Bank of Industry’s New Credit Schemes

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Oputu

COLLATERAL requirement will no longer be an issue for accessing its credit facility. The Bank of Industry, BoI, has designed credit schemes and products that allow reputable persons third party guarantees on loan applications. Evelyn Oputu, managing director, BoI, disclosed this while addressing Nigerian and Danish business communities in Lagos. According to her, the issue of collateral requirement to access funding was neither here nor there because the bank has already identified that some serious businesses do not have collaterals.

“The BoI has designed some credit schemes and products that have gone ahead to address people without collateral through cooperative lending and our bottom of the pyramid programme where we normally channel funds to microfinance banks for onward lending. The BoI also accepts peer group and reputable persons’ third party guarantees to give grants to applicants, and also accepts lien on the equipment to be acquired with the given funds. So, collateral is no longer an issue. What is important is the track record and attitude to debt servicing because credit has to do with integrity; if you have integrity issues definitely you cannot access the bank’s fund,” she said.

Oputu noted that there are several reforms and fiscal measures currently being implemented by government to bring about improvement in the nation’s investment climate, protect local companies and mobilise local and foreign direct investments into the manufacturing sector. She said that the bank was not static as it has been designing solutions to challenges militating against specific sectors of the economy. “The BoI is always futuristic not having to wait but envisaging what will be beneficial to the economy and with proactive initiatives we make efforts to bring about economic development.”

She explained that reforms take time to mature and that within the manufacturing sector the bank was trying as much as possible to see that all problems militating against the sector were addressed squarely.

Tougher Sanctions Await Banks on money laundering

THE Central Bank of Nigeria, CBN, is planning stiffer penalties for banks involved in money laundering as part of efforts aimed at strengthening the fight against criminality. Pattison Boleigha, chief compliance officer, Access Bank Plc, said it would involve the withdrawal of professional licence and imprisonment of principal officers.

Boleigha
Boleigha

The move, it was learnt, became imperative because sanctions meted out against errant financial institutions in the past had not deterred them. Boleigha said, henceforth, the sanctions would be administrative in nature. He spoke during the inauguration of new board members of the Association of Certified anti-Money Laundering Specialists.

He said since infractions could arise from the activities in a branch or subsidiary at both local and offshore locations, the sanctions would be systematic and not transactional. “All financial institutions must seek to comply with all laws and regulations applicable to the conduct of their business or related activities,” he said.

N20 Billion Loan to Farmers

THE federal government and the deposit money banks have resolved to extend the loan repayment period for farmers from six months to one year. According to the government, the expansion is to ensure further increase in food production in the coming year and reduce inflation.

Adesina
Adesina

The decision was reached at a breakfast meeting organised by the federal ministry of agriculture and rural development in Abuja, which had the Central Bank of Nigeria and heads of various DMBs in attendance.

A statement from the ministry noted that the meeting also discussed and resolved some challenges, mostly bureaucratic, in the loan repayment processes. Akinwumi Adesina, minister of agriculture, said the total amount loaned to farmers in 2013 was N20 billion as against N3.5 billion in the preceding year. He said banks’ confidence in farmers came as a result of the creation of institutional structures in form of value chains and stressed that the federal government would continue to reduce the risk of lending by banks to the agricultural sector.

Adesina named the DMBs that supported the sector as Access Bank, Diamond Bank, Enterprise Bank, FCMB, Jaiz Bank, First Bank and Mainstreet Bank. Others are Sterling Bank, UBA, Unity Bank, Wema Bank, Zenith Bank, Union Bank and Bank of Agriculture. The minister attributed the decline in inflation to the slow rate in the increase of food prices and the CBN’s monetary policy.

Doubts Over Impact of CBN Banking Reform

AKPAN Ekpo, director-general, West African Institute for Financial and Economic Management, WAIFEM, is yet to see any impact of the Central Bank of Nigeria, CBN, banking reform on the on the citizenry in view of the prevailing high lending rate.

Ekpo
Ekpo

“In my opinion, in as much as the lending rate is still high in the country, the banking reform has not really impacted on the lives of the ordinary people. It is obvious that the reform has brought some level of sanity in the industry but its desired effect of impacting on the economy has not been achieved. Until we see the lending rate dropping to a level where manufacturing firms or industries can borrow at minimum cost, which will then have a multiplier effect on price of goods, employment and standard of living, then we cannot really say that the reform has achieved its purpose,” he said.

While answering questions on the controversial benchmark for oil price in determining the 2014 budget, Ekpo said, “The ministry of finance and the budget office have the capacity and expertise to determine the benchmark for oil price than the National Assembly whose function is to make laws. The fixing of oil price should be conservative in nature as it is a volatile product. It is better to underestimate than over estimate.”

Compiled by Anayo Ezugwu 

— Dec. 9, 2013 @ 01:00 GMT

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