Despite the harsh operating environment in the Microfinance sub sector of the economy, the total assets of (MfBs) across the country, has rose to N356 billion.
This was an increase of 18.39 per cent, when compared with N300.73billion, posted in December 2014, meaning the microfinance industry might not have been badly affected by the sorry state of the Nigerian economy.
The Central Bank of Nigeria (CBN), in its Financial Stability Report for the first half of the year, noted that MfBs’ paid-up capital decreased by 0.61 per cent to N81.94 billion from N82.44 billion at end of December 2014, while shareholders’ funds increased by 6.61 per cent to N97.03 billion at end of June 2015, from N91.01 billion, at end of December 2014.
The apex bank, however, attributed the decline in the industry’s paid-up capital to the non-rendition of returns by some MfBs operating in the North East.
In addition, the CBN said the subsector’s total deposit liabilities and net loans & advances increased by 9.31 and 9.34per cent to N159.40billion and N178.12billion in June 2015, compared with N145.83 billion and N162.91 billion at December 2014, respectively.
Also, the regulatory body said MfBs’ reserves increased by N6.52billion to N15.09billion at the end of June 2015 from N8.57billion at the end of December 2014.
According to the CBN, the continued improvement in the operations of functional MfBs was due to the ‘sustained regulatory oversight and improved compliance by operators.
On the other hand, Managing Director, Nigerian Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, said, as at June 2015, a total of 936 MfBs in Nigeria could only mobilise total deposits, in the region of N173.3 billion.
This low level of performance in deposits mobilisation by these institutions, he said, suggests a low level of micro banking penetration in the country and requires to be looked into for immediate action and improvements. The NDIC boss was unhappy with the state of affairs in the industry, stating that microfinance banks should be financially solid to be able to increase microfinance adoption and penetration level.
Taking a cursory look at the industry generally, the NDIC boss listed factors such as drop in crude oil price by 50 per cent since 2014, increasing supply of shale oil and impact of treasury single account as being probable causes of low performances of those operating in the microfinance industry.
The Managing Director, Ospoly Microfinance Bank, Mr. Femi Fapohunda, said for proactive board and management of microfinance banks, this economic challenge would rather be an impetus for higher performance. Such MfB, he said, will have to go to the drawing board once again, plan new strategy and re-engineer all their policies for enhanced performance, which will also lead to higher profitability and productivity.
According to him, “For proactive MfBs, they will even do better during economic recession. But for those who are not creative, who don’t want to be innovative in designing problem-solving products and services, but want to be competing with deposit money banks, they are going to regret it. The banks that fall within this cadre are likely to have problems under the current economic recession. The creative ones among them will have better liquidity and profitability.”
FMDQ Exchange records 6.75% MoM decrease in secondary market turnover
By Sodiq Adelakun
In October, FMDQ Exchange reported a total secondary market turnover of N21.70 trillion, a decrease of 6.75 percent (N1.57 trillion) from the previous month and an increase of 60.27 percent (N8.16 trillion) from the same period last year.
The Spot and Derivatives Market contributed N20.48 trillion and N1.22 trillion respectively to the total turnover.
The Spot FX Market turnover was $4.66 billion (N3.66 trillion), a decrease of 14.96 percent ($0.82 billion) from September 2023.
Further, the US Dollar appreciated against the Naira in the FX market, with the exchange rate ($/N) increasing by 5.34percent ($/N40.41) to close at an average of $/N797.43 in October 2023 from $/N757.02 recorded in September 2023, trading within a range of $/N741.85 – $/N993.82.
Similarly, in the Derivatives Market, total turnover in the FX Market segment was $1.55billion (N1.22trillion), representing a MoM decrease of 39.27percent ($1billion) from September 2023 figures.
Naira’s floating exchange rate brings uncertainty for investment banking in Nigeria — Ex-AIHN president
The former President of the Association of Issuing Houses of Nigeria, Ike Chioke, has stated that the currency reforms implemented by the Central Bank of Nigeria have brought about both challenges and opportunities for the investment banking industry.
