Connect with us

General News

Access to Finance Requisite for Economic Growth – EFInA

Published

on

Kindly share this post

Enhancing Financial Innovation and Access (EFInA) in its finding has submitted that given significant financial sector reforms and private sector innovations, access to finance is poised for growth in Nigeria.
The report provides a diagnostic of access to finance and identifies key issues for microfinance, branchless banking and SME finance.
Microfinance
The Microfinance Policy, Regulatory and Supervisory Framework for Nigeria developed by the CBN in 2005 initiated an important turning point in the industry with the creation of the Microfinance Bank (MFB) as an institutional vehicle for privately owned, deposit-taking microfinance institutions (MFIs). Prior to this, a few notable Non Governmental Organisations (NGOs) were established that have grown to provide microfinance in a sustainable manner according to international standards of good practice. However, until recently the majority of institutions have been smaller NGOs, community banks, cooperatives, and non-bank financial institutions with uneven management capacity, low outreach to clients, and challenges to becoming profitable.
The framework is designed to unite the best of the NGO credit organizations, the privately owned community banks and the new MFI initiatives under a common legal, regulatory and supervisory regime. The microfinance framework catalyzed two driving forces in the microfinance industry at an extraordinary pace and scale. First is the immediate investment of capital by large number of Nigerian and international investors in newly created MFBs. The second force is the new regulation and supervision framework for this emerging industry. The rate of growth in the microfinance industry, measured by number of institutions, capitalization, or portfolio growth, is among the fastest of any microfinance industry globally at similar early stages of development.
As part of the microfinance policy framework, the CBN in collaboration with the bankers Committee created the Micro Credit Fund (MCR) to partner with state governments to channel credit to the micro enterprise sector. The CBN reports that the balance of funds available to the MCF at the end of 2007 was around N20 billion. Specific lending policies for the MCF were not shared with the diagnostic team. In itself, the MCF reflects an emphasis on credit that is pervasive in Nigerian policy discussions around access to finance. If large volumes of wholesale funds are made available to the MFBs, they will have less interest in providing savings services and may become dependent on wholesale borrowing to fund growth.
Branchless Banking
The main payment instruments available in Nigeria include large-value credit transfers, cheques, retail electronic debit and credit transfers, and payment card systems, among others. Electronic purses (a form of stored value cards), internet-based banking along with mobile payment services. Fir the first seven months of 2009, ATM transactions represented nearly 91 percent of the value of all electronic fund transfers in Nigeria. For the first seven months of 2008, point of sale (POS) transactions represented over 4 percent of the value of all electronic fund transfers in Nigeria. The POS penetration rate represents a ratio of less than 50 POS terminals per 1million inhabitants. The CBN is in the process of drafting mobile payment guidelines to promote branchless banking. Discussions with members of the CBN’s Banking Operations Department indicates that there is a well developed understanding of the many legal domains implicated by a comprehensive branchless banking regulatory regime. These domains include the often complicated issues presented by the use of agents, Anti-money laundering/combating financing of terrorism (AML/CFT) and consumer protection. Given that effective branchless banking requires the cooperation of parties outside the control of the CBN, such as telecommunications service providers and consumer protection agencies, it is unclear how effective the mobile payments guidelines will be in practice. In addition, even parties under CBN supervision, such as private switch operators, appear to be resistant to CBN efforts at promoting interoperatability, a primary component of expanding access to finance. However, reports indicate that draft operational rules for interoperatability through a national switch are awaiting CBN approval.
SME Finance
SME finance is constrained by lack of data, regulations and infrastructure for collateral and insufficient credit information. Policy making for the sector is severely constrained by the lack of data that would allow a better understanding of the problems and performance of ongoing initiatives. Regulations require loans to be collateralized and limit the types of acceptable collateral. At the same time the laws relating to security over movables (i.e., equipment) are antiquated, fragmented and do not offer Nigerian businesses an effective means of raising capital. The current credit information system does not address the needs of the SME sector. However, with quick approval of well designed regulations, a competitive and open credit information industry where private credit bureaus working alongside the Credit Risk Management System (CRMS) can quickly begin to cover the population.
With some exceptions, there are no real SME finance products. Banks and other authorities tend to treat SMEs as “small corporates” with no clear understanding of SME profiles. Globally, leasing is a widely-used service for SMEs, although the lack of a leasing law is constraining development of this sector in Nigeria. Finance companies have limited tools for credit risk assessment and lack of information and understanding of value chains that are important in the development of factoring services.  
Recommendations
Greater transparency of financial performance and market information and strengthening capacity at all levels.
Moving quickly on promoting financial infrastructure could help Nigeria’s financial sector modernize and significantly expand access to finance through the design of new laws, regulations and guidelines to upgrade the payment system, private credit registries and collateral registries.
Harmonize all AML/CFR regulations to permit clear operation of risk-based approach.
Enhancing consumer protection by facilitating consumer access to credit reports and requiring disclosure of “disputed” status.
The establishment of a consumer protection body dedicated to protecting consumers of all financial services, not just mobile payment services, given the growing diversity and complexity of the market.

 

 


Kindly share this post

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

Continue Reading
Advertisement
Comments

General News

Kuda Unlocks Instant Online Accounts for NGOs and Religious Bodies

Published

on

Kindly share this post

Kuda has updated its business banking services to allow NGOs and incorporated trustees to open and manage business accounts entirely online. The move means religious organisations, charities, and other registered organisations no longer have to navigate the long wait and paperwork traditionally associated with setting up a business account.

