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Financial Services
CBN’s Emefiele explains why banks restructured N7.8 trillion loans to customers
CBN had granted a temporary suspension on loan interests and repayment on principal debts.

Published
6 months agoon

While answering questions at the end of yesterday’s Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria, Governor Godwin Emefiele explained why Nigerian banks were encouraged to restructure as much as 41% of their loans to customers.
“If the CBN did not ask the banks to grant these forbearances to their customers, the loans will go bad immediately by our prudential ratios,” Emefiele stated.
Just a few months ago, the apex bank had granted a temporary suspension on loan interests and repayment on principal debts, in a calculated effort to mitigate the negative impacts of the pandemic. Nairametrics understands that N7.8 trillion worth of loans, out of a total of N19.9 trillion, have so far been restructured for 35,640 customers of 22 banks.
READ MORE: Nigeria’s foreign reserves fall to 6-weeks low, lose $81.10 million
As Emefiele explained, these moves became absolutely necessary amid the COVID-19 pandemic. According to him, it would be preferable to restructure up to 65% of loans instead of allowing such loans to go bad.
The Nigerian banking sector has long been battling to deal with the issue of non-performing loans. Interestingly, Nigeria’s non-performing loan ratio improved to 6.4% as of H1 2020, compared to 11.1% during the comparable period last year.
The backstory
An earlier report by Nairametrics, last month, quoted CBN’s Deputy Governor, Aisha Ahmad, to have disclosed how 17 banks submitted requests to restructure over 32,000 loans for individuals and businesses who were impacted by the pandemic. However, based on Emefiele’s explanation, yesterday, it is apparent that the number of banks that have made that same request is now more than 17, even as the volume of loan restructured is more than 32.94% as previously reported.
READ MORE CBN mulls ‘quantitative easing’ as it considers buying commercial papers at single digits
Explore research data on Nairalytics from Nairametrics
Do note that some top CBN officials, including Governor Godwin Emefiele, met in Abuja yesterday for the 274th meeting of the Monetary Policy Committee. Nairametrics earlier reported that majority of the members voted to retain the Monetary Policy Rate (MPR) constant at 12.5%. You may read up more on the resolutions that were reached during the meeting by clicking here.
Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.


Debt Securities
Interest rates will remain low until the end of H1 2021 – Meristem Securities
Meristem Securities has argued that interest rates will remain low until, at least, the end of H1 2021.

Published
2 days agoon
January 16, 2021
Meristem Securities has asserted that interest rates will remain low until, at least, the end of H1 2021.
This statement was made at the recently held webinar on Global Economy and Outlook, which the company themed: Bracing for a Different Future.
Although the company acknowledged that there is mounting pressure for upward movement in yields from several stakeholders, it appears the company concurs nothing concrete is in sight.
This line of reasoning seems to have influenced their decision to advise investors to move away from Treasury instruments.
What they are saying
Meristem advises that:
- “Buy and hold strategy investors seeking to generate above average returns should move away from risk free Treasury instruments and focus on investment grade commercial papers and bonds which satisfy investment objectives.”
- “Active traders with higher risk appetite are advised to focus on high-yield short duration instruments, which would be re-invested into a higher yield environment should rate reversals occur.”
The advice regarding shunning Treasury instruments appears to be in order, considering that treasury bill rate has been declining, with the latest figure — November 2020 — 0.03% as per the CBN monthly interest rate data.
Further checks from the Debt Management Office website, indicates that the latest figures for Eurobonds and Diaspora bond fall short of the fixed yield at issue for all the different categories of bonds in issue.
What you should know
Latest figures from the CBN’s monthly interest rate indicate that:
- Treasury bill rate has been on a steady decline for six months, down to 0.03% since the last rise (2.47%) in May 2020.
- Fixed deposit rates (one, three, six and twelve months) have also been declining – the latest figures for these indicate that in November 2020, one-month deposit rate was 1.92%, 2.9% for three months, 2.84% for six months, and 4.89% for 12 months.
- Compared with the corresponding period in 2019, the figures indicate that these rates fell by 75%, 66%, 71% and 49% respectively.
Financial Services
CBN issues framework for QR payments
CBN has issued a framework that would guide Quick response (QR) code payments in Nigeria.

