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Details of CBN’s new intervention schemes for non-interest financial institutions

The overall objective of these interventions is to promote financial inclusion in the country.

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CBN Vs NESG: Waving the white flag for the benefit of Nigerians, Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited

The Central Bank of Nigeria (CBN) has recently launched a total of eleven intervention schemes aimed at increasing access to finance by non-interest financial institutions.

A circular that was signed by the apex bank’s Director in charge of the Financial Policy and Regulation Department, Kevin Amugo, said the overall objective of these interventions is to promote financial inclusion in the country.

READ MORE: Over N190bn disbursed through Anchor Borrowers Programme – CBN

Here are the intervention schemes

  • Non-Interest Guidelines for Accelerated Agriculture Development Scheme (AADS)
  • Non-Interest Guidelines for Intervention in Textile Sector
  • Guidelines for the operation of the Agri-business, Small and Medium Enterprise Investment Scheme (AGSMEIS) for Non-Interest Financial Institutions
  • Non-interest Guidelines for Non-oil Export Stimulation Facility
  • Non-interest Guidelines for Anchor Borrowers’ Programme
  • Non-interest Guidelines for Real Sector Support Facility Revised Guidelines.
  • Non-interest Guidelines for the operation of the Credit Support for the Healthcare Sector
  • Modalities for the implementation of the Creative Industry Financing Initiative (Non-interest version)
  • Non-interest Guidelines for the implementation of the N50 billion Targeted Credit Facility

READ: CBN disburses N50 billion loans through MFBs’ IT platform

Further details

Note that each of these intervention schemes has various purposes and objectives. The first scheme, for example, is aimed at reducing unemployment in Nigeria by funding agriculture production initiatives that will engage as much as 370,000 youths over the next three years.

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Similarly, the Non-Interest Guidelines for Intervention in Textile Sector is intended to resuscitate Nigeria’s textiles industry by providing “a N50 billion special mechanism for restructuring of existing facilities and provision of further facilities for textile companies with genuine need for intervention.”

Some of the eligibility creteria for accessing these non-interest schemes

  • Beneficiaries must be Nigerian youths within the ages of 18 to 35 years
  • Sign an undertaking to abide by the terms of agreement of the Scheme
  • Any textile company with an existing facility in the books of BOI under the CTG scheme is eligible to apply
  • Textile companies with existing facilities in DMBs/NIFIs can apply
  • Textile companies that are not participating under the SME/RRF can also apply

Download the circular right here for further details.

READ ALSO: Covid-19: Timeline of every pronouncement made by Nigeria to support the economy

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The backstory

Recall that back in June this year, Nairametrics reported that the apex bank had unveiled a framework that will integrate a non-interest window in all its intervention programmes aimed at supporting businesses and households that have been impacted negatively by the COVID-19 pandemic.

A statement by the CBN had specifically noted that the integration will focus mainly on its Anchor Borrowers’ Programme (ABP) as well as the Targeted Credit Facility (TCF).

A previous article had also explained that “a non-interest window operation is defined as part of a conventional financial institution (which may be a branch or a dedicated unit) that provides fund management (investment accounts), financing, investment and other banking services that are Shariah-compliant,” according to the CBN’s guidelines on Non-Interest Window which may be found 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.

4 Comments

4 Comments

  1. Abdullahi mains ribah

    July 24, 2020 at 11:06 am

    I wish I could access the loan to enable me open a business on wielding and fabrication I had a competence certificate at d NOUN Kaduna state 2017

  2. Jude Chizoba Jonathan

    July 24, 2020 at 11:51 am

    Good morning sir, please sir how can I access this CBN loan? Thanks

  3. Felix

    July 24, 2020 at 1:05 pm

    Good morning sir, please how can one apply for this loan

  4. Ahmad

    August 22, 2020 at 9:03 am

    Good morning. Please I want to apply for the loan. I am graduate of computer engineering with professional certificates in Graphic design and networking. I was hoping I could access the loan on ‘creative industry (ICT)’ to open a digital billboard advertisement company. Please I want to know if they could allow such business under the scheme for ICT.
    Thank you.

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Exclusives

CRR: Banks suffer N917.5 billion debits in latest CBN action

The central bank debited Nigerian banks N917.5 billion last week in its latest CRR action.

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CRR: Banks suffer N917.5 billion debits in latest CBN action

Nigerian banks suffered a total of N917.5 billion in new CRR debits from the Central Bank of Nigeria. Reliable sources inform Nairalytics Research that the latest debits occurred in the week ended October 23rd, 2020.

The cash reserve requirement is the minimum amount banks are expected to leave retained with the Central Bank of Nigeria from customer deposits. In January, the CRR was increased by 5% to 27.5% by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.

READ: CBN says 17 banks to restructure over 32,000 loans

CRR Debits for Nigerian Banks.
Nairalytics Data

READ: Union Bank suffers N188 billion in CRR debits as at June 2020

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From the data, Zenith Bank topped the list with N285 billion followed by UBA with N160 billion. The rest of the FUGAZ, Access, FBN, and GTB were debited N140 billion, N95 billion, and GTB N55 billion respectively. The FUGAZ also suffered a N1.9 trillion debit in CRR sequesters in the second quarter of 2020 (April – June) alone.