Kuda Unlocks Instant Online Accounts for NGOs and Religious Bodies

Nosa Oyegun,

On the Kuda Business app, organisations registered with Nigeria’s Corporate Affairs Commission (CAC) can choose the NGO option during signup, submit their CAC documents, and provide trustee details. Once verified, accounts are activated within minutes, a significant reduction from the days or weeks it can take under traditional business banking processes.

For many NGOs and religious institutions, handling donations, grants, and operational expenses has long been slowed by manual systems and branch-based requirements.

The Kuda Business update is expected to make financial management faster and more transparent, allowing organisations to focus on their mission instead of battling administrative bottlenecks.

Nigeria is home to thousands of registered NGOs and religious organisations, with Lagos State alone accounting for over 10,000 churches and mosques as of the last count in 2021. Across the country, incorporated trustees play a critical role in education, healthcare, humanitarian response and community development. Despite their scale and economic relevance, access to modern digital banking tools has remained limited for many of these institutions.

Nosa Oyegun, SVP Business Banking at Kuda, said the update is proof of Kuda’s focus on removing structural barriers that slow Nigerian organisations down. “NGOs and religious organisations are responsible for managing funds that directly impact communities, yet they are often forced to operate with outdated banking processes,” he said.

“By enabling incorporated trustees to open Kuda Business accounts entirely online quickly, we’re giving these organisations access to the same modern financial tools built by Kuda that other businesses already use, so they spend less time doing admin work.”

With Kuda Business, NGOs and religious organisations can manage incoming donations and grants, make payments, track transactions in real time, generate professional account statements for audits and reporting, and grant controlled access to trustees, treasurers and administrators, all on a single app.

Kuda designed the account signup process to meet regulatory requirements while significantly reducing manual reviews and customer support workload. Automations shorten notoriously long business signup timelines while improving information accuracy and user experience.

As reforms promoting cashless payments and digital financial services take hold in Nigeria, NGOs and religious organisations are under increasing pressure from donors, partners and regulators to operate with greater financial transparency and efficiency.

The new Kuda Business update is therefore timely, offering a dedicated digital account specifically designed for this segment, unlike many traditional banks and fintech platforms that treat incorporated trustees as special cases requiring comparatively slower manual intervention.


Kindly share this post
Continue Reading

General News

Catholic Bishops Urge FG to Give Tax Laws Human Face

Published

on

Kindly share this post

Catholic Bishops of the Ibadan Ecclesiastical Province has called on the Federal Government to implement the ongoing tax reforms with equity, openness and empathy, cautioning that policies devoid of human consideration could further compound the suffering of millions of Nigerians.

Catholic Bishops Urge FG to Give Tax Laws Human Face

The appeal was contained in a communiqué released after the bishops’ first provincial meeting for 2026, which took place at the Jubilee Conference Centre in Ibadan, Oyo State.

The document was jointly signed by Most Rev. Gabriel Abegunrin, chairman of the Ibadan Ecclesiastical Province, and Most Rev. John Oyejola, secretary.

Recall that the tax reforms were introduced by the administration of President Bola Tinubu and assented to on June 26, 2025.

They officially came into effect on January 1, 2026, and have continued to attract diverse reactions across the country.

In the communiqué, titled “Sustaining Hope and Strengthening Our Good Efforts,” the bishops acknowledged the government’s desire to overhaul Nigeria’s tax system but expressed concern that its implementation had sparked widespread unease and debate, especially among the poor and vulnerable.

“The reforms should be anchored on fairness, transparency and accountability, urging the government to apply them with compassion.

“The bishops also advised that vulnerable citizens should be given sufficient time to adapt to the new tax regime before strict enforcement measures are introduced.”

The clerics warned that economic policies pursued without sensitivity could widen inequality and heighten social unrest, noting that taxation should not become an added burden for Nigerians already grappling with inflation, unemployment, and rising costs of living.

The bishops encouraged Nigerians to remain hopeful while backing prayers with responsible citizenship, diligence and respect for justice and the rule of law.

“As shepherds of God’s people, we urge Nigerians to reject cynicism and despair. Prayer must be accompanied by good works. This is the only country we have,” the communiqué concluded.


Kindly share this post
Continue Reading

General News

Taraba Adopts Electronic Case Management System

Published

on

Kindly share this post

Taraba State in Nigeria has developed an electronic platform for filing criminal cases in the state’s High Courts, marking the implementation of the new National Case Management System.

The launch, announced on Monday, marks a move from manual to electronic filing of criminal cases and is part of attempts to reform court processes and expand access to justice using technology.

Governor Agbu Kefas stated that the action underlines the government’s dedication to institutional strengthening, the rule of law, and effective governance.

Kefas pledged continued government support for the judiciary, noting that technology is essential for delivering swift, fair and transparent justice.

He also stated that the state would give the resources and infrastructure required to maintain the ongoing judicial reforms.

Justice Joel Agya, Chief Judge of Taraba State, stated that the e-filing facility will enable the electronic filing of originating processes and subsequent applications.

He explained that the system would enhance case tracking from filing to final determination while reducing delays caused by manual registry procedures.

Justice Agya went on to say that the platform would improve the security and accessibility of court records, as well as help judges manage dockets and time better.

He emphasised that the platform is intended to supplement rather than replace judicial decision-making, ensuring that administrative procedures do not impede the delivery of speedy justice.

The development is consistent with a broader national push to digitalise judicial processes across Nigerian courts, which has already been implemented in several regions.


Kindly share this post
Continue Reading

Trending