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A Review of The Naira Credit Card

Posted by banker.ng on May 17, 2012

It is simply a card product offered by Nigerian banks that is denominated in the naira. It is a type of card that allows you have access to credit or loan from a bank over a certain period of time.

Nowadays, more and more Nigerian banks now offer these credit cards and they come in different grades or categories. As long as you have a verifiable source of revenue, you can easily have access to such bank loans by means of the naira credit card. For most people who would rather prefer not to take other categories of loans, the naira credit card is becoming the easy route to follow.

The Naira credit card gives the user access to cash whenever he wants it and even if he doesn’t have his own funds, he can always access from the bank’s pool of funds to solve pressing financial issues. You can avoid being cash strapped. Even when you are outside Nigeria and need some quick funds, as long as you have a naira credit card, you can always withdraw from ATMs, use POS, pay online and settle other bills using you card.

Features of the Naira credit card
- It is denominated in Naira
- It is a kind of loan
- A physical card mostly branded by Visa or Mastercard

Some fees attached to Naira credit cards
- ATM and POS fees
- Monthly fees
- Interest rate on unpaid funds

Requirements for getting a Naira credit card
- A verified salary account
- Other verified source of regular income

The Naira credit card is the new way to get access to bank funds and you can easily get it from most Nigerian banks. Before getting a Naira credit card from your bank, try to take a look at their terms of service. You can get a copy from the customer service. This will help you look into fees attached to the card and they do vary from bank to bank.

Credit cards are one of the leading causes of debt in the whole world. People who use credit cards know how difficult it is to stay on track of their purchases. Eventually, they will learn that they have exceeded their limit and would need to pay up or risk being in debt. Thus, many people are looking for a fee free credit card that would give them flexibility in their payments. It is not easy to find a fee free credit card especially because companies rely on the amount to get their revenue. Those who own a fee free credit card also know that there are certain responsibilities that they should handle when using this item.

There are many kinds of fees being asked in credit cards. A fee free credit card may not have one or many of these items in their agreement. The most common item being paid for is late fees. This may be the only one available in a fee free credit card but there are rare cases when even this one is waived as long as the person already has good credit standing with the company. A fee free credit card may not pay for going over the limit. Therefore, the credit for the card has actually no limits but there are also certain considerations here. To get a fee free credit card without this factor, the person should always check his or her standing with the bank.

Those who use their credit cards in another country may be asked for foreign conversion fee. Although this is very rare, some companies still add this to the bill. A fee free credit card usually does not handle this item anymore. There is also a fee for people who pay via the telephone. Those with a fee free credit card do not need to worry about this one as well. Thus, by getting a fee free credit card, users will have fewer chances to be in debt. They may need to pay a higher amount for some items but they will be rewarded by having fewer credit card fees to pay for.

Enhancing the Nigerian Mobile Payments System

Posted by banker.ng on May 17, 2012

Indeed, Africa boasts of the world’s most successful mobile payment system. Though mobile money was first introduced in the Philippines in 2001, Kenya’s M-Pesa continues to be the most successful mobile money deployment globally with over 700 million domestic and international money transfer transactions, accounting for $130 million revenues in 2010 financial year. A joint venture between Vodafone and Safaricom, M-Pesa transformed Kenya’s entire economic system. Its pervasiveness and wide acceptance has made Safaricom the biggest mobile money operator in East Africa. Today, the service provides mobile banking facilities to more than 70percent of the country’s adult population (14 million people) that use their mobile phones to pay taxi fares, wages of field workers, utility bills, get money out of ATMs without owning an ATM card or a traditional bank account. Standard Bank Group, to which Stanbic IBTC belongs, currently operates mobile money services in various markets in Africa, including Ghana, Uganda, Kenya and South Africa. Nigeria, with an estimated population of over 150 million people, over 20 million bank accounts and almost 90 million mobile phone subscribers is on the threshold of deploying mobile money with the potential to become Africa’s biggest mobile money market, in spite of late adoption of mobile business.

