E-Financial
CBN, States Sign MoU on MSMEs Fund
Central Bank of Nigeria (CBN) yesterday signed a memorandum of understanding (MoU) with the Executive Governors of Delta, Osun, Oyo, Akwa-Ibom and Bornu States among others on the operation and administration of the N220 billion Micro Small and Medium Enterprises Development (MSMEs) Fund which was launched last year.
It also emerged that the actual disbursement of the fund is expected to be performed by President Goodluck Jonathan during the forthcoming annual MSMEs conference schedule to hold in August.
Godwin Emefiele, governor of the apex bank, disclosed this in Abuja during the signing of a Memorandum of Understanding between the bank and governors from 11 states.
The MoU, signed at the apex bank’s headquarters had in attendance governors from Delta, Akwa Ibom, Osun, Oyo, Bayelsa, Gombe, Zamfara, Enugu, Ondo and Benue states.
The CBN governor said the flag off of the disbursement would be done by President Goodluck Jonathan, noting that the fund would be given to Nigerians at a single digit interest rate of nine per cent.
Emefiele said that based on the guidelines of the fund, each state of the federation would be able to access the sum of N2bn which would be administered through Micro Finance Banks.
The governor, who put the funding gap of the sector at about N9.6tn as at 2010 said, “As a country, we don’t have a choice than to support the youth by taking actions to engage their energy positively by creating jobs for them.
“We would work with you to ensure that it gets to the beneficiaries directly at a maximum rate of nine per cent, 60 per cent of this money will go to women
“The disbursement of the loan will kickoff in August and we want the President to personally kickstart the process in August.”
He said the CBN fund would focus on resolving challenges such as access to collateral and enterprise development support.
The governor said since the country has a large proportion of youths, there is an urgent need to engage their energy positively in productive sectors that would create jobs and reduce poverty.
This, he added, underscored the need for the apex bank, in pursuit of its developmental mandate to release the fund at a single digit interest rate for the development MSMEs.
Emefiele said as part of measures aimed at ensuring inclusive growth for the economy, 60 per cent representing N132bn out of the fund had been set aside for women.
He said, “We are starting with N220bn and I can assure you that once this amount is fully applied we would seize opportunity to increase it.
“But the important thing is that we are saying that the fund is going to be applied towards supporting the financing needs of our people a the lowest level of the pyramid at dingle it rate.
“We believe that if properly applied, what you will find is that it would see to the transformation and economic development of Nigeria and that is what is uppermost in our minds so even if we have to do more after this, it would be worth it.”
He assured that all the bottlenecks that may affect the implementation of the program would be addressed by the apex bank.
Godswill Akpabio, governor of Akwa Ibom State, commended the governor for the initiative, noting that a lot of lives would be transformed with the intervention fund.
He, however, said since the sector has the potential to create jobs, there is need for the bank to increase the accessible amount by each state from the current N2bn to between N3.5bn and N4bn.
He also requested that all bottlenecks that would hinder the successful disbursement of the fund be removed so that those who should benefit for the fund should not be excluded.
He said, “There is need to increase the amount because Nigerians are in a hurry owing to see a reduction in poverty and unemployment rate.
“We can start with N3.5bn or N4bn for each state so that we can make great impact with the sector in creating jobs
“We should also remove some of the impediments that will affect the disbursement of this fund.
The state can even guarantee this money so that it can quickly get to the beneficiaries. The experience in the past is that many intervention funds are not easily accessed owing to bureaucratic bottlenecks and this need to be addressed.”
E-Financial
Fidelity Bank Reports N124.3Bn Pre-Tax Profit for 2023
Fidelity Bank Plc has recorded a profit before tax of N124.3 billion for the year ended December 31, 2023, indicating a 131.5 per cent increase from N53.7 billion posted in the 2022 financial year.
The bank disclosed this in its 2023 full year audited financial statement issued to the Nigerian Exchange Ltd. (NGX) on Tuesday in Lagos.
Fidelity Bank said it would also pay investors a final dividend of 60k per share and a total dividend of 85 kobo per share for the reporting period.
This represents a 70 per cent increase compared to the 50 kobo per share paid to its shareholders in the previous year.
The financial institution stated that this led to an increase in return on average equity of 26.5 per cent in the year under review from 15.6 per cent in the corresponding year.
According to the financial statement, the bank’s gross earnings increased by 64.9 per cent year over year to N555.83 billion.
The bank stated that this was driven by 81.6 per cent growth in net interest income which increased from N152.7 billion in year 2022 to N277.37 billion in the 2023 financial year.
This led to a profit after tax of N99.45 billion, representing a 112.9 per cent annual growth.
Commenting on the performance, Nneka Onyeali-Ikpe, managing director of Fidelity Bank, said the financial institution closed the financial year with strong double-digit growth across key income and balance-sheet lines.
