EnuguSME, Author at Enugu SME Centre

Here are banks that pay higher interest for your savings

Some Nigerian banks are paying higher interest to customers for saving their money with them, while others pay lower than regulatory approved minimum rate of 1.15 percent.

The Central Bank of Nigeria (CBN) on August 31, 2020, slashed the minimum interest payable on savings deposited in banks across the country to 10 percent per annum of the Monetary Policy Rate (MPR).

The MPR is currently at 11.5 percent. What this means is that the banks are to pay average interest rate of 1.15 percent (10 percent of 11.5 percent) to their customers for saving with them.

The CBN on September 22, 2020, cut its benchmark interest rate by 100 basis points (bps) from 12.5 percent to 11.5 percent.

Some of tier two and three banks are paying higher interest rate on savings account, a development analysts describe as a way of attracting customer deposits.

Out of 21 deposit money banks that published their rates as at March 5, 2021, Heritage Bank pays higher interest rate on savings at an average of 4.2 percent.

It is followed by Suntrust Bank 4.1 percent, Unity Bank 1.9 percent, Ecobank 1.25 percent, Citibank and Standard Chartered Bank 1.2 percent each.

The bank with the lowest interest payment on savings account is Providus Bank Limited. It pays average rate of N0.62 percent followed by Unity Bank plc, which pays N1.07 percent to their customers.

Other banks that pay N1.15 percent interest rate on savings include FCMB, Fidelity Bank, GTBank, Globus Bank, Keystone Bank, Polaris Bank, Stanbic IBTC, Sterling Bank, Titan Trust Bank, UBA, Wema Bank, and Zenith Bank.

Customers’ reaction

Christian Ezegolo, a Nigerian businessman, does not operate a savings account because he needs money to invest in his business and could not accept what he described as peanut that banks pay as interest on deposit.

“To me as an entrepreneur, I don’t save because I need that money to run my business. It does not make economic sense to me that I will go and give bank money and it is paying me 1.1 percent and I will still go to another bank and borrow at 25 percent, it does not make sense,” he says on phone.

What analysts say

Ayodeji Ebo, head, retail investment, Chapel Hill Denham, says banks are not supposed to pay lower than the regulatory prescribed interest rate, noting customers have the option of going to a bank that can compensate them better on their savings.

Guinness, other stocks drive NSE ASI high by 0.41%

Nigeria’s stocks market defied earlier negative predictions to close in the green zone on Tuesday, March 16 as investors showed interest in Guinness Nigeria Plc and other value counters.

Market watchers had predicted earlier bearish performance to filter into Tuesday trading session due to lack of positive news capable of lifting investors’ sentiment.

The National Bureau of Statistics (NBS) released the February inflation report with headline inflation jumping to a 4-year high at 17.33percent year-on-year (y/y) from 16.47 percent in January 2021.

At the Nigerian stock market, Guinness led the league of advancers after its share price moved up by N2.3 or 10 percent, from N23 to N25.3. Also, Vitafoam rallied from by 40kobo or 5.44percent, from N7.35 to N7.75; while Livestock Feeds made the top advancers after its share price increased by 7kobo or 3.83percent, from N1.83 to N1.9.

At the close of the trading session on Tuesday, March 16, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) increased by 0.41 percent, from 38,561.84 points to 38,720.81 points while the value of listed stocks on the Nigerian Bourse increased by N83billion, from N20.175 trillion to N20.258trillion.

Despite the record positive close of equities trading on Custom Street, more investors chose to sell stocks like Wapic (-9.09percent), Africa Prudential (-8.26percent), Fidelity Bank (-6.69percent), ETI (-5.83percent), and GTBank (-4.84percent).

Inflation rate quickens to 48-month high…

On the back of surging food prices, Nigeria’s February inflation rate accelerated by 17.33 percent, a 0.86 percent point increase from 16.47 percent in January 2021, according to a report released by the National Bureau of Statistics.

From BusinessDay analysis, inflation rate has been rising for 18 straight months and it is at the highest in 48 months.

The report showed that inflation rose month-on-month by 1.54 percent, which is 0.05 percentage points higher than 1.49 percent recorded in January.

Food inflation rose by 21.79 percent month-on-month compared to 20.57 percent in January 2021.