Financial inclusion and cashless settlements in all transactions will definitely play a significant role in shaping Nigeria’s economy in the near future. In deed, Stanbic IBTC Bank recently came out with an alternative banking service platform known as “e.susu.” The platform, which enables the unbanked and underbanked make financial transactions, represents a good example of how low-cost approaches that use modern technology can effectively expand the financial services landscape.

The following realities should be taken into consideration when thinking about the future of the mobile money market as it relates to Nigeria:

• This is a huge country with many people. Very few (if any) deployments can claim to reach such a vast country with so many potential subscribers. (Many of the deployments in India are still regionally focused and have not yet been made available through a country-wide agent network).
• The Nigerian people are very industrious and entrepreneurial. Viable business propositions are usually embraced and developed to grow spectacularly. Propositions that do not work (on the other hand) are quickly discarded.
• Doing business in Nigeria is expensive. Infrastructure, transportation, electricity and many more basic ingredients to run a business are often in short supply and very expensive.
• The use of physical cash is ingrained into the fibre of society. Niara notes are not just used as tender, but play a role in a number of ceremonies (for instance weddings). Getting rid of or reducing the dependency on cash will be difficult. The value proposition of mobile money will have to be huge in order to reduce the dependency on cash.

Keeping the above in mind, the winners will have to be able to scale fast with a clear (or preferably more than one) value proposition. Winners will be companies that provide a proposition that hits the spot immediately, and they will have to be well capitalised. Success in Nigeria will be very beneficial, but will cost a lot of money.

The Development of Mobile Banking in Nigeria

Posted by banker.ng on May 17, 2012

Many have expressed doubts about Nigeria’s readiness for a cashless economy, mainly due to the unavailability of requisite infrastructure and low literacy levels, while others have also argued that ongoing reforms have generated ample momentum to leverage on all forms of e-payment, especially mobile payment to enhance financial inclusion and facilitate Nigeria’s transformation from cash-based to a cashless economy.

Mitchell Elegbe, Interswitch Group’s CEO and managing director, said there was no alternative to cashless policy if the economy is to achieve its desired aim of being among the top 20 economies by the year 2020.

Elegbe reiterated that the high unbanked situation poses a challenge to the policy, while calling for democratisation of the policy to enable majority of Nigerians use it, particularly mobile banking. The need for different types of cards either for debit or credit, according to him, is necessary for the success of the policy.

Head of Personal and Business Banking at Stanbic IBTC Bank, Obinnia Abajue, during a recent Mobile Money Roundtable, argued that the adoption of mobile money services in Nigeria would enhance economic planning by unraveling the country’s actual Gross Domestic Product (GDP) matrix, with a reduction in the cost of cash handling as well as cost of funds, besides being convenient and secure.

Abajue stated: “Government and banks have been at the forefront of efforts seeking to channel the huge funds in the informal sector through the formal banking system to bolster economic development.

Mobile money will fast track this harmonisation and identify economically active people previously in the shadows of the huge informal cash economy, enabling them to have access to credit facilities.”

“Mobile money,” he stressed, “will bring about transparency, improved remittances and economic activities across various sectors of the economy, both in urban and rural areas. To achieve this, it is imperative for the regulators, licensed operators and other stakeholders to embark on an awareness campaign to educate Nigerians about the benefits of mobile money. This will drive its acceptance, and subsequently unravel its enormous benefits to the economy.”

Across Africa, mobile banking is projected to become a $22 billion industry by 2015, according to Juniper Research, a consultancy outfit, buoyed by soaring cell-phone use and growing financial services demand. Correspondingly, mobile network operators will earn $7.8billion in direct and indirect revenues from serving a projected 364 million low income, unbanked people in about 147 countries who are projected to use financial services by 2012.

Valentine Obi, managing director of E-Transact International Limited, stated that Nigeria should take a cue from Europe if the country hopes to maximise benefits derivable from e-payment, while anchoring his position on the enormous opportunities embedded in the huge customer base which a cashless economy engenders.

