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Access to Finance Requisite for Economic Growth – EFInA

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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.

 

 


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NCC Arrests Man for Hacking into DSTV System

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Nigeria Copyright Commission (NCC), has arrested one Mr Aliu Olalekan, for allegedly hacking into DSTV system and watching the channels free without subscription.

NCC Arrests Man for Hacking into DSTV System

Mr Matthew Ojo, NCC Director in the Lagos Directorate Office said this while speaking with newsmen in Lagos, on Tuesday.

He said that the suspect used to watch DSTV channels free without subscription on his Android phone via an app which he downloaded on google play store.

“This suspect distributed the know-how to his telegram followers and on his blog with the aim of gaining more followers and viewership on his blog and makes more money through google ad-sense.

“The operation was based on surveillance which had earlier been carried out by the Multi-choice team and verified by a copyright inspector, ” he said.

He added that the arrest was made in collaboration with a team of copyright inspectors led by the Head of Enforcement Department, Mr Charles Amudipe.

Others included; a team from Multichoice Nigeria led by Mr Umar Ibrahim and policemen from Lagos Command Headquarters, Ikeja.

Ojo said that the joint team conducted an anti-piracy operation at the premises of the culprit in Amukoko, Lagos.

According to him, the suspect was contacted on phone by a member of the operation team on the disguise of patronising him. “The suspect came out to meet the caller and in the process of discussion, he was apprehended.

“The suspect took the team to his resident. The squad paraded his one-room apartment and recovered his laptop and phones used in perpetrating the ungodly act. “He was arrested and brought to the copyright commission office for further investigation, ” he said.

Ojo said that, on getting to the commission’s office, the statement of the suspect was taken and the inventory of items seized from him taken. He said that investigation on the matter was still ongoing and if found guilty the suspect will be charged to court.

 


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NCC, Digital Encode Support NITRA Innovative Tech Forum On Post-COVID-19 Strategies

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The Nigerian Communications Commission (NCC), Nigeria’s telecommunications regulator and Digital Encode, Cybersecurity and Compliance advisory company, have indicated interest to partner with the Nigeria Information Technology Reporters Association (NITRA), the national umbrella body of ICT reporters, as it organizes a forum that will x-ray the industry’s future plans for ICT growth post pandemic era.

 

The event, slated to hold on October 15, 2020, will seek to discuss the needs for a fortified ICT sector after the COVID-19 era, and the level of preparedness of ICT stakeholders to embrace the challenge of being pivotal to the stability and growth of all other sectors.

 

A statement from NITRA National Secretariat in Lagos indicates that due to the pandemic and need to observe the COVID-19 protocol on social distancing, the event will be held via a Webinar.

 

This year’s theme, “Multi-stakeholder Approach To National Recovery Post-Pandemic”, is in line with the annual event’s generic theme, ‘NITRA Innovative Tech Forum’, a contribution by NITRA to the development of Information and Communication Technologies (ICTs) innovations and policies in Nigeria.

 

Prof. Umar Danbatta, executive vice chairman, NCC is expected to deliver the keynote speech at the event and will throw more light on Federal Government’s plans, programmes and policies on post-pandemic strategies using ICT.

 

Dr. Adewale Obadare and Dr. Seyi Akindeinde, founders of Digital Encode, while accepting to support the event expressed their readiness to offer their expertise in Cybersecurity for organisations to prepare against cyber- attacks with the new normal.

 

They will also highlight areas that are high risks that need fortification in terms of cybersecurity.

 

Speaking on the event, Mr. Chike Onwuegbuchi, national chairman, NITRA, noted that as the COVID-19 pandemic continues to leave its negative trails across the globe, economic reboot for countries will not only depend on how well they readapt to the new normal, but also more on their recovery plans.

 

According to him: “While the federal government has consistently expressed its willingness to set all policies in place to engender growth, and accelerated implementation of these policies, private sector firms have also shown great hunger for the task ahead in post-COVID-19 era.

 

However, the question that needs to be answered is whether all stakeholders are ready for the required task ahead.”

 

The event will also offer participating companies opportunities to publicize some of their individual efforts at contributing to reacting a soft landing or lifeline for SMEs and other ancillary companies as the pandemic threatens their survival.

 

Digital Encode is a multi-award winning and leading consulting and integration firm that specializes in the design, management, and security of business-critical networks, telecommunications environments and other Information Technology (IT) infrastructures.

 


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NCC Threatens Illegal Users of GSM Boosters with Arrest, Prosecution

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Nigerian Communication Commission (NCC) has warned telecom consumers to desist from using illegal GSM boosters.

NCC Threatens Illegal Users of GSM Boosters with Arrest, Prosecution

The commission also said that anyone caught using a GSM booster without obtaining approval of a duly licensed network operator will face arrest and prosecution.

GSM boosters are devices that transmit and receive telecommunications signals and can therefore interfere with other radio frequency equipment.

Ikechukwu Adinde, director, public affairs, NCC, said in a notice published on NCC website, that only licensed network operators are allowed to use GSM boosters.

The booster, also known as amplifier or repeater is made up of three main elements – exterior antenna, amplifier, and interior antenna.

They form a wireless system to boost cellular reception

“Members of the public should note that, willful interference with any wireless telegraphy is an offence under Section 16 of the Telegraphy Act, 2004,”it said

The agency said it will not condone any flagrant breach of this law.

It has also enforced measures to prosecute offenders.

Accordingly, monitoring mechanisms have been put in place and anyone caught using a GSM booster without obtaining approval of a duly licensed network operator will face arrest and prosecution.

“Any member of the public with useful information regarding the illegal use of GSM Boosters should contact the Commission on 09-4617000/7351 or send an email to [email protected],” the notice said.

“Individuals desirous of using GSM Boosters should note that they can only do so in conjunction with licensed network operators,” it added.

 

 


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