READ: Nigeria’s forex devaluation timeline – 2020

Nigeria’s central bank has since 2019 debited Nigerian banks a chunk of their deposits as part of a mutually inclusive cash reserve requirement (CRR) and Loan to Deposit Ratio policy that is targeted at coercing banks to lend more to the private sector.

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READ: CBN reviews minimum interest rates on savings deposit to 1.25%

Last month, Nairametrics reported that the CBN now holds a total of N6.57 trillion in CRR debits from the nation’s top 5 banks a whopping 43% higher than the N4.58 trillion held in March and more than double the N3.5 trillion CRR debits as of December 2020. CRR debits in the third quarter of 2020 will be revealed when banks release their results in the coming days and weeks.

READ: Nigeria’s telecom sector posts double digit growth of 18.1%, manufacturing, others contract

Meffynomincs: CBN under the leadership of Godwin Emefiele has deployed several heterodox policies as it strives to stimulate the economy and manage the exchange rate crisis in the absence of strong fiscal support.

  • Interest rates on fixed deposits and money market instruments have fallen to single digits despite the galloping inflation rate.
  • Last month, the CBN monetary policy committee admitted it was no longer combating inflation but will direct its policies towards stimulating lending to the private sector hoping this will spur local production.
  • This policy has placed banks in the crosshairs with the Apex bank exposing them to CRR debits if they cannot use customer deposits to spur lending.

 

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ENDSARS

#EndSARS: Access Bank announces N50 billion interest-free facility for businesses

Access Bank Nigeria Plc has announced plans to offer N50billion interest-free credit facility to individuals and businesses. 

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Access Bank Plc, Nigeria's Creative Industry needs urgent financing from commercial banks to bridge unemployment gaps - Herbert Wigwe

Access Bank Nigeria Plc. has announced N50 billion in support of Nigerians through interest-free loans and grants to support communities, the youths, and micro, small and medium-sized businesses.

READ: Access Bank gets regulatory approval to become a Holding Company

READ: Banks lay-off 2,477 staff during lock-down

This information was disclosed by the bank through its official LinkedIn page. 

The bank’s official statement read thus,

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“Now more than ever, we remain committed to our purpose of impacting lives positively. In light of the recent occurrences, we will be supporting Nigerian businesses with 50 Billion Naira interest-free loans and grants. Watch this space for more information.”

READ: Access, GTBank, two others pay PWC & EY N1.5 billion as Audit fees in H1 2020 

Why it matters

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The impact of the pandemic, coupled with the hijacked #EndSARS protests that led to the looting of businesses and destruction of properties has thrown so many Nigerians into debts.

READ: $70 billion per annum will be needed to tackle pandemic induced poverty – World Bank

READ: WTO DG: US, EU divided over Nigeria’s Okonjo-Iweala and South Korea’s Yoo

This show of support from Access Bank will help alleviate and stimulate economic activities, as well as produce many positive multiplier effects on the economy.

READ: #EndSARS: Popular hacking group, Anonymous allegedly hacks Nigerian Govt. websites

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Financial Services

CBN reviews appointment requirements for CCOs in Banks

The CBN has reviewed the appointment criteria for CCOs in Merchant Banks and Regional Banks.

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Access Bank Plc, Herbert Wigwe, CBN, interest payment on bank deposits, CBN review appointment requirements for Chief Compliance Officers in Banks

The Central Bank of Nigeria (CBN) has reviewed the appointment criteria for Chief Compliance Officers in Merchant Banks and Regional Banks (Commercial and specialized).

This is according to a circular issued by the apex bank dated October 9, 2020, and signed by its Director of Financial Policy and Regulation Department, Kevin Amugo.

READ: CBN has rolled out new anti money laundering penalties that should get any banker worried

According to the latest notice, Merchant banks and Regional banks are hereby granted dispensation to appoint CCOs on a grade not below an Assistant General Managers. However, the CCOs will report directly to the ECO of the financial institutions who have sole responsibility for compliance matters in the bank.

READ: CBN to “reduce” savings rate to 1% declare OMO bills as “Poison”

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Backstory

This latest action by the CBN is the sequel to consultations and engagement with stakeholders emanating from its earlier circular referenced FPR/DIR/GEN/CIR/06/004 of September 28, 2016, in which the tentative requirements for Executive Compliance Officers and Chief Compliance Officers of deposit money banks were mooted.

(READ MORE:CBN moves to ring-fence Disco collections)

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Meanwhile, the requirements and responsibilities of Executive Compliance Officers remain as earlier communicated in the circular dated 28 September 2016.

A part of the recent circular signed by Mr. Kevin read thus,

READ: CBN grants approval for banks to debit accounts of loan defaulters 

“Further to the circular referenced FPR/DIR/GEN/CIR/06/004 of 28 September 2016 on the appointment of Executive Compliance Officers (ECO) and Chief Compliance Officers (CCO) of deposit money banks, the CBN has, after due considerations and presentations by stakeholders on the size, structure, operation, and dynamics of classes of operators in the sectors reviewed the requirements for the appointment of Chief Compliance Officers.”

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