“It reduces cost of operation; it increases customer satisfaction because you can render personalised service. When transactions are electronic, they are easier to track and document. For government, it helps in the area of taxation, budgeting, planning, accountability and improved government services. All payments are made easier with mobile payment system. For instance, you can pay your utility bills through your mobile phone. With PHCN top up system of electricity payment, it is going to be a lot easier in a couple of months when you can actually pick up your mobile phone and pay for electricity bills especially for those using top up meter,” he stated.

Other services to be powered through this platform include accounts information and updates, alerts, bill payments, person-to-person transactions and remittances. In addition, even people without formal identification documents are availed basic services just by providing a name and a phone number.

Enhancing Cashless Economy through Mobile Banking

Posted by banker.ng on May 17, 2012

The pilot scheme of the cashless policy currently being experimented in Lagos is facing some challenges. The e-payment policy is aimed at reducing cost of cash management by banks, and consequently, reducing lending rates. The direct implication is that it will lead to financial inclusion.

For Nigeria to achieve its vision of 20:2020, all hands must be on deck. A major derivative of this policy – mobile money services – appears to have taken off too with the launch of the service by a number of institutions. Their efforts are expected to make the policy a success.

BusinessDay investigations have revealed that overall, 73 percent of adult Nigerians have no formal or informal access to finance and therefore are excluded from access to credit facilities. In fact, according to the Central Bank of Nigeria (CBN) the unbanked money in the informal sector is estimated at a staggering N1.2 trillion.

Mobile banking is the person-to-person payment through the mobile phone or the use of mobile phones to conduct financial transactions. It is the latest electronic banking innovation and a revolution changing the lives of millions across the globe.

It also refers to the various components required to deliver mobile payment to the banking and non-banking community, with the overriding vision of achieving a nationally utilised and internationally recognised payment systems.

First Bank of Nigeria, UBA/Afripay, GTBank, MobileMoney, Stanbic IBTC, and Ecobank have the licenses to partner telecommunications companies to bring about the desired mobile banking. Others are Fortis MFB, Pagatech, Paycom, Chams, E-Tranzact, FET (Funds Electronic Transfer), Monitiz, Parkway, Corporeti Services, Eartholeum, and M-Kudi.

Their efforts are expected to expand and deepen formal banking in Nigeria by drawing the unbanked or under-banked into the formal financial services sector, while also enabling the economy to shift to more efficient and reliable modes of financial transactions.

For a country with an estimated population of over 150 million and, which curiously, has less than 22 million bank accounts, such policies are not only good but are necessary. BusinessDay investigations revealed that about 74 percent of the adult Nigerian population have never been banked, while 85 percent of adult females are completely unbanked. On the other hand, 61 percent of the unbanked would like to have a bank account, according to the Central Bank of Nigeria (CBN).

The development has impacted negatively on the country’s economic growth and development because access to financial services, and indeed overall financial development, is crucial to economic growth and poverty reduction. The lack of access to formal financial services limits market exchanges, increases risk and limits opportunities to save. Without formal financial services, households rely on informal services that are associated with high transaction costs. Thus, increasing access to formal financial services to the majority of households remains an important policy goal, not just in Nigeria, but in all emerging markets.

NCC, others allay fear over M-payment

Posted by banker.ng on May 17, 2012

The Nigerian Communications Commission (NCC) and telecommunications operators have said there is no cause for alarm over the mobile money scheme a.k.a cash-less banking.

Mobile telephone subscribers, who will form the bulk of patrons of the scheme, are worried that the poor quality of telecommunications services, may affect it. At the 66th NCC Telecoms Consumer Parliament in Lagos, NCC said it would explore every available means to protect consumers from abuses.

Executive Commissioner, Stakeholder Management, NCC, Mr Okechukwu Itanyi, said the critical success factor of the scheme rests with the initiator and receiver of the transaction, financial institution and telecoms operator.

Itanyi said as the scheme involves the use of mobile network platform, NCC would ensure seamless interconnection between the mobile money operators and the telecoms network providers, as well as ensure adequate enlightenment of subscribers.

He urged stakeholders in the scheme to safeguard the interest of the telecoms subscribers to ensure successful implementation and instil confidence in the scheme.

