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Here are banks’ lending rates to agric, manufacturing, education, health

Hope Moses-Ashike Sep 21, 2022

Access Bank shares slip by most in 5 months as Q2 earnings dip

IT, fintech have strengthened financial inclusion – NPF Microfinance MD

Heritage Bank appoints Akinola George-Taylor as acting managing director

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Travellers groan as banks struggle to meet dollar demand

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Banking

Fidelity Bank’s gross earnings rises by 46% on strong interest income

Explainer: what to know about Fidelity Bank’s Union bank UK acquisition

Hope Moses-Ashike Sep 07, 2022

Fidelity Bank Plc. recently announced its acquisition of 100 percent equity stake in Union Bank UK (UBUK) Plc, which is...

Sterling Holdco eyes N121.8bn earnings in Q1 2025

Sterling Bank introduces virtual cards for easy payments

Hope Moses-Ashike Sep 07, 2022

Sterling Bank Plc has introduced virtual cards for existing and prospective OneBank customers free of charge to enable them to...

Unity Bank clarifies AMCON stake sale, says shares acquired by existing shareholder, not Providus

Unity Bank targets underbanked Women with new marketing penetration campaign

Hope Moses-Ashike Sep 07, 2022

Unity Bank Plc has deployed a new marketing campaign targeted at reaching millions of women entrepreneurs, especially the underbanked across...

We exclusively focus on SME lending – Auto Bucks CEO Olasukanmi Olaoye CEO, Auto Bucks Lenders Limited, one of the subsidiaries of Alert Group, in this interview with Hope Moses-Ashike, speaks on challenges facing lending to Small and Medium Enterprises (SMEs) and other issues, excerpt. What specific risk management strategy did you implement to maintain portfolio at risk below 1 percent? In our inaugural year of operation, we disbursed over N80 million in loans. The income generated from these disbursements, coupled with the fact that they constitute a healthy portfolio, mitigates any risk associated with our portfolio. Therefore, the revenue derived from fees and charges enables us to generate income without exposing our portfolio to risk. The robust health of these portfolios significantly contributes to the achievement of our income targets. How did you manage costs and operational efficiency to achieve profitability within seven months? To achieve profitability within seven months, we implemented several strategies. Firstly, we focused on securing cheaper funds, as lower financing costs enhance operational efficiency significantly. Secondly, while maintaining competitive pricing, we ensured that our rates were adequate to cover our cost of funds and other operational expenses. Moreover, we kept our management expenses minimal, contributing to overall cost reduction. Leveraging technology was another key aspect of our approach. By deploying advanced technological solutions, we streamlined various business processes. For instance, our electronic collection system eliminated the need for manual cash transactions, enhancing efficiency and reducing the need for field officers. Through these measures, we optimized operational efficiency and effectively managed costs, resulting in positive outcomes within the initial six months of operation. You mentioned disbursing approximately N80 million; how many individuals or businesses were beneficiaries of this loan? We exclusively focus on SME lending. To date, we have successfully disbursed loans to over 1,000 SMEs. This achievement underscores our deliberate commitment to positively impact the Nigerian economy through targeted support for SMEs. Since our inception, every loan disbursed has been directed towards SMEs, reaching a total of over 1,000 beneficiaries. How do you ensure that the beneficiaries are utilizing the loans provided to them for business growth and to contribute to the economy? The primary way we ascertain the proper utilization of the funds we disburse is through their repayment behavior. If beneficiaries have diverted the funds and not invested them in their businesses, it would reflect in their repayment patterns. Additionally, we implement rigorous monitoring mechanisms once the loan is disbursed. This ongoing monitoring allows us to assess the impact of the funds on their businesses and on the economy as a whole. Furthermore, maintaining a positive credit appraisal is crucial. A strong credit record not only facilitates future loan requests but also enables beneficiaries to potentially access larger loan amounts. Therefore, we emphasize the importance of maintaining a favorable credit history. When you mention that your portfolio at risk is below 1 percent, does that imply that you do not encounter other challenges? The strategy we’ve employed acknowledges that some clients may face difficulties in repayment, particularly during certain business cycles such as festive or fasting periods. For instance, clients in the fast-moving consumer goods (FMCG) sector may experience reduced returns during fasting periods due to decreased consumption levels. Our proactive monitoring of these clients helps mitigate potential challenges and aids in the recovery of funds. As previously mentioned, we exclusively provide loans to SMEs with a minimum of 12 months of consistent business operation and cash flow. This ensures that our borrowers have a track record of financial stability, as evidenced by their bank records. We do not extend loans to startups but rather focus on established businesses with a proven track record. Our credit analysis process is thorough and detailed, assessing the borrower’s financial history and ability to repay. For instance, if a borrower has transacted less than N500 million in the past 12 months and seeks a N5 million loan, we evaluate their monthly turnover to ascertain their repayment capacity. This rigorous process ensures that loans are utilized effectively and that borrowers can comfortably meet repayment obligations. Additionally, we implement regular monitoring to ensure that funds are used appropriately and not diverted for non-business purposes. We are mindful of seasonal factors, such as festive periods, to prevent misallocation of funds. Our commitment to responsible lending practices and diligent monitoring safeguards against potential diversions and ensures that our support truly benefits the MSMEs we serve. What are some of the other challenges your business faces? In the current macroeconomic landscape, businesses encounter various hurdles. The high cost of operation is a prominent issue, compounded by volatile market conditions. Fluctuations in prices, especially due to foreign exchange (FX) challenges, pose significant obstacles. Even after procuring goods, market dynamics can swiftly impact prices, leading to uncertainties. Moreover, macroeconomic indicators like inflation rates, currently at 33.2 percent, further complicate business operations. Elevated inflation affects purchasing power and overall business viability. Additionally, the cost of funds presents a considerable challenge. While securing financing is crucial, prevailing market conditions have increased the cost of capital, with investors demanding higher returns on their investments. Despite these challenges, we actively seek solutions to mitigate risks. This includes sourcing affordable and stable funding options while prioritizing long-term relationships with fund providers. We also recognize the importance of stable economic policies in fostering a conducive business environment. Efforts by the federal government and the Central Bank of Nigeria to stabilize the economy, particularly in areas like FX markets, are crucial for SMEs to plan and navigate business operations effectively.

