E-Financial
CBN Mulls New Credit Mechanism for Real Sector @ Single Digit
To encourage banks to give credit to the real sector of the economy, at single digit rates, the Central Bank of Nigeria (CBN), has offered to complement the effort of Deposit Money Banks (DMBs) through a mechanism to support banks that lend to corporate entities at single digit rate.
Addressing journalists at the end of the Monetary Policy Committee (MPC) Meeting in Abuja, which saw the retention of all monetary rates, the CBN Governor Mr Godwin Emefiele disclosed that the mechanism “is not meant to bring competition among Deposit Money Banks, but it is meant to complement their efforts.”
According to Emefiele, “the most important thing is that we want to see to it that we achieve a single digit rate. We believe this will work because rather than the banks keeping the money in the reserves they can key into this and promote these transactions as long as they meet the terms and conditions.”
Specifically, Emefiele said “a differentiated dynamic cash reserve requirement regime will be implemented to direct cheap long term bank credit at nine per cent and a minimum tenor of seven years and two years moratorium to the employment elastic sectors of the economy.”
Details of this framework he said are being worked out by the banking supervision and the monetary policy departments and will be released very soon stressing that more details on this new mechanism “will be provided soon for the banks and everybody to know.
MPC was concerned that credit to the economy was sliding and we looked at means to incentivize the Deposit Money Banks to increase credit to the real sector.”
The MPC was of the opinion that while it is difficult to encourage job creation in an environment within deficit infrastructure, the committee believes that the bank should continue to encourage Money Deposit Banks to increase the flow of credit to the real economy to consolidate economic recovery.
To achieve this, Emefiele noted that two approaches were considered: the first approach, in order to achieve the objective of lowering interest rate particularly to those priority sectors- manufacturing sectors, agric sector, the CBN “will encourage large corporates to issue commercial papers/note to the market and there will be a memorandum that will detail explanations of what they are going to do with that money.”
In order to complement the effort of the banks, the CBN he said “will expect that this commercial papers will come at low rate of single digit of 9 per cent or below that and for long tenor at least a period of 7 years with a specific purpose for that loan.”
If central bank sees that kind of notes in the market, Emefiele noted that the “CBN will complement the effort of the banks through a mechanism to support that bank that lends to that corporate at single digit rate.
It is not meant to bring competition in the money deposit banks, it is meant to complement their efforts. The most important thing is that we want to see to it that we achieve a single digit rate.”
The second approach he said is “if a bank lends money for new projects and planned expansions, verifiable not refinancing, to a project for seven years inclusive of two years moratorium at 9 percent interest rate, that the bank providing this evidence and verified by the central bank, we will go into that bank’s CRR and release equivalent of that cash from our CRR at zero kobo spread.”
Emefiele explained further that “in this case, that bank earns its 9 percent of that money. We feel this is novel; it is something that we should give a chance.
In the past we have reduced CRR and release liquidity into the market but the liquidity was not channeled properly to the high impact corporations – we mean employment generating sectors or output improving sector of the economy.”
Updating journalists on the Chinese Currency swap deal, the CBN Governor revealed that they “opened the first auction last week Friday and the result from that auction will be released on Friday, but from the preliminary information I heard is that it was a successful auction. The details will be unfolded by Friday.”
About the declining foreign reserves from $47.7 billion in May to $47.2 billion in June, Emefiele said “this has nothing to do with politics. What is happening is as a result of US Fed normalisation.
Since the interest rate has gone up in the US, and other advanced economies, in an attempt to stimulate their economies, these money that moved into the emerging economies have now being taken back and this means there will be so much outflow of cash than inflow of cashflow, and of course we have our own share of it.”
He noted that “Nigeria has performed better than other emerging market around the world, with a stabilized exchange rate that has remain stable because we have been able to build enough buffer to support our currency and that is why the exchange rate has remain stable.
Countries like South Africa and others have had their currencies depreciated but the Naira remains stable at N360/$ at this time.”
Speaking on the outcome of the MPC meeting in general, Emefiele said “MPC commended the approval of the Federal Government’s 2018 budget and called for the accelerated implementation to further support the fragile growth recovery.”
The committee also called for sustained implementation of the Economic Recovery and Growth Plan (ERGP) to further stimulate output growth.
However, the MPC was “concerned about the liquidity impact of the 2018 expansionary fiscal budget and increasing FAAC distributions due to rising prices of crude oil as well as the buildup in election related activities.”
Exactly two years after the MPC decided to hold rates at 14%, at the end of Tuesday’s meeting, MPC again voted to retain the: Monetary Policy Rate (MPR) at 14.0%; Cash Reserve Ratio (CRR) at 22.5%; Liquidity Ratio at 30.0%; and Asymmetric corridor at +200 and -500 basis points around the MPR.