Published
3 days agoon
January 15, 2021
The Central Bank of Nigeria has issued the framework that would guide Quick Response (QR) Code Payments in Nigeria.
This is a proactive move by the Apex bank towards ensuring the safety and stability of the Nigerian Financial System, as well as promoting the use and adoption of electronic payments and foster innovation in the payments system.
READ: Over 1 million people took loans from banks below 20% interest rate in 1 year- CBN
Quick Response (QR) Codes are matrix barcodes representing information presented as square grids, made up of black squares against a contrasting background that can be scanned by an imaging device, processed and transmitted by appropriate technology.
The codes are used to present, capture and transmit payments information across payments infrastructure and further enable the mobile channel to facilitate payments and present another avenue for promoting electronic payments for micro and small enterprises.
READ: Binance offers DeFi coders $100,000; DeFi market value hits $8 billion
What you should know
- Quick Response (QR) codes are two-dimensional bar codes. QR code payments allow merchants to receive payments from customers simply by scanning generated QR codes using a smartphone camera. The QR code payments carry the purchase transaction information to the mobile device of the buyer/customer.
- Making payments via QR codes is very secure. It is because the QR code is nothing but just a tool that is used to exchange information. Any data which is transferred via QR codes is encrypted, thus making the payment secure.
- The Participants in QR Code Payment in Nigeria include Merchants, Customers, Issuers (Banks, MMOs and Other Financial Institutions), Acquirers (Banks, MMOs and Other Financial Institutions) and Payments Service Providers.
- QR payments are increasingly becoming a popular means of payments in Nigeria, and some industry players would see the framework as a perfect way of regulating the sector.
- QR codes are capable of storing lots of data. But no matter how much they contain, when scanned, the QR code should allow the user to access information instantly. It can be used for payments, sharing contacts and Wi-Fi passwords and lots more.
- The popular and common argument is that since POS machines are expensive, cheaper options such as QR scanners should be pushed forward to local traders.
READ: Telecoms, FSI to hugely boost Nigerian Economy in 2021 – CWG’s Business Director
Financial Services
CBN unveils framework for regulatory sandbox operations
CBN has issued a regulatory Sandbox framework towards engaging with the operators in the Fintech space.

Published
3 days agoon
January 15, 2021
The Central Bank of Nigeria has taken proactive steps towards ensuring more flexible ways of engaging with operators in the payment solutions/fintech space, in a bid to tacitly regulate how operators churn out their new products and services.
To this end, CBN has introduced Regulatory Sandbox which is a formal process for firms to carry out live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with regulatory oversight, subject to appropriate conditions and safeguards.
It is expected that the CBN would stay abreast of innovations while promoting a safe, reliable and efficient Payments System to foster innovation, without compromising the delivery of its mandate.
What you should know
- A regulatory sandbox is a framework set up by a regulator that allows FinTech start-ups and other innovators to conduct live experiments in a controlled environment under a regulator’s supervision. It encourages innovation that can improve the design and delivery of payment services.
- No doubt, regulations around Fintech are still emerging and developing, there is still a high entry barrier for new entrants and it is expected that Sandboxes would present them with a safe testing environment and ease regulatory onboarding.
- Sandbox is quite suited for new products, services or solutions that are either not contemplated under the prevailing laws and regulations, or do not precisely align with existing regulations.
- Sandbox is intended to promote effective competition, embrace new technology, encourage financial inclusion and improve customer experience, with a view to engendering public confidence in the financial system.
- The framework provides guidance on the establishment, the applicable rules and operations of a Regulatory Sandbox for the Nigerian Payments System, as well as providing standards for the operations of a Regulatory Sandbox, prescribes the processes and procedures for analysing, collecting, updating, integrating, and storing consumer data and information.
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