Stanbic IBTC Bank, a subsidiary of Stanbic IBTC Holdings PLC, has introduced a Smart Loan digital solution to enable customers who have an account with their Asset Management arm access a loan to enable them meet their medium-term financial obligations.
According to the bank, the devaluation of the naira due to the global economic downturn has reduced disposable income as more naira is required to maintain the current level of expenditure and consumption. This is more so, given that the economy is largely import driven and there is a need for people to access funds seamlessly from their financial partners.
It stated that the Smart Loan, a digital, paperless loan facility will come in handy for many Nigerians, especially those in dire need. The solution will support Nigerians by giving them access to funds while also contributing to economic growth.
The Smart Loan digital facility is available to customers with a mutual fund investment with Stanbic IBTC Asset Management. This enables them to access the instant and quick paperless loan facility of up to N10 million. The lending solution empowers them to meet their financial needs while also maintaining a healthy cash flow.
Oladele Sotubo, Chief Executive, Stanbic IBTC Asset Management, said, “The Smart Loan product is designed to help provide our customers with the necessary financial support of up to N10 million to meet their medium-term financial responsibility, while also positioning them on a path to long-term financial stability. We understand the need for constant cash flow and its relevance to our livelihoods and households.”
Bunmi Dayo-Olagunju, Head, Client Solutions, also said Stanbic IBTC Holdings will continue developing innovative financial solutions to enable customers to achieve stable financial freedom through simple and quick banking solutions accessible to them at their convenience. We are delighted that we can further serve our customers in positive ways that improve their finances through our arrays of financial products.”
Central Bank of Nigeria Increases Interest Rate on Intervention Loans From 5% to 9%
The Central Bank of Nigeria has increased interest rates intervention loans to 9% per annum to ease the nation’s record high inflation rate.
The Central Bank of Nigeria (CBN) has increased interest rates on all its intervention loans by 4% from 5% to 9% per annum to ease the nation’s record high inflation rate.
Chibuzo Efobi, director of financial policy and regulations department of the CBN, disclosed in a circular to all banks and Other Financial Institutions (OFIs) dated August 17, 2022.
CBN had reduced interest rates on intervention loans from 9% to 5% per annum in the first quarter of 2020 to help curtail the impact of COVID-19 on businesses and the Nigerian economy at large.
However, the nation’s almost 20% inflation rate despite efforts to halt price increase has forced CBN to start mopping currency in circulation. One of the initiatives introduced in the last two months was to return interest on intervention loans.
This was announced just two days after the apex bank reviewed upward the minimum interest rate payable on savings deposits from 0.15% to 4.2%, 30% of the Monetary Policy Rate (MPR).
In the last two months, the CBN has risen the interest rate by 250 basis points to 14%, increase interest on intervention loans and raised minimum interest rate on savings deposits to contain inflationary pressure.
Nigeria’s inflation rose to 19.6% in the month of July as the value of the Nigerian Naira took a hit against global currency amid rising demand for the United States Dollar in an economy that depends on imports for most of its consumption.
This pushed prices of imported goods or locally made goods with imported items to a record-high as businesses were forced pass to increase in cost to final consumers.
Research Indentifies Major Factors in Growth of Structured Credit Market
A new survey from Aeon Investments, the London based credit-focused investment company, with institutional investors in Europe and the US who collectively have around $574 billion in assets under management, reveals the major factors behind more professional investors increasing their allocation to structured credit.
When asked for their top three reasons for this trend, 44% selected greater innovation in the structured credit market, followed by 40% who included greater transparency in the sector.
This was followed by an improving regulatory environment, which 31% of professional investors included in their top three reasons for more professional investors increasing their allocation to structured credit; 22% cited the fact that they can offer attractive yields, which have become even more appealing given the current difficulties in the fixed income market, and one in five (20%) selected the sector’s growing focus on ESG. Some 13% cited structured credit’s ability to offer attractive diversification benefits as one of their top three reasons.
Which structured credit sectors will see the biggest increase in asset allocation from investors?
In terms of which areas of the structured credit market is likely to see the biggest inflows from investors over the next 18 months, 63% anticipate allocations to products focusing on residential real estate will see an increase, and 63% also expect this from those investment vehicles focusing on commercial real estate. Some 49% of respondents expect an increase in investment inflows into structured credit vehicles focusing on consumer credit such as student loans, auto credit/leases, compared to 11% who anticipate a decline. The corresponding figures for flows into structured credit vehicles concentrating on specialist areas of corporate finance such as commercial aviation, shipping, and trade receivables, is 42% and 12%.
Evgeny van der Geest, Managing Director, Aeon Investments said: “In recent years, the structured credit market has seen huge developments in terms of maturity and transparency, and this trend continues to gather pace. This, coupled with a growing desire to diversify portfolios and the search for yield, means more professional investors are increasing their allocation to structured credit investments.”
Private Sector Loans Reaches All-Time High of N37.13 trillion in April – CBN says
The Central Bank of Nigeria (CBN) has said credit to the private sector rose to N37.13tn as of April 2022 as banks increase lending to the real sector to create jobs and expand the country’s Gross Domestic Product (GDP).
The apex bank disclosed in its ‘Money and Credit Statistics’ report. From the year to date, credit to the private sector rose by 5.53% or N1.95 trillion from N35.18 trillion reported in January 2022.
In 2021, credit to the private sector jumped by N5.58 trillion to a record N35.73 trillion.
In the latest report from the central bank, credit to the private sector rose from N35.99 trillion in February to N36.37 trillion in March 2022, representing an increase of 1.07%.
The Monetary Policy Committee (MPC) attributed the growth in private sector lending to the increase in industry funding base and compliance with the 65 percent Loans to Deposit Ratio (LDR) directive.
The CBN also disclosed that it had reviewed the performance of its various interventions to stimulate productivity in manufacturing, industry, agriculture, energy, infrastructure, healthcare, and micro, small and medium enterprises.
The governor of CBN, Mr. Godwin Emefiele, in his statement at the end of March MPC, noted that the growth reflected the continued growth of banking system credits to the private sector supported by the sustained drive of the apex bank to increase lending to high-impact real sector ventures.
He had disclosed that gross credit maintained its upward trajectory since 2019, with an N4.13tn or 19.53 percent growth in industry credit between February 2021 and 2022.
Deputy Governor of Financial System Stability of the CBN, Aisha Ahmad, at the MPC meeting of March 2022 in Abuja, said, “The continued credit growth, particularly to output enhancing sectors, is expected to support economic recovery further. However, sustained regulatory vigilance is required to mitigate any potential crystallization of credit risk in the financial system from lingering macroeconomic risks.”
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