collaboration with Africa Finance Corporation, our long-lasting partner, takes us one step closer to realising our vision of an industrialised and prosperous Africa.

Samaila Zubairu, President & CEO of AFC said: This partnership marks a significant milestone in our commitment to offer strategic financial advisory and corporate finance services to firms focused on value capture and import substitution projects in Africa. By collaborating with our investee company Arise IIP and African entrepreneurs in our Special Economic Zones, we aim to foster an ecosystem that will increase trade, create jobs, and drive economic advancement on the continent.

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