The major drivers of the rise in Nigeria’s food index are bread, cereal, meat, fruits, vegetables, oil & fat, potatoes, fish, yam and other tubers.

Core inflation, which excludes the prices of volatile agricultural produce stood at 12.38 percent month-on-month, up 0.53 percent compared to 11.85 percent in January 2021.

Customers to pay N6.98k per transaction for USSD services

Effective March 16, 2021, Nigerian bank customers will pay N6.98k per transaction for Unstructured Supplementary Service Data (USSD) services, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) said after a joint meeting on Tuesday.

The new fee replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.

USSD is a critical channel for delivering financial services, particularly for the underserved and/or financially excluded.

A joint statement signed by Osita Nwanisobi, acting director, corporate communications department of the CBN, and Ikechukwu Adinde, director, public affairs, NCC, said this approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions.

This resulted in the accumulation of outstanding fees for USSD services rendered, leading to potential service withdrawal by the MNOs.

The new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. This is to promote transparency in administration.

Banks are not to impose additional charges on customers for use of the channel, the statement said.

A statement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.

The MNOs and the deposit money banks are to discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (API) to enable seamless, direct and transparent customer billing.

“Banks and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services. With the above resolutions, the impending suspension of banks from the USSD channel is hereby vacated. Therefore, banks shall no longer be disconnected from the USSD channel,” the statement said.

MTN Nigeria, Ajua launch digital eCommerce mobile app to support SMEs

NIGERIA – MTN Nigeria has partnered with Ajua, a Kenyan based Africa’s first Integrated Customer Experience Company, to launch EnGauge, a digital eCommerce customer engagement management mobile app to support SMEs.

The mobile app according to the two, is set to transform how SMEs conduct business in Nigeria.

It will also help solve 4 of the UNDPs social development goals for Nigeria while also enabling business owners to oversee the smooth administration of transactions and operations of their companies.

With the SME market in Nigeria currently valued at USD220 billion annually and statistics showing that businesses that adopt Customer Relationship Management (CRM) solutions see their productivity increased by 40%.

This solution by both Ajua and MTN Nigeria is set to significantly empower SMEs to conduct business more efficiently ultimately increase revenues.

“In addition, SMEs will be able to improve their Customer Experience through the app and build a strong and engaging social media presence allowing them to target and engage new customers.”
Kenfield Griffith – CEO, Ajua

Available for download Google Play store, MTN EnGauge offers innovative customer management solutions including digital payments, CRM tools, customer feedback channels, customer debt management and tracking as well as business and product promotions through mobile and social media channels.

In mid-2020 Ajua launched SME Connect, a similar platform to serve the Kenyan market, businesses across the country are actively using the app for customer retention and as a marketplace for their products.

“MTN EnGauge is the ideal platform for business owners and entrepreneurs to thrive in the new normal,” Lynda Saint-Nwafor, Chief Enterprise Business Officer, MTN Nigeria, said.

“Entrepreneurs can securely receive payment, track transactions with each of their customers and glean valuable insights to serve them better based on their preferences and buying behaviour.”

MTN EnGauge gives business owners a platform to improve their customer experience by managing interactions with their customers.

SMEs can finally get an impression of their customers’ perceptions of their brand and know exactly what their customers are looking for and inform their next steps with customer data. Ultimately increasing their customer retention and profitability.

MTN EnGauge also makes it possible to increase brand exposure through social media. SMEs can take advantage of this connection by promoting their products and services on various social media platforms.

Upon registration to the application, businesses are automatically provided with a unique business code (USSD) which allows their customers to interact, transact and communicate with them in real-time.

“Through this digital ecommerce, MTN EnGauge allows SMEs to increase their sales by automating their business processes, this can save them time and energy ultimately leading to increased productivity,” Ajua CEO, Kenfield Griffith said.

Bank of Industry: Osun Government Partners to Train 2000+ Youths

In a bid to further cushion the effect of COVID-19 and provide jobs in the country, the Osun State Government and Bank of Industry have trained over 2,000 youths on entrepreneurship.

The programme is tagged: the Post COVID-19 Economic Strategy Training.

