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IFC, Citi Create $800 Million Facility to Boost Trade Finance in Emerging Markets

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IFC, a member of the World Bank Group, and Citi have established an $800 million facility to facilitate trade finance in emerging markets, supporting trade flows in developing countries and helping businesses cope with the devastation caused by the Coronavirus (COVID-19) pandemic.

The transaction, which is part of IFC’s emergency response to COVID-19, will help to support the flow of critical commodities in countries where businesses face financing challenges and the disruption of cash flows due to the global outbreak of the virus. IFC and Citi will share the risk in an $800 million portfolio of trade-related assets on a 50-50 basis.

“Across the globe, the COVID-19 pandemic is disrupting supply chains, decreasing demand, and causing overall market anxiety. Many businesses—especially SMEs—are being forced to close their doors,” said Paulo de Bolle, Global Director of IFC’s Financial Institutions Group. “By rapidly increasing our capacity to deliver trade finance, IFC and Citi can help businesses maintain their operations during the current crisis and speed their recovery when the pandemic eases.“

“Supporting the sustainability of the supply chains and stimulating the international trade flows have been a critical priority for us as we deal with the impact of the COVID-19 pandemic. Citi’s partnership with the IFC on this transaction will help enable the recovery of trade flows in the emerging markets while aiding in mitigating the extended disruption to the supply chains of many industries across the globe,” said Ebru Pakcan, Global Head of Trade, Citi Treasury and Trade Solutions.

The signing marks the extension of an existing facility under IFC’s Global Trade Liquidity Program, bringing the size of the facility to $2 billion. Since the facility was created in 2009, it has financed a total trade volume of $35 billion, with around $3.5 billion in IDA countries (International Development Association, the World Bank Group fund for the world’s poorest countries), and $13 billion in low-income and lower middle-income countries. This long-standing partnership has facilitated financing for 4,600 trade transactions through 185 banks in 48 emerging market countries.

Trade is considered a critical driver of economic growth and trade finance is essential to the movement of goods at all stages of the supply chain. Before the COVID-19 pandemic, the global trade finance gap was an estimated $1.5 trillion in 2018.

On March 17, IFC’s Board of Directors approved $8 billion in fast-track financing to help companies affected by the outbreak. The bulk of that financing, including $2 billion for the Global Trade Liquidity Program, will go to client banking institutions, enabling them to continue to offer trade financing, working-capital support and medium-term financing to private companies.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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