Business

Banking System Credits Up By 4.6%

Published

15 years ago

November 30, 2009

The 5.5 per cent increase in claims on the private sector drove the aggregate banking system’s credit (net) to the domestic economy by 4.6 per cent in July 2009, the Central Bank of Nigeria (CBN) has disclosed.

Claims on the private sector include gross credit from the financial system to individuals, enterprises and non-financial public entities not included under net domestic credit, as well as financial institutions not included elsewhere.

Before the recent CBN cleansing exercise in the banking sector, banks credit to the economy has been the major driver of recorded growth in other sectors of the economy. This is an indication that other sectors’ activities may have been boosted in relative terms by 4.6 per cent increase in banks’ credit to the economy.

This recorded credit level is compared to the increase of 3.6 per cent in the preceding month.

At N3.088 billion, the banking system’s credit (net) to the Federal Government declined by 7.2 per cent, compared to the fall of 4.9 per cent in June, 2009. The fall was attributed wholly to the 11.1 per cent decline in deposit money banks’ (DMBs) holdings of government securities during the month.

The banking system’s credit to the private sector rose by 5.5 per cent to 9.026 billion, compared to the increase of 0.6 per cent in June 2009. This reflected largely the 4.6 per cent increase in DMBs claim on other private sectors. At N7.554 billion, foreign assets (net) of the banking systems declined by 1.2 per cent, as against the increase of 0.1 per cent in the preceding month. The development was attributed to the fall in both CBN and DMBs’ holding.

Meanwhile, the recorded contraction in broad money (M2) is a reflection of the respective decline of 1.2 and 8.5 per cent in net foreign assets and other assets (net) of the banking system. Barely a month to the end of year 2009, the apex bank noted in its July report that over the level at end – December 2008, M2 decline by 3 per cent.

With the expectation of more developments on the sector by the CBN as the year draws to a close, monetary and credit developments in the economy have been trailed with mixed developments in July.

For instance, provisional data by the CBN indicated a decline in monetary aggregates at the end July 2009, while broad money (M2) fell by 2.1 per cent to N8.889 billion, compared to the 4.1 per cent decline in June 2009. Similarly, narrow money (M1) declined by 4 per cent to N4.303 billion, as against the incase of 3.8 per cent in the preceding month.

The CBN revealed that quashi money fell by 0.2 per cent to N4.585 billion, in contrast to the increase of 4.4 per cent in June 2009. The development reflected the decline in all the components, namely: time, savings and foreign currency deposits of the DMBs.

Other assets (net) of the banking system also fell by 8.5 per cent to N4.602 billion, compared to the decline of 3.4 per cent in the preceding month. The fall was attributed to the decline in unclassified assets of both the CBN and the DMBs.

At N1,008 billion, currency in circulation increased by 0.2 per cent in July 2009, over the level in the preceding month. The rise was due to the 2.7 per cent increase in currency outside the banks. Monetary aggregates contracted further in July 2009, while banks’ deposit and lending rates indicates a general increase. The value of money market assets increased, largely on account of the rise in commercial papers (cps).

Business

E-Commerce Platform Revolutionises Online Businesses, Empowers SMEs

Published

4 days ago

September 4, 2024

The Tide

A revolutionary online marketplace launched in December 2023, Naijamart.com, is shaking up the landscape for Nigerian businesses.
The multi-platform ecosystem is designed to empower businesses of all sizes and connect them with a wider audience at zero cost.
It offers diverse range of platforms on catering to specific business needs, and its product platform allows the buying and selling of a vast array of products, from electronics and fashion to home ware and groceries.
Naijamart Motors provides a dedicated space for seamless transactions, including buying, selling, or leasing a car, motorcycle, or any other vehicle, and also provides a dedicated space for seamless transactions.
According to the facilitators, Mr. Olalekan Emmanuel Odusanya and Mr. Moses Omhekono Owolabi, the platform was created to fill a significant void in the e-commerce industry, bridging the gap between vendors and buyers while providing enhanced security.
“Our vision is to create a platform where everyone benefits. We have meticulously designed the platform with an array of innovative tools and features to ensure that every user, regardless of their role, enjoys a seamless and rewarding experience.
“The platform is user-friendly, ensuring that even those with minimal technical skills can easily create and manage their online storefronts, and guarantees triple sales through its comprehensive support system and innovative features designed to maximise visibility and customer engagement.
“This multifaceted platform has also been the bedrock and backbone for many SMEs, providing support to the underserved and less privileged and grants to businesses”, Odusanya said.

