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.
First City Monument Bank (FCMB) has introduced a set of new features on its mobile app, led by a reward points system that turns everyday transactions into tangible benefits for customers.
With this update, FCMB shifts the focus from routine banking to value creation, giving customers a stronger reason to engage, transact, and stay within its digital ecosystem.
At the centre of the upgrade is the Reward Points feature, which allows customers to earn and redeem points on transactions made in the app. The more customers use the platform, the more value they unlock, creating a direct link between daily banking activity and real-life rewards.
Beyond the rewards, the enhanced app introduces a Regal Premium Lifestyle Subscription that offers users access to curated lifestyle benefits across travel, dining, and entertainment, plus a three-month free transfer for new-to-bank customers.
Customers can now access mutual fund investments directly within the app, helping them grow wealth without multiple platforms. This feature reinforces FCMB’s commitment to empowering customers with accessible financial tools.
To improve customer experience, the app now includes “Chat with Temi”, an intelligent in-app support feature that delivers instant assistance and quicker issue resolution.
Speaking on the update, Oladipo Alabede, divisional head, Payments and Solutions, said: “At FCMB, we are constantly innovating to meet the evolving needs of our customers. These features are designed to provide convenience, reward loyalty, and empower our customers to do more with their finances, right from their mobile devices.”
In line with its financial inclusion drive, FCMB has simplified account upgrades from Tier 1 to Tier 2, allowing customers to access enhanced banking services without visiting a branch.
Additionally, the introduction of instant virtual card request and activation ensures customers can immediately create and use secure digital cards for online transactions.
Adetunji Lamidi, divisional head, Personal Banking, emphasised the Bank’s digital transformation journey: “These upgrades reflect our technology-driven strategy to build a smarter, more intuitive banking platform. By integrating intelligent support systems like Temi and enabling instant services such as virtual card activation, we are redefining convenience and accessibility in banking.”
This comprehensive upgrade reflects FCMB’s ongoing commitment to innovation, customer focus, and digital excellence, positioning the mobile app as a one-stop platform for seamless, rewarding, and future-ready banking.
Customers are encouraged to update or download the FCMB Mobile App today from their app store to use these new features and take full control of their financial journey.
Nigeria has accessed the first tranche of its $5 billion derivatives financing arrangement with First Abu Dhabi Bank (FAB), drawing about $1.5 billion under the deal approved by the national assembly in March.
This is despite caution by the International Monetary Fund (IMF) against proceeding with the proposed $5 billion structured Total Return Swap (TRS) financing program with First Abu Dhabi Bank.
IMF said that the complex derivative-based financing agreements are often opaque and carry hidden financial risks.
According to Bloomberg on Friday however, the federal government received the funds in the past two weeks through a structured total return swap (TRS) transaction with the United Arab Emirates’ largest lender, citing people familiar with the matter.
On March 31, the national assembly approved President Bola Tinubu’s request to secure up to $6 billion in external borrowing.
The borrowing plan comprised two facilities from the United Arab Emirates (UAE) and the United Kingdom, including a structured TRS financing programme of up to $5 billion from First Abu Dhabi Bank.
Advertisement
Tinubu had said the proposed borrowing would increase Nigeria’s public debt stock, which stood at $110.3 billion (about N159.2 trillion) as of December 31, 2025.
The drawdown comes despite concerns raised by Fitch Ratings over the financing arrangement.
Fitch warned that while such transactions can provide liquidity, diversify funding sources and lower borrowing costs, they often fall outside conventional debt-reporting frameworks and could weaken transparency and legislative oversight.
The rating agency also said the structure could expose Nigeria to additional foreign exchange risks if domestic bond yields rise or the naira depreciates.
Also, the International Monetary Fund has cautioned that the derivative-based financing arrangements are often opaque and complex, making it difficult to assess the full extent of governments’ debt obligations.
Paystack has launched Paystack Index, an experimental AI-powered payments tool, enabling users in Nigeria to complete everyday transactions through AI assistants such as ChatGPT and Claude.
The product allows users to buy airtime, send money via Zap by Paystack and order food from Chowdeck using simple text prompts. Instead of switching between multiple apps, users can instruct an AI assistant to execute transactions directly.
Paystack Index acts as a bridge between AI agents, merchants and Paystack’s payments infrastructure, while ensuring users retain control of authorised transactions.
The company said it does not store sensitive financial information such as card details, PINs or bank account credentials.
Developed with support from TSG Labs, Paystack’s innovation arm, the product builds on Paystack Checkout and Zap and forms part of the company’s broader work on AI-enabled commerce.
It is initially available to selected Zap users in Nigeria through an early-access beta programme and currently supports airtime and data purchases, wallet funding, money transfers and food orders.
Paystack said the launch reflects its belief that AI agents are emerging as a new interface for commerce, enabling users to move from prompts to real-world transactions.
Announced by co-founder and chief executive officer Shola Akinlade, the product positions AI assistants as execution layers for payments and commerce, rather than just tools for information and recommendations.
The launch comes amid rising AI adoption in Nigeria. According to a Google-Ipsos survey, 88% of Nigerians surveyed said they had used generative AI in the past year, while 62% said they used it for everyday tasks such as planning trips, meals or workouts.
The launch also follows Paystack’s recent restructuring under The Stack Group (TSG), which created dedicated business units for merchant payments, consumer transactions, banking services and emerging technologies.
Paystack plans to expand Paystack Index to more merchants, services and African markets, including Ghana, Kenya and South Africa, as it evaluates user behaviour and AI-powered checkout experiences.
FCMB Turns Normal Banking into Rewards with New Mobile App Upgrade
Despite Warnings, FG Draws Down $1.5Bn as First Tranche of FAB $5Bn Loan Deal
PalmPay Strengthens Data Protection Culture with Employee Privacy Workshop and Privacy Champions Programme
Paystack Unveils AI-powered Payments Tools
NRS, CITN Deepen Partnership to Strengthen Tax Awareness
CBN Extends PoS Geo-Fencing Enforcement Deadline to August 2026
London Strengthens Global Investment Ties with Africa @ First Ever London-Africa Business Summit
FG Targets Alleged N3tn Capital Flight, Opens Airtime Credit Market to Nigerian Fintechs
Mobile Internet Gender Gap Widest in Africa – GSMA
Japan, UNESCO Boost Digital Learning in 15 CoEs with Donation of ICT Equipment
Telecom3 days ago6 Easy Ways to Enjoy the 2026 World Cup with Google and Gemini
News3 days agoMTN ASAP Enugu Stakeholders’ Conference Rallies More Action Against Youth Drug Abuse, Unveils N33Bn ASAP Impact
General News2 days agoTinubu appoints Adigwe to head National Health Technology, Data Analytics Office
E-Financial3 days agoEFCC, CAC Raise Concerns over Unregistered PoS Operators
E-Financial2 days agoNRS, CITN Deepen Partnership to Strengthen Tax Awareness
E-Financial2 days agoPaystack Unveils AI-powered Payments Tools
E-Financial2 days agoFidelity Bank Wins DBN Award for Expanding First-Time Credit Access to MSMEs
General News2 days agoPalmPay Strengthens Data Protection Culture with Employee Privacy Workshop and Privacy Champions Programme