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Financial Services

CBN to increase loans to agricultural sector to 10% of total bank credit

The CBN continues with its support for the agricultural sector.

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CBN to increase loans to agricultural sector to 10% of total bank credit, Agritech, Efficient Power: Addressing a Critical Element in Nigeria’s Agro-Industrial Revolution

The Central Bank of Nigeria (CBN) has revealed that the country needs to increase its level of bank credit to the agricultural sector by over 50% within the next 4 years to boost food production.

The implementation of this is expected to drive the allocation to the sector to 10% of the entire credit in the banking sector from the current 4%.

READ: Fitch says Nigerian banks have a risk indicator of 12.14, explains why

This disclosure was made by the CBN Governor, Godwin Emefiele, on Tuesday, September 15, 2020, at the 13th Annual Banking and Finance Conference, organized by the Chartered Institute of Bankers (CIBN) in Abuja.

Emefiele said that the banking sector should focus on increasing its support for the agricultural sector, as the coronavirus pandemic has caused disruptions on global supply chains and food supply from other countries.

The CBN boss stated that some of the opportunities in the agricultural sector that banks should explore include addressing some of the existing gaps in the agriculture value chain like storage centres, transport logistics and technology platforms, that can enable rural farmers to sell their produce directly to the markets.

READ: Explained: CBN’s powers to seize bank account of criminals

Emefiele also disclosed to bankers that currently, loans to the food sector accounts for around 4% of the total credit in the banking sector. He said the pandemic had exposed the risk of relying on food and drug imports, as most countries are reluctant to export goods to other countries.

Nairametrics had reported on President Muhammadu Buhari’s directive to CBN not to allocate foreign exchange for food and fertilizer imports. He said the Federal Government would rather empower more local farmers and use agriculture as a means to create more employment among Nigerians.

READ: Consortium of Western investors to inject upwards of $5 billion in Nigeria’s renewable energy sector

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Nigeria is reliant on imports, including food items, to meet its needs due to limited manufacturing capacity. It has been struggling to reduce its $20 billion annual food import bill as it finds it difficult to diversify the economy away from oil.

Emefiele told bankers that currently, loans to the food sector accounts for around 4% of the total credit in the banking sector.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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    Financial Services

    AIICO refutes claims of non-remittance of pension assets to PTAD

    AIICO says all pension assets due for remittance have been duly transferred to PTAD since the year 2017, in full compliance with the directive.

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    AIICO Insurance Plc has refuted the allegations of non-remittance of pension assets to the Pension Transition Arrangement Directorate (PTAD).

    This was contained in a statement issued by its Head, Strategic Marketing & Communications Department, Segun Olalandu on Friday.

    It stated that all pension assets due for remittance have been duly transferred to PTAD since the year 2017, in full compliance with the directive.

    AIICO added that both parties are presently engaged in a reconciliation exercise to conclude the process and it implored the public to disregard any information that may suggest otherwise as there is no basis to that effect.

    It stated, “The attention of the Management of AIICO Insurance Plc. has been drawn to a recent report in the media on allegations of non-remittance of pension assets to the PTAD.

    “AIICO Insurance Plc. hereby wishes to inform the public that all pension assets due for remittance have been duly transferred to PTAD since the year 2017, in full compliance with the directive. Both parties are presently engaged in a reconciliation exercise to conclude the process. We implore the public to disregard any information that may suggest otherwise as there are no basis to that effect.

    “AIICO Insurance Plc. is and remains a responsible corporate citizen of Nigeria and ensures best practice in all its business activities and operations in line with extant laws and regulatory provisions guiding its practice.”

    What you should know

    The Senate Committee on Public Accounts had summoned NICON Insurance Plc, AIICO Insurance and other insurance companies over their reported failure to remit N17.4 billion Pension Fund to PTAD.

    The Senate based its summon on the 2016 report of the Auditor General of the Federation (AuGF), which unravelled the non-remittance of N17.4 billion Pension Fund to PTAD.

    The Auditor General’s report had said, “Returns on pension funds totalling N17.4 billion forwarded by the underwriters were not accompanied by the following documents: (i) (ii) (iii) (iv) Bank Certificate of balances as at the close of accounts.

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    Accounting Statement showing the following: (a) (b) (c) Actuarial Value of Assets: Valuation of Assets at the lowest cost. Actuarial surplus: Excess of assets over Liabilities Actuarial Liabilities /deficiency: Excess of Liabilities over Assets A minimum of 3 years Annual Financial statements. Major Policy files and associated investment ledgers, if any.”

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    Exclusives

    How fraudsters fleece elderly Nigerians of their bank deposits

    Fraudsters in connivance with some bankers are targeting mostly elderly customers to fleece them of their bank deposits.

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    Protecting your money from fraudsters, Financial crisis is imminent in Nigeria -Dr. Segun Aina, Yahoo Yahoo

    Mary Adegoke, 70, is a retired teacher and a depositor with one of the Nigerian Tier-1 banks. The mother of five got a rude shock on Friday, January 8, 2021, when she got a call from a stranger, who claimed to be her new account officer, requesting a One Time Password (OTP) that was sent to her phone a few minutes earlier.