Business

Analysts Fear Bank Recapitalisation May Worsen SMEs’ Funding

Published

4 days ago

September 4, 2024

The Tide

Analysts have said that the ongoing recapitalisation in the banking sector was pushing the industry towards greater consolidation, with significant implications for lending practices, especially for small and medium enterprises (SMEs).
They also noted that the Central Bank of Nigeria’s directive for banks to increase their capital base was not only reshaping the landscape by encouraging mergers among smaller banks, but also raising concerns about restricted access to credit.
According to the Head of Research at a financial market infrastructure group warehousing, FMDQ, Vincent Nwani, the recapitalisation was likely to lead to a wave of mergers and acquisitions, as smaller banks may find it difficult to meet the stringent capital requirements on their own.
“The recapitalisation will undoubtedly lead to further consolidation in the banking sector.
Smaller banks may struggle to meet the new requirements independently, prompting more mergers and acquisitions. This consolidation is likely to create a more competitive environment but may limit credit access for smaller enterprises,” Nwani explained.
Meanwhile, a Professor of Economics at Babcock University, Olusegun Ajibola, warned that while the recapitalisation might strengthen the overall banking sector, it could also result in tighter lending conditions, particularly for SMEs.
He noted that banks, in their effort to meet the new capital requirements, might prioritise capital accumulation over lending, which could temporarily reduce the availability of credit for SMEs.
“While the recapitalisation will strengthen the banking sector, the immediate effect will be a tightening of lending, particularly to small and medium-sized enterprises.
“Banks are focused on shoring up their capital, which could temporarily crowd out credit availability for SMEs, crucial to our economy,” the former president of the Chartered Institute of Banking of Nigeria noted.
The Tide’s source reports that the Association of Securities Dealing Houses of Nigeria(ASHON) has accused banks of bypassing licensed stockbrokers as receiving agents in the fresh recapitalisation exercise.
The Chairman of ASHON, Sam Onukwue, and its Secretary, Athan Ogbozor, stated that the association was empowering their staff members, including drivers and receptionists, to issue and receive share subscription forms.

Business

FCMB Moves To Empower Nigeria’s Female Tech Entrepreneurs

Published

4 days ago

September 4, 2024

The Tide

First City Monument Bank (FCMB) has launched a female friendly programme called “FCMB’s HERccelerate programme”, aimed at promoting startups’ growth, funding, mentorship, and training to help female founders.
FCMB’s Managing Director (MD), Yemisi Edun, who said this during the launch of the programme, said the initiative, which is driven by the Bank’s SheVentures and Hub One innovation hub, is executed in collaboration with 8th Gear Hub and Venture Studio.
The programme, according to the MD, seeks to equip female founders with the necessary skills, knowledge, and networks to secure funding and ensure sustainable growth.
She noted that applications for the programme, which targets women-led startups across various sectors, including Fintech, Agritech, Healthtech, Edtech, and E-commerce, offers them the chance to compete for funding and other strategic benefits and would be closing on September 30, 2024.
The MD said participants will undergo rigorous training, including office hours, site visits to successful local startups, and networking events with seasoned entrepreneurs.
“This robust support structure is designed to provide participants with access to knowledge, resources, investors, markets, and networks.
“The programme will culminate in a showcase event where winners will receive grant funding and gain exposure to potential investors.
“The bank is commited to fostering innovation and supporting women-led businesses, particularly SMEs in the tech sector.
“This initiative reaffirms our dedication to empowering women entrepreneurs to pursue their ambitions and make significant contributions to the tech ecosystem and Nigeria’s economic development.
“We understand the unique challenges faced by female-led tech ventures, from funding constraints to biases that hinder growth. HERccelerate is our platform to drive innovation and open more funding avenues for these businesses.
“We urge women entrepreneurs to take advantage of this opportunity to leave a lasting impact”, She said.
The Tide’s source reports that Nigeria’s tech sector has experienced notable growth in recent years, with women-led startups making significant inroads across various industries.