Defending the MOC’s decision, Emefiele stated that “in the discussion for a hold, it was noted that risk to the macroeconomic and financial environment appears fairly balanced with improvement in output growth and inflation.”
Holding policy at the current stand he said “will support growth and further moderate inflation. However, committee noted the appetite of the public for loosening and concern that hold MPR at 14 per cent since July 2016 and considering the dynamic nature of the market, the rates might have lost its signal effect on the market, hence dampen market expectations.”
“The argument in favor of maintaining the current policy stand, is to monitor the magnitude of the liquidity impact of the fiscal injections and elections related expenditures ahead of the 2019 elections” he explained.
OneWallet microfinance Bank is partnering Zenith bank and MTN to build a platform that will provide digital financial services to support the growth of Small and Medium Scale Enterprises (SMEs) businesses in Abia State.
Dr. C Darl Uzu, Chairman of OneWallet, who disclosed this while launching the platform for traders at the Ariaria International Market, Aba, Abia State said it was meant majorly for traders and the SMEs because they are the bedrock of the Nigerian economy.
According to Dr. Uzu, “We want to expand the inclusion of small businesses in digital financial services by making it easy for them to make and receive payments on affordable digital devices, hence the UnionBell Smart phones and POS.
“We want to help SMEs to access financial support and loan easily to grow their business, and also help businesses to build the history and credibility they require for future growth and expansion.”
He said OneWallet was not created just as a payment application, but as a business support platform designed around the real needs of SMEs.
Dr. Uzu said the choice of Ariaria International Market as the pilot for the platform was intentional since the market is one of the strongest symbol of enterprise in Nigeria.
“We are not here however to teach Ariaria people how to trade because Ariaria already understands business, but we are hear to support Ariaria business energy with tools that can help businesses do more, reach more customers, organize better and prepare for bigger opportunities; we are here to help Ariaria innovate and grow.”
He thanked MTN, Zenith bank and the leadership of the traders for partnering OneWallet to provide the platform that help businesses to expand.
A representative of MTN at the launch, Dr. Ernest Chieke described OneWallet as a platform for individuals and SMEs which intend to move their businesses forward.
He expressed joy that his firm was partnering OneWallet to bring solution to SMEs’ financial problems.
Carl Akwarandu who represented Zenith bank at the event said the bank decided to partner OneWallet because it has a unique product that will make small businesses grow faster.
He promised that Zenith bank would give OneWallet all the support it needs to make it number one microfinance bank in the country.
The Director of OneWallet, Dr. David Nwosu described the microfinance bank a one stop-touch for SMEs growth.
He said at OneWallet, collateral are not needed to obtain loan, but the individual’s business history.
A member of the board of the microfinance bank, Wiedong Wang, commended Dr. Uzu for establishing OneWallet.
He expressed optimism that with the help of its partners, OneWallet will excel.
Central Bank of Nigeria (CBN) has warned non-interest financial institutions against governance and compliance risks capable of undermining public confidence and financial stability in the country’s growing Islamic finance sector.
Interest-free banks, often known as non-interest or Islamic banks, operate without charging or paying traditional interest (Riba).
The warning was contained in a press statement issued by the apex bank following the 2nd Annual Interactive Session between the CBN Financial Regulation Advisory Council of Experts and the Advisory Committees of Experts of Non-Interest Financial Institutions held at the CBN Auditorium in Abuja.
Speaking through Dr Rita Sike, director of the Financial Policy and Regulation Department, Philip Ikeazor, deputy governor, Financial System Stability, said the rapid expansion of the industry had increased exposure to operational and regulatory vulnerabilities.
The statement read, “The Deputy Governor, however, observed that as the industry grows in size, sophistication, and interconnectedness, it faces unique risks, particularly non-compliance risk, governance challenges, operational vulnerabilities, and emerging technological risks.
“He warned that such risks, if not properly managed, could undermine public confidence, financial stability, and the overall credibility of the non-interest finance ecosystem.”
According to the CBN, the engagement was part of ongoing efforts to strengthen Shariah governance, improve regulatory clarity, and reinforce risk management standards within the non-interest financial services industry.
The apex bank noted that non-interest financial institutions continued to play an increasingly important role in Nigeria’s financial system by providing ethical and Shariah-compliant alternatives to conventional banking.
It stated that the institutions were also contributing to financial inclusion, real sector financing, micro, small, and medium enterprises development, and shared prosperity.
The CBN further explained that the establishment of FRACE and the mandatory constitution of ACEs across all non-interest financial institutions were designed to institutionalise a harmonised governance framework for the sector.