CIBN, others sign agreement on Fintech certification

Hope Moses-Ashike Sep 06, 2022

The Chartered Institute of Bankers of Nigeria (CIBN) has signed a collaborative agreement with FinTechNGR and the Financial Services Innovators...

Kuda celebrates 3yrs of offering respite to Nigerian banking customer

Seyi John Salau Sep 03, 2022

A lot of Nigerian bank customers have certain frustrations in common – that they have to pay for almost every...

Banks’ interest income jumps in H1 on rate hike

Opeyemi Kalejaiye Sep 01, 2022

The interest income of Nigerian banks rose in the first half of 2022 after a much-needed boost from higher interest...

CIBN sees career development as key to boost organization performance, retain talents

Hope Moses-Ashike Aug 31, 2022

The Chartered Institute of Bankers of Nigeria (CIBN) has pointed to career development as a key factor to determine the...

Comercio Partners explains why foreign capitation importation decline will persist

Hope Moses-Ashike Aug 31, 2022

The ongoing tight monetary policy of major central banks around the world, as well as domestic factors including scarcity of...

How we made payment system in Nigeria globally competitive – CBN

How CBN is supporting economic diversification

Hope Moses-Ashike Aug 31, 2022

The persistent Foreign Exchange (FX) crisis occasioned by dollar shortage in the banking system to meet legitimate needs has remained...

Zenith emerges number one Tier-1 bank for 14th straight time

Assessing Zenith Bank's commitment in promoting non-oil exports

Hope Moses-Ashike Aug 24, 2022

Nigeria has been a mono-product economy for many years relying strongly on crude oil as her major source of revenue....

CBN rolls out USSD code for eNaira transactions

Onyinye Nwachukwu Aug 18, 2022

Beginning next week, Nigerians, both banked and unbanked, will be able to open an eNaira wallet and conduct transactions by...

Sterling Bank, Farafina collaboration to strengthen education sector

Hope Moses-Ashike Aug 17, 2022

Sterling Bank Plc has collaborated with Farafina Books, Nigeria’s leading independent literary publishers, to strengthen the education sector through the...

Ecobank repays 50% Eurobond issuance, signals strong liquidity position

Ecobank Nigeria demonstrates support to creative industry

Hope Moses-Ashike Aug 17, 2022

All is set for a ‘Photo Walk’ with Ecobank as part of activities to commemorate this year’s World Photography Day...

Need to adopt e-payment channels as cashless policy comes to stay

Banks’ e-payment channels transaction to decline to N30.56trn

Hope Moses-Ashike Aug 17, 2022

Value of transactions through Nigerian banks’ e-payment channel is expected to decline further to N30.56 trillion in August 2022 due...

The CBN governor wields enormous power without accountability

CBN raises savings rate to boost deposits

Hope Moses-Ashike Aug 17, 2022

The Central Bank of Nigeria (CBN) has reviewed upwards the minimum interest rate payable to savings deposits from 0.15 percent...

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Here are banks’ lending rates to agric, manufacturing, education, health

Access Bank shares slip by most in 5 months as Q2 earnings dip

IT, fintech have strengthened financial inclusion – NPF Microfinance MD

Heritage Bank appoints Akinola George-Taylor as acting managing director

Travellers groan as banks struggle to meet dollar demand

Banking

Explainer: what to know about Fidelity Bank’s Union bank UK acquisition

Sterling Bank introduces virtual cards for easy payments

Unity Bank targets underbanked Women with new marketing penetration campaign

CIBN, others sign agreement on Fintech certification

Kuda celebrates 3yrs of offering respite to Nigerian banking customer

Banks’ interest income jumps in H1 on rate hike

CIBN sees career development as key to boost organization performance, retain talents

Comercio Partners explains why foreign capitation importation decline will persist

How CBN is supporting economic diversification

Assessing Zenith Bank's commitment in promoting non-oil exports

CBN rolls out USSD code for eNaira transactions

Sterling Bank, Farafina collaboration to strengthen education sector

Ecobank Nigeria demonstrates support to creative industry

Banks’ e-payment channels transaction to decline to N30.56trn

CBN raises savings rate to boost deposits

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