Chioke made this statement at the Investment Banking Awards Night held in Lagos.
He further mentioned that the floating exchange rate of the naira and the elimination of fuel subsidies have had a significant impact on various sectors of the economy.
“Nigeria is bracing up to the impacts of the new government and they are already making changes to what I will call non-unorthodox policies. These policies had also introduced pain and hardship with the free-floating of the naira and removal of fuel subsidy forcing their weaknesses on various sectors of the economy,” he said.
Chioke added that despite the hiccups in the implementation of these reforms, they have thrown up major opportunities for investment banking.
He urged members to apply their best skills and expertise to make the best of the opportunities.
“As you know, the investment banking industry is a critical one for the Nigerian economy and we represent the best brains and the best expertise in that space,” he said.
Meanwhile, in the Debt Capital Market Category of the award, Chapel Hill Denham Advisory Limited won the Private Company Bond House 2022 Award; Best Commercial Paper House 2022 Award, and Best Bond House 2022 Award while the Best Commercial Paper House 2022 Award went to StanbicIBTC Capital Limited.
In the Equity Capital Markets Category, the Equity Deal of 2022 Award was won by three companies- namely Stanbic IBTC Capital Limited, UCML Capital, and Rand Merchant Bank.
SMEs contribute 46.31% to Nigeria’s GDP — SMEDAN CEO
The Director General/CEO of SMEDAN, Charles Odili, has highlighted the significant contributions of small and medium enterprises (SMEs) to the Nigerian economy.
According to Odili, SMEs make up 46.31 percent of the national GDP and contribute 6.21 percent to exports. These findings were revealed in the recent nMaSMEs survey, which estimated that there are approximately 39.6 million nMSMEs in Nigeria, employing 62.5 million individuals.
This accounts for a substantial 80.2 percent of the country’s labor force. In another development, 50 rural enterprises in Gombe State are participating in a three-day training program organized by SMEDAN and the Gombe State government.
Speaking at the opening ceremony of the training, in Gombe on Wednesday, the Director General and Chief Executive of SMEDAN, Charles Odili said that the programme was designed to provide an end-to-end business development service to the rural entrepreneurs.
Charlie Odili, who was represented by the Ag. Director of Partnership and Coordination, Prof Adeyinka Fusha, also said that the training was targeted at business owners who were at the bottom of the pyramids as a supportive mechanism to enhance rural entrepreneurship, competitiveness, job creation and financial inclusion.
According to him, “As you may be aware, the Nano, Micro, Small, and Medium Enterprises (nMaSMEs) sub-sector has played an important role in contributing to the economic development of many countries around the world.
“The sub sector accounts for the majority of the enterprises in Nigeria and also accounts for the highest number of jobs created in Nigeria’s economy.”
The DG also said that the training has three components, namely; sensitisation, capacity building and empowerment grant.
While declaring the training open, Gombe State Governor, Muhammadu Inuwa Yahaya, said that the programme was timely, following the economic hardship in the country.
“The programme would contribute to the economic development of the state and the country at large,” the Governor said.
Inuwa Yahaya, who was represented by the Permanent Secretary, General Services, office of the SSG, Alhaji Abdulkadir Adamu, appreciated SMEDAN and reiterated the government’s commitment to work with it for more opportunities for rural businesses.
He also said that the state government had organised an investment summit which attracted many investors into the state, saying, “This may not be unconnected with the business friendly environment of the state.”
In his remarks, Commissioner of Trade, Industry and Tourism, Alhaji Nasiru Mohammed, said that the training would enable the rural enterprise to acquire the needed business techniques as well as empower them with knowledge and skills.
He further said that Governor Inuwa Yahaya had empowered over 2,000 Small and Medium Enterprises in the state and also established 1,000 hectares of land Industrial park to serve as an export processing zone.
He said, “This is a platform that will attract domestic and foreign investors to come and invest.”
He commended SMEDAN for organising the training and also encouraged the participant to be attentive, learn the techniques that will improve their businesses.
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