According to the statement, sustained interaction between FRACE and ACEs remained critical to ensuring that regulatory expectations were properly understood and consistently implemented across the industry.
“The objectives of today’s session include fostering the institutionalisation and effective operation of a robust Shariah governance system within Non-Interest Financial Institutions, and providing a structured platform for dialogue, knowledge-sharing, and collaboration,” Ikeazor was quoted in the statement.
In his remarks, Prof Bashir Umar, deputy chairman of FRACE, said the interactive session was aimed at strengthening governance within the non-interest finance sub-sector and promoting constructive engagement between regulators and industry advisory committees.
He also commended the management of the CBN for reviving the session, which was first introduced in 2014.
Earlier in her welcome remarks, Sike reaffirmed the apex bank’s commitment to building a strong and well-governed non-interest financial services industry.
She noted that the growing diversity of products and delivery channels, particularly the emergence of Islamic fintech, had increased the need for stronger regulatory oversight and continuous engagement among industry stakeholders.
“The growing diversity of products, institutions, and delivery channels, particularly with the emergence of Islamic fintech, underscores the need for continuous dialogue, sound regulatory oversight, and robust advisory input from scholars and practitioners,” she said.
The session featured technical presentations on Shariah non-compliance risks in non-interest banks and the role of Islamic fintech in driving financial inclusion.
Participants at the event included members of FRACE, chairmen and members of various ACEs, managing directors of non-interest banks, senior CBN officials, and representatives of the Bank of Industry and the Securities and Exchange Commission.
Federal government is in discussions with the World Bank over a proposed $1.25 billion loan facility aimed at supporting economic reforms, job creation, and competitiveness programmes across Nigeria.
A World Bank document titled Nigeria Actions for Investment and Jobs Acceleration showed the facility has moved beyond the concept and appraisal stages and is now scheduled for a decision meeting ahead of a planned Board presentation on June 26, 2026.
If approved, the loan would become Nigeria’s second-largest World Bank financing package after the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
The document listed the Federal Republic of Nigeria as the borrower, while the Federal Ministry of Finance will serve as the implementing agency.
It explained that the project is currently at the decision-meeting stage of the World Bank’s project cycle, where final appraisal documents undergo internal review before submission to the Board of Executive Directors for approval.
At this stage, the institution confirms policy actions, financing terms, and reform commitments already agreed in principle between Nigeria and World Bank teams.
It also said the proposed facility will support government efforts to expand access to finance, digital services, and electricity, while strengthening competitiveness through reforms in taxation, trade, and agriculture.
World Bank says loan will support finance, digital access, and electricity reforms
Between June 2023 and May 2026, the World Bank approved about $9.35 billion in loans and credits for Nigeria across key sectors including power, education, healthcare, agriculture, renewable energy, social protection, and MSME financing.
Major approvals during the period include the $2.25 billion RESET and ARMOR reform financing in June 2024, $1.57 billion for HOPE and SPIN programmes in September 2024, and $1.08 billion for education and resilience projects approved in March 2025.
Lagos Captures over 6.4m Residents in LASRRA Database
FG to Launch Nationwide Free Digital TV Platform June 17
FG, World Bank Launch $65m SPESSE Funding for 24,000 Nigerians
FG to Balance Innovation with National Security with Stronger Drone Regulations
Kaspersky Challenges IT Leaders with Next-generation Cyber Protection Simulations
Vitel Wireless Partners Fintechs to Expand Access to Services
Kaspersky Discovers Vulnerability in Qualcomm Snapdragon Chips that can Lead to Data Loss & Device Compromise
MTN, VDT, Zoracom, Digital Realty Back 2026 Girls in ICT Campaign
MTN Suspends Data, Airtime Borrowing Service over New FCCPC Lending Rules
Bank Customers to Pay N1,500 for ATM Card Issuance, Replacement – CBN
Telecom2 days agoMTN, Airtel, Glo Under Pressure as FG Demands Better Service Delivery
E-Financial2 days agoMastercard, BMONI Launch Multi-Currency Payment Cards in Nigeria
E-Business2 days agoFirm Warns of Phishing Attacks via Compromised Amazon Simple Email Service Accounts
General News1 day agoPalmPay, LASUBEB Deepen Efforts to Keep More Children in School
News2 days agoDr. Olusola Teniola, Honoured with Yoruba Study Group Golden Leadership Excellence Award
General News2 days agoMoniepoint Partners GDG Lagos, Women Techmakers to Empower the Next Generation of Women Architects in Tech
General News2 days agoGoogle Disrupts AI-Driven Cyberattack, Warns of Emerging Security Risks
Broadcasting2 days agoMetro Digital, Nigerian Firm Accuses Multichoice Of Refusal to Obey Court Judgements