The Governor of Osun State, Adegboyega Oyetola, who presented certificates to the first batch of the participants of the programme at the Multi-purpose Hall, Local Government Service Commission, Abere, Osogbo, acknowledged the support of the Bank of Industry in providing jobs for the youths.

According to the Governor, the Skills Upgrade and Entrepreneurship Training Programme was designed to generate 15,000 direct and indirect sustainable job opportunities annually.

He noted that the programme was designed to provide participants who were adversely affected by the COVID-19 pandemic with skills upgrade training to make them relevant in the changing economic landscape. The aftermath of the COVID-19 pandemic.

“Under the Skills Upgrade Training Programme, we were able to re-focus, re-engineer and expand the scope, knowledge and relevance of artisans and people who lost their jobs to make them relevant under the new normal orchestrated by COVID-19.”

The Executive Director, Micro Enterprise, Bank of Industry, Mrs Toyin Adeniji, commended the administration of Governor Oyetola for building a virile and healthy economy for the Osun State.

Mrs Adeniji, while expressing satisfaction with the timely and prompt cooperation and support received from the government, promised BOI’s continued support to the Osun state in its relentless efforts to grow her economy.

Inflation Expected to Spike Further

Economic data inflation continued to be mixed and driven by the impact of lockdowns in different countries.

U.S. initial jobless claims rose early in February, but fell back later in the month, with retail spending increasing the most in almost half a year.

UK retail spending saw its largest drop since spring of 2020 due to the lockdown, but forward-looking PMI indicators skewed surprisingly to the upside. In Q4 2020, U.S. GDP recorded a solid growth of 4.1%, while the U.K.’s GDP growth was also positive at 1.0%. However, the Eurozone contracted by -0.6%.

Among major developed countries, the UK continued to lead on vaccine roll-out, with a majority of the most vulnerable population having received their first shot by the end of February 2021.

The US was catching up fast, while the EU remained far behind. Interestingly, new studies provided evidence of high levels of protection against severe cases after just a single dose of the vaccine.

Global COVID-19 cases saw a massive decline over the month, which led to tentative easing of restrictions in some U.S. states, while the UK announced a cautious phased-in reopening plan starting in March 2021. Likewise, Japan started to lift the state of emergency in some prefectures.

The U.S. experienced devastating winter storms that led to power outages in several states, most notably in Texas, and these negatively impacted economic activity in these states.

A global shortage in semiconductors exacerbated disruptions in the U.S. manufacturing sector.

A protectionist stance by President Biden who kept tariffs on aluminum from the United Arab Emirates added to the supply chain worries, but a U.K. push to join trade agreements such as Trans-Pacific Partnership successor was encouraging for global trade.

In other news, renewed political turmoil in Italy ended with Mario Draghi being appointed as the new Prime Minister.

Monetary policy in the U.S. remained unchanged, apart from Central Bank’s commitment to continue to provide support for the recovery.

The $1.9 trillion fiscal stimulus package was passed by the Senate despite fears of throwing more borrowed money at an economy that is expected to be running hot in summer. The proposed federal minimum wage increase seems increasingly less likely to be passed by the Senate, after the parliamentarians ruled that it cannot be included in a budget reconciliation bill. inflation

In Nigeria, the Federal government approved a new Medium Term Debt Management Strategy for the period 2020-2023.

In line with the Debt Management Office’s previous practice, the new strategy reflects the global and local economic impact of the COVID-19 pandemic and incorporates data from the revised 2020 Appropriation Act and the Medium-Term Expenditure Framework (2021-2023).

The Debt Management Office also hinted at the possibility of exploring funding from the Eurobond market.

However, this will only be done after all the other concessionary sources have been exhausted. Also, in the month under review, Nigeria established its infrastructure company, InfraCo. The board of InfraCo will be chaired by the Governor, Central Bank of Nigeria (CBN) and will include the Managing Director, Nigeria Sovereign Investment Authority (NSIA); President, Africa Finance Corporation (AFC); representatives of the Nigerian Governors Forum; Ministry of Finance, Budgets and National Planning, and 3 independent directors from the private sector.

Inflation.

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Coronation Merchant Bank records 15% PBT growth in 2020

Coronation Merchant Bank Limited, at the weekend, announced its audited financial results for the year ended December 31, 2020, and declared a profit before tax (PBT) of N5.784 billion.

