Category Archives: BANKING

The Bank of Industry (BoI) has pledged to partner with micro finance banks (MFBs) in Nigeria to support small businesses and promote financial inclusion.

The Bank of Industry (BoI) has pledged to partner with micro finance banks (MFBs) in Nigeria to support small businesses and promote financial inclusion.

Speaking at a technical session organised by BoI for MFBs, Olukayode Pitan, the newly appointed chief executive officer of the development bank, said the DFI understood the key role played by micro finance banks in bridging the financing gap experienced by micro enterprises in the Nigerian economy.

Pitan said BoI was seeking to align with MFBs to promote financial inclusion and deepen activities among people at the bottom of the pyramid.

“In driving economic growth in any nation, it is imperative to ensure that flow of money /capital reaches the bottom of the pyramid, where the majority of the country’s citizenship falls into,” he said.

“Whereas formal financial institutions are mandated to provide access to finance to enterprises in the economy, their operational activities are unable to reach the grassroots segments. This is where the microfinance institutions function as enablers to bridging this financing gap. In countries that have vibrant MSME segments, MFIs have been major contributors to reducing poverty levels and increasing the earning powers of micro enterprises,” he stated.

The BoI boss said Nigeria was not an exception as the activities of Nigerian micro finance institutions, including the licensed MFBs, had led to reductions in the country’s number of unbanked adults.

He said there was more to be done to achieve the Central Bank of Nigeria (CBN)’s financial inclusion mandate to reduce financial exclusion rate to 20 percent by 2020.

He dosclosed that BoI had identified MFBs as key partners to the execution of its Bottom of the Pyramid  (BOP) and the Government Enterprise and Empowerment Programme (GEEP), as the banks understood the workings of the customers in the MSME segment

“MFBs have a deep understanding of the challenges experienced by these customers especially regarding growth and access to finance. MFBs have deeper geographical spread based on the unit, state and national structure adopted,” he stated, disclosing  that the bank had disbursed about N3 billion to over 3,000 under the BOP scheme.

He said to date, about N4 billion had been disbursed to qualified beneficiaries in 31 states and the FCT under the GEEP scheme.

FSDH Forecasts Drop in June Inflation Rate to 15.64%

As the National Bureau of Statistics (NBS) prepares to release Nigeria’s inflation rate for June 2017, FSDH Research, the research arm of FSDH Merchant Bank has projected a lower inflation rate of 15.64 per cent for the month of June compared to 16.25 per cent recorded in May.

“We estimate that the increase in the CCPI in June 2017 would produce an inflation rate of 15.64 per cent lower than the 16.25 per cent recorded in May 2017,” FSDH said in its report.

If this happens, it would mark the fifth consecutive decline in inflation rate since February 2017.
The organisation stated that its model indicated that the general price movements in the consumer goods and services in June 2017 would increase the Composite Consumer Price Index (CCPI) to 233.25 points, representing a month-on-month increase of 1.18 per cent.

“Our model indicates that the general price movements in the consumer goods and services in June 2017 would increase the Composite Consumer Price Index (CCPI) to 233.25 points, representing a month-on-month increase of 1.18%.

“We estimate that the increase in the CCPI in June 2017 would produce an inflation rate of 15.64 per cent lower than the 16.25 per cent recorded in May 2017,” it noted, adding that the increase in the price of food items moderated in the month of June when juxtaposed with the month of May 2017.

“We also observed increases in some divisions that contribute to the Core Sub-Index, with the highest price observed in the clothing and footwear divisions.

“The monthly Food Price Index (FPI) that the Food and Agriculture Organization (FAO) released today shows that the Index advanced further in June 2017. The Index averaged 175.2 points, 1.43% higher than the revised value for May 2017, and 6.89% higher than the June 2016 figure.

FSDH Merchant Bank raises N14.40bn in commercial paper

FSDH Merchant Bank (FSDH MB) Limited has successfully raised N14.40 billion from its Series 3 and Series 4 Commercial Paper (CP). Collectively, Series 3 and 4 represents FSDH MB’s second issuance under its N30 Billion CP Programme established in 2016.

In a statement to BusinessDay, the company said the move is in reaffirming its commitment towards development of the Nigerian debt capital market.

Stanbic IBTC Capital Limited acted as lead arranger/dealer while United Capital PLC and FSDH MB acted in the capacity of co-arrangers/dealers, and FSDH MB as issuing, calculation and paying agent.

The CP offer, which closed on 26 May 2017, was open to investors at a discount rate of 18.50 percent for the Series 3 and 18.80 percent for the Series 4. The offer was received with considerable investor interest, and a high subscription level despite the persistent lack of liquidity and less than favourable market conditions so far experienced in the first half of 2017. This result is testament to investors’ confidence in FSDH MB as a credible institution with sound management and corporate governance practices, and an enviable track record of successful business operations in the domestic financial market.