Ms Onyeali-Ikpe stated that the bank’s performance in 2023 was an attestation of its capacity to deliver superior returns to shareholders despite the difficulties in our operating environment.
She said, “A review of the financial performance showed that the bank grew its net interest income by 81.6 per cent to N277.4 billion. This was driven by a 55.5 per cent increase in interest income, thus reflecting a steady rise in asset yield throughout the year.
“The average funding cost dropped by 20bps to 4.4 per cent due to increased low-cost funds that grew from 83.6 per ent in 2022 to 97.4 per cent in 2023.
“The combination of higher asset yield and lower funding cost led to an increase in net interest margin of 8.1 per cent from 6.3 per cent in 2022 financial year.”
According to her, the total customer deposits crossed the N4 trillion mark, as deposits grew by 55.6 per cent from N2.6 trillion in 2022.
She noted that the increase was driven by 81.1 per cent growth in low-cost funds.
Mrs Onyeali-Ikpe explained that despite the challenging operating environment, the bank reaffirmed its devotion to helping individuals grow and inspiring businesses to thrive.
She said the bank also committed to empowering economies to prosper by increasing net loans and advances to N3.1 trillion from N2.1 trillion in the 2022 financial year.
The managing director stated that despite the growth in its loan portfolio, regulatory ratios were maintained well above the required thresholds.
Mrs Onyeali-Ikpe noted that the bank liquidity ratio stood at 45.3 per cent in the year ended 2023, from 39.6 per cent in the year 2022, while the capital adequacy ratio rose to 16.2 per cent, compared to the minimum requirement of 15.0 per cent.
“We recognise the changing dynamics in the Nigerian banking space and the need to monitor and proactively manage evolving risks. The proposed final dividend of 60 kobo per share reflects our commitment to strong value creation and returns to our shareholders.
“Fidelity Bank has consistently paid dividends since 2006,” she said.
E-Financial
ClaimBuddy Bags $5m to Streamline Insurance Claims for Hospitals, Patients
ClaimBuddy, insurancetech startup has raised $5 million in its Series A funding round led by Bharat Innovation Fund (BIF), with participation from Japanese VC firm CAC Capital, Chiratae Ventures, and Rebright Partners.
The Delhi NCR-based startup plans to utilize the capital to enhance its tech infrastructure, onboard skilled talent, and diversify its product offerings.
Founded in 2020 by Khet Singh Rajpurohit and Ajit Patel, ClaimBuddy aims to streamline the insurance claims process for both patients and partner hospitals through its digital platform.
ClaimBuddy has already assisted over 35,000 patients and collaborated with more than 250 hospitals nationwide, establishing itself as a comprehensive solution for medical insurance claims.
CEO Rajpurohit expressed confidence in leveraging the investment to introduce innovative financial tools and further improve healthcare experiences. ClaimBuddy’s focus aligns with addressing fundamental issues in insurance claim settlements and patient experiences, as highlighted by BIF’s Ashwin Raguraman.
ClaimBuddy faces competition from other insurtech startups but aims to disrupt the Indian insurtech sector, which is witnessing a surge in digital-first solutions and increased investor interest.
The Indian insurtech space is projected to be a significant segment within the larger fintech opportunity by 2030.
E-Financial
Recapitalisation: UBA Seeks Shareholders’ Nod to Raise Capital
United Bank for Africa (UBA) has said that it will seek shareholders’ approval at the company’s 62nd annual general meeting (AGM) to raise capital.
The AGM is scheduled to be held on May 24.
UBA disclosed this in a statement filed on the Nigerian Exchange Limited (NGX) on Monday.
The development is coming after the Central Bank of Nigeria (CBN), on March 28, directed commercial banks with international licences to raise their capital base to N500 billion, while national and regional financial institutions’ capital bases were pegged at N200 billion and N50 billion, respectively.
UBA said the board will propose the capital be raised in the Nigerian or international capital markets by way of public offerings, private placements, rights issue or other transaction modes.
The bank said the decision to raise the capital is subject to regulatory approval after consent from shareholders.
According to UBA, the instruments “can either be as a standalone issue(s) or by the establishment of capital raising programmes, whether by way of public offerings, private placements, rights issues and/or other transaction modes, at prices, coupon or interest rates determined through book building or any other acceptable valuation method or combination of methods, in such tranches, series or proportions, within such maturity periods and at such dates and upon such terms and conditions as may be determined by the board of directors of the company subject to obtaining the requisite approvals of the relevant regulatory authorities”.
The company said the board would also propose increasing its issued share capital, from N17,099,710,683 to N22,500,000,000.
UBA, with a capital base of N115.82 billion, needs to raise N384.19 billion to meet the minimum capital requirement for international licence holders.
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