Commenting on the financial results, Banjo Adegbohungbe, managing director of the bank, said, “Despite the challenges in our operating environment, we navigated the headwinds that characterised the year to deliver strong results. In a year when the entire world grappled with the debilitating effects of the COVID-19 pandemic, we strengthened our partnerships with our customers and created sustainable value for our shareholders.”

A further highlight of the financials shows total assets up 63 percent from N253.35 billion in 2019 to N412.36 billion; loans and advances to customers up 69 percent to N122.21 billion as at December 2020 (December 2019: N72.2bn);

Customers’ deposits up 41 percent to N195.16 billion as at December 2020 (December 2019: N138.08bn).

Others show PAT down 1 percent to N5.040 billion (December 2019: N5.097bn), and shareholders’ funds up by 16 percent to N40.11 billion (December 2019: N34.57bn).

The key ratios show capital adequacy ratio: 20.01 percent as at December 2020 (December 2019: 19.17%); regulatory loan to funding ratio: 67.9 percent as at December 2020 (December 2019: 71.1%); NPL ratio: zero percent as at December 2020 (December 2019: 0%); cost to income ratio of 50.3 percent as at December 2020 (December 2019: 51.1%); net interest margin: 1.63 percent as at December 2020 (December 2019: 2.39%); EPS: 100k (December 2019: 101k), and return on equity 15.49 percent as at December 2020 (December 2019: 15.29%).

Despite the volatile environment in 2020, PBT increased by 15 percent from N5.024 billion in 2019 to N5.784 billion, while total assets grew by 63 percent from N253.35 billion in 2019 to N412.36 billion in 2020. Non-interest income grew by 23 percent, mainly driven by trading income that compensated for the declining yield environment in the market.

Risk assets increased by 69 percent as the bank continued to support its customers through difficult times. Cost of risk remained at a healthy level of 0.14 percent while NPLs were nil, reflecting the efficacy of our risk management framework and sound corporate governance. Operating expense grew moderately at 14 percent YoY in spite of the impact of FX devaluation and rising inflation, which closed at 15.75 percent as at December 2020.

During the year, the bank concluded its maiden international credit rating by Fitch with B- (stable outlook) as at December 31, 2020.

Manufacturers Association of Nigeria (MAN) urges CBN to improve credit access for manufacturers

The Manufacturers Association of Nigeria (MAN) has called on the Central Bank of Nigeria (CBN), to help improve credit accessibility for Nigerian manufacturers especially for intervention funds, as poor access to funds constrain the productivity and general operations of the sector.

MAN affirmed that despite the roll out of various intervention funds, manufacturers still cannot access loans due to challenges around the high interest rate and requirements made available by Participating Financial Institutions (PFIs) like commercial and developmental banks who manage the funds and other banks like the Multilateral Development Bank (MDB).

In a communiqué made available to BusinessDay signed by Segun Ajayi-Kadir, director general of MAN, “The Central Bank of Nigeria (CBN) created several development funding windows with ‘single digit’ interest rates to support real productive businesses including manufacturing,

However, notwithstanding the availability of these funding windows, manufacturers still suffer the dual challenges of scarcity of investible funds and high lending rate.”

Manufacturers Association of Nigeria (MAN), noted that to access the N1 trillion COVID-19 stimulus for manufacturing required a working capital of N2 billion per obligator, with a refinancing facility N15 billion per obligator.

In addition to this, the loans have an interest rate of five percent which will revert to nine percent by February 2021, and cannot exceed N10 billion and is being managed by PFIs who prevaricate access.

“Generally, Manufacturers Association of Nigeria (MAN) observed through feedbacks from members and interaction with the CBN on several occasions that these facilities and funds have not been adequately accessible to manufacturers due mainly to the prevarication of the PFIs and MDBs.

WEEK AHEAD: More of same for naira, Bitcoin rally to continue

More of same for Naira

The Naira closed at N411.88 on the I&E window, a 0.21 per cent depreciation from N411.00 which it closed at the previous session on Friday, according to data from the FMDQ Security Exchange.