Hamda Ambah, managing director, FSDH MB, emphasized that the success of the bank’s most recent CP Issuance reaffirmed the confidence placed by the market in the bank’s brand and its strategic intent. The CPs were listed on the FMDQ platform on 20 June 2017 and the proceeds of the Issuance will be utilized to support FSDH MB’s short term financing requirements.

Commenting on this development, Kobby Bentsi-Enchill, executive director and head, debt capital market, Stanbic IBTC Capital Limited, speaking on behalf of the arrangers stated, “We are pleased to have supported FSDH MB once again on yet another successful outing in the domestic capital market to meet its funding objectives. Remarkably, Commercial Paper continues to gain momentum as a viable alternative source of funding for blue-chip corporates and high grade issuers, and is also an increasingly competitive investment option for money managers looking for sustainable returns over and above comparable treasury benchmarks”.

FSDH Merchant Bank Limited, formerly First Securities Discount House Limited, was one of the first merchant banks to be awarded a merchant banking licence in Nigeria following the repeal of Universal Banking in 2010. FSDH MB was incorporated in 1992 as the first discount house in Nigeria and it commenced operations in 1993 having as its core competence, the issuance and trading of financial securities. In November 2012, FSDH MB obtained approval from the CBN to operate as a merchant bank and officially changed its name from First Securities Discount House Limited to FSDH Merchant Bank Limited in December 2012. FSDH MB commenced its merchant banking operations in January 2013.

FSDH MB provides a one-stop shop for financial services in Nigeria. Its service offerings include investment and corporate banking, trade finance and international banking, private banking and wealth management, fixed income trading and treasury services. FSDH MB also offers Asset/Fund Management, Stockbroking and Pension Fund Management respectively through its three independently managed subsidiaries: FSDH Asset Management Limited, FSDH Securities Limited and PAL Pensions Limited.

Accion Microfinance Bank shareholders appoint new directors

Accion Microfinance Bank shareholders appoint new directors

The Shareholders of Accion Microfinance Bank Limited (AMfB), Nigeria’s leading national microfinance Bank, at the last AGM held in May 26, 2017 approved the appointments of four additional directors to the Bank’s Board.

According to the Bank’s Chairman, Patrick Akinwuntan, “the new directors were appointed not only to further strengthen the governance structure of the Bank but also to enhance AMfB’s capacity to deliver the shareholders strategic objective of an efficient microfinance institution that contributes to Nigeria’s growth and development through enabling financial inclusion and empowerment in a strong socially responsible manner”.

The directors include Adenike Laoye who represents Ecobank Nigeria Plc on the board, Prince Olumide Obayomi appointed as an independent director, Christian Ruehmer represents Accion Investments on the Board, and Prateek Shrivastava, who also represents Accion Investments on the board.

Laoye is a graduate of the Lagos State University, and was called to the Bar in 1991, after which she joined the chambers of Fani-Kayode (SAN) and Sowemimo (SAN). She joined Ecobank Nigeria in 1992 and presently is the company secretary / Chief Legal Counsel responsible for (amongst other things); the management of the entire legal risk function sin the Bank and ensuring compliance with all governance requirements. With 25 years post call in-house counsel experience, she is very knowledgeable in documentation for transactions and processes and possesses excellent negotiation skills. An honorary member of the Chartered Institute of Bankers of Nigeria, she is married with children.

Obayomi is a Corporate Value Optimization Consultant and a farmer. He retired into private practice and agriculture after over 30 years post degree chequered professional career in the public sector, commercial and corporate banking and more than 17 years of private equity investment with African Capital Alliance (ACA). He had responsibility for managing Nigeria’s best performed independently managed SME Fund in his last years in ACA. He is a Fellow of the Institute of Chartered Accountants of Nigeria, an Associate of the Chartered Institute of Taxation of Nigeria and the Nigerian Institute of Management. Obayomi serves as a director on the Board of a number of public and private companies in the transportation, oil and gas, media, hospitality and agriculture sectors.

Ruehmer is an expert in the area of Risk Management and Treasury for financial institutions in developing countries and a Senior Risk Manager and Banker with over 25 years of international experience. He has 15 years of in-depth international experience in the implementation and improvement of risk management frameworks with over 70 financial institutions and international organizations.

Shrivastava is Vice President, Digital Solutions, within the Global Advisory Solutions group at Accion, a global nonprofit and financial inclusion pioneer. He is responsible for supporting Accion’s partners – microfinance institutions, banks and fintech companies – worldwide in their use of digital services to become more efficient and enhance customer service in a cost-effective and sustainable manner. During his time between 2009 and 2012 as Managing Director for Emerging Markets at Monitise plc, Shrivastava’ s project in Nigeria was one of the subjects of a visit to Nigeria by David Cameron, former Prime Minister of the UK. He also co-founded the shared agent network BeyondBranches Nigeria, now part of the Interswitch Group. Shrivastava has worked with the IFC, World Bank, USAID, Reliance and many other organisations around the world, promoting technology-enabled financial inclusion.