    Adegoke told Nairametrics that she wouldn’t have shared the information if the caller had not answered a few security questions like her account number, digits on her ATM card, and Date of Birth. She said, “I had no reason to doubt him after providing the answers. I never understood what he was up to and what the OTP meant and why he asked me to delete it immediately after I shared it with him. A few minutes later, I got a debit alert of N40,000, which was my pension for the month.

    “At that point, I started sweating and knew I had fallen victim to fraudsters. But what I still don’t understand is how he got my account number and other personal details.”

    READ: How scammers use SIM cards to rob your bank accounts

    Mrs Abimbola Omole, 65, is another retiree and a victim of similar fraud. The retired civil servant is also a depositor with one of the Tier-1 banks, which has its headquarters in Marina, Lagos.

    Omole had declined the offer of an ATM card through her account officer before travelling out of the country. The account officer had then proceeded to forge the customer’s signature to request the ATM card.

    “I couldn’t believe my eyes when I got debit alerts that a sum of N150,000 was deducted from my account within three days,” a bewildered Omole reported. “When we traced the location of the withdrawal, we found it was in Onitsha. I am sure the banker must have disclosed my details to someone there because she had asked me to lend her money before I travelled,” she recalled.

    Adegoke and Omole are only two of several bank depositors, especially elderly citizens, who have been fleeced by fraudsters masquerading as bank staff. These crimes are unmistakably and increasingly targeting a specific class of people – vulnerable elderly people.

    READ: How thieves use Covid-19 to defraud bank accounts

    Ex-bankers share their experiences

    Sources across the top banks revealed that many bankers engage in various fraudulent activities as a result of laxity on the part of some officials in the internal control departments at various levels. Nairametrics found that many of these frauds were perpetrated by third parties in connivance with insiders, targeting mostly elderly customers within the 60-70 years age bracket, who may expectedly not be tech-savvy. This is usually done by requesting that the unsuspecting customers provide vital information such as their Personal Identification Number (PIN), which the fraudsters then use to debit their accounts.

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    “We treat scores of fraud cases every year and most of them are done in connivance with senior officials of the bank at the branch level. Recently, a fraudster got the PIN of a customer and withdrew N100,000 from the account on a particular Sunday,” a banker who pleaded anonymity told Nairametrics.

    A former Manager of one of the Tier-1 banks, in an exclusive interview with Nairametrics, disclosed that three of the staff of the bank in Sokoto were arrested by the Economic and Financial Crimes Commission (EFCC) in March 2020. The bankers were arrested for conspiring to steal the sum of N1.2 million from a customer’s account and were said to have done so by issuing an ATM card in the customer’s name to an impostor who then proceeded to clean out the account.

    READ: CBN releases new guidelines for OFIs, orders inclusion of NUBAN code or face sanctions

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    Although some of this money was later recovered by security agents, investigations reveal that the system is beset with several other unrepentant fraudsters still plying their craft at the expense of unsuspecting customers.

    A banker with a Tier-2 bank also shared another case with Nairametrics, which was uncovered by EFCC. According to her, the anti-graft agency uncovered a criminal syndicate of bankers who specialized in forging signatures of deceased bank customers and stealing from their accounts. They also execute fraudulent financial transactions, including unauthorized debits of depositors’ funds.

    The alleged members of this syndicate were in March, arraigned before a Judge of the State High Court in Uyo on a 23-count charge bordering on conspiracy, forgery, obtaining by false pretense and criminal conversion, depositors’ funds to the tune of over N37.6 million.

    One of the accused persons was found by the EFCC to have used his position as the Head, Operations and Transaction Service and Delivery, to collude with third parties and establish the syndicate which specialized in perpetrating fraudulent transactions and deductions.

    Further investigations also showed that without the authorization or knowledge of the management of the bank, the defendants managed a fictitious fixed deposit account with interest accruing to it.

    READ: Personal data of 533 million Facebook users leaked on a hacking forum

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    What they are saying

    Head of Media, EFCC, Mr Wilson Uwujaren, disclosed that the anti-graft agency had prosecuted scores of bankers who had either swindled depositors or the banks in different cases.

    He added that there were yet more cases pending in Federal High Courts in Port Harcourt, Rivers, Yenagoa, Bayelsa, Edo, and Lagos States, among others.

    “What happens is that when a staff of the bank is involved in such activities, the bank takes the person out of the system through dismissal. But now, we are going after the banks and the personnel used to perpetrate fraud,” he said.

    Banks must fine-tune their internal control processes to better protect their customers as their failure to do this would be costly.

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    Increasing use of mobile

    Mobile adoption in Nigeria has risen over the last half a decade as the Central Bank’s policies on financial inclusions have increased reliance on mobile phones as a tool for conducting banking activities.

    According to the latest data from the NIBSS, Mobile transactions in Nigeria (mobile & USSD) surged by 82.6% in 2020 to stand at 1.69 billion compared to 928.86 million recorded in the previous year.

    Banks also earned a whopping N216 billion from digital banking transaction, buttressing just how critical mobile is to shoring up bank revenues.

    Despite this heavy reliance on mobile as a strategic tool for financial inclusion, fraudsters are also benefiting just like the banks.

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