The currency also lost at the parallel market as data posted on abokiFX.com, a website that collates parallel market rates, showed that the currency closed at N482.00, a 0.42 per cent depreciation from N480.00 as it exchanged hands on Friday. As a result of this, the spread between the unofficial market and the I&E window exchange rate is pegged at N70.12, which translates to a gap of 14.54 per cent. A look at the data tracked from FMDQ indicated that forex turnover increased from $36.92  million recorded on Wednesday, March 10, 2021, to $192.11 million on Thursday, March 11, 2021, being the highest dollar supply recorded in two weeks. However, the coming week wouldn’t be any different as the Naira is anticipated to continue to fluctuate around the threshold of N406/$1 and N412/$1.

Bitcoin’s bullish trend intensifies

It’s no longer news that the world’s most popular crypto has got its mojo back, but what seems to be news is that leading crypto experts are anticipating that the bullish rally is still in its early stages amid the fact that it has risen more than eighteen folds within a year. The crypto soared higher on Saturday and was trading at $61,050.29 with a daily trading volume of about $60 Billion. Bitcoin is up 23% for the week. It’s currently the most valuable crypto with a market value of $1.14 Trillion.

The flagship crypto’s importance for “commerce on the internet” has also helped its credence among a significant number of millennials globally. Its important to note that the strong holding fundamentals that have kept the flagship crypto above the $55,000 price levels in the past few days are the strong hands that came in to buy this latest dip. Finally, it’s key to note that Bitcoin is becoming very scarce, amid the bias that its present supplies are arbitrarily squeezed by strong institutional buying, as recent data reveal Bitcoin’s supply has been dropping for 12 months. Also, recent developments indicate that Zugacoin Cryptocurrency, founded by a Nigerian, Naira can now be comfortably used to purchase any type of vehicle, motorcycles, plastics and all the other products under the INNOSON Group anywhere in the world. This follows the sealing of a business partnership deal between Archbishop SamZuga of Zugacoin and Chief Dr Innocent Chukwuma of Innoson vehicle manufacturing company on Saturday, March 13, 2021. With these dynamics in play, the week ahead looks promising for the flagship crypto (Bitcoin) amongst others.

Oil prices continue rally

Brent Crude oil on Thursday 11th March 2021 gained momentum as it rose by 2.55% to close at $69.63, indicating a recovery from its slump recorded on Monday and Tuesday. The price of Brent Crude had topped $70 per barrel in the early hours of Monday this week before sliding down on account of the news of an attack by rebel Houthi rebel on the Saudi oil infrastructure on Sunday. The recent increase in oil price can be attributed to OPEC+’s decision to maintain the current production cuts for another month. According to the Foreign Minister of Saudi Arabia, Prince Faisal bin Farhan, while speaking after a meeting with his counterpart from Russia, Sergey Lavrov, the Organisation of Petroleum Exporting Countries is looking for a “fair” price for its crude. Afterward, Lavrov noted that the OPEC+ alliance was strong and there was nothing that could at this point undermine the good working relationship between Russia and Saudi Arabia. This is a strong indication that both parties are in synergy towards ensuring that Crude oil price continues its current bullish run, hence good news for oil in the week ahead.

External reserves on steady dip

Nigeria’s external reserve declined by 0.13% to stand at $34.67 on Wednesday, 10th March 2021 being a record low in 10 months. The country’s external reserve declined from $34.71 billion recorded as of Tuesday, 9th March 2021 to stand at $34.67 billion as of 10th March 2021. Nigeria’s current external reserve position indicates a total loss of $433.68 million in the month of March 2021. With the current unattractive investment environment coupled with the ripple effects of the COVID19 pandemic, Naira FPI’s aren’t likely to be motivated any time soon, hence depletion of our external reserve is most likely to persist in the week ahead.

NSE-30 companies post N1.13trn loss year to date

The top 30 companies listed on the Nigerian Stock Exchange (NSE) known as the NSE-30 have lost a total of N1.13 trillion in market capitalization year to date. The elite list, which consists of the top 30 companies in terms of market capitalization and liquidity, recorded a decline of 6.66% in market capitalisation from N17.00 trillion recorded as of 31st December 2020 to stand at N15.87 trillion as of 12th March 2021.

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