NCC’s Director of Policy, Competition and Economic Analysis, Mrs Lolia Emakpore, said the commission would ensure that mobile operators maintain the best quality of service that would enable consumers have hitch-free transactions.

“The consumers need not fear as the operators are working to ensure that there are no delays or hitches in any transaction initiated,” she said.

Speaking on how customer complaints would be handled in the face of duplicity of players in the scheme, Mrs Emakpore stressed that NCC would not be saddled with resolution of financial complaints.

According to her, this aspect would be handled by the mobile money operators and the financial sector regulator, the Central Bank of Nigeria (CBN).

“NCC would only address complaints arising from transaction failure associated with network failure,” she said.

She said the operators have agreed that ‘mobile money’ is a financial product and as such, have decided that complaints should be taken from the point of view of financial services providers, clarifying that the mobile payment vendors actually own the scheme, but are merely riding on the network of the mobile operators to execute transactions. Reacting to the pricing model for subscribers, she said CBN would ensure a fair pricing plan that would encourage Nigerians to use mobile money.

Channel Manager, Mobile Money at MTN, Mr Kieran Ombu, said MTN had created a dedicated customer care line, as well as upgraded its network infrastructure to ensure smooth financial transactions.

According to him, MTN has created a special mobile money help desk manned by 60 customer service personnel as part of its strategy of ensuring that complaints are dealt with decisively.

Director of Tele-banking at Globacom, Mr Tunde Kuponiyi, assured that the Globacom robust network infrastructure would ensure effective and efficient mobile money operations.

Paga Receives $2m Grant from EFInA

Posted by banker.ng on May 17, 2012

Paga, a financial services platform, has said it aimed at bringing financial services to over 40 million Nigerians by 2015, even as it received a $2 million grant from EFInA to develop and deliver low cost financial products through Paga’s nationwide agent network. Jay Alabraba, Paga co-founder and director of Sales & Business Development, disclosed to BusinessDay at the weekend.

Alabraba said EFInA chose to award the grant to Paga above a host of other applicants, as a result of the clarity of its planned initiative and track record in performance to date. EFInA, Alabraba explained, was an independent, professional and non-profit organisation funded by the Bill & Melinda Gates Foundation and the United Kingdom Department for International Development (DFID).

“The organisation was set up in late 2007 with a purpose to promote pro-poor financial sector development and financial inclusion in Nigeria,” he added.

The director of Sales & Business Development further explained that Paga, which enables Nigerians to transfer money to anyone via their mobile phones, Internet connected device, or at any agent in its nationwide network of agents, won the award following a highly competitive and rigorous application process that spanned several months, including thorough checks on both the status of the business and viability of its long term potential.

Explaining the new offerings and innovation Paga brings to the financial services sector, he said, “Our low cost financial offering, delivered via our agent network, is yet another example of innovation at Paga – a home-grown company.

Through its banking, insurance and microfinance partners, we will bring savings, loans and insurance to those that need it the most in a manner that is both simple to use and easy to understand.

Delivering more services at the agent point also improves the viability of the Paga agent network as it means additional revenue streams for our agents.” Justifying the choice of Paga for the grant, Modupe Ladipo, executive director and managing director for EFInA, said,

“We have chosen Paga for this grant because of the robustness of their plans and strength of their team. We are confident that by working together we can achieve our mutual goal of universal access to financial services for Nigerians.

“With over 59 million unbanked adults, finding new ways of reaching out to this market and bringing low cost financial services is a major challenge we aim to address.

By bringing low cost services to every neighbourhood we believe we can help bring a large number of Nigerians out of poverty and improve living standards.

Expanding Nigeria’s Financial Services Frontier

Posted by banker.ng on May 17, 2012

Many Nigerians, for numerous reasons, are unbanked and subsequently lack access to formal financial services. For the very important informal sector through which billions of naira circulates, this situation has impacted negatively on the country’s economic growth and development. A body of evidence shows that access to financial services, and indeed overall financial development, is crucial to economic growth and poverty reduction. Lack of access to formal financial services limits market exchanges, increases risk and limits opportunities to save. Without formal financial services, households rely on informal services that are associated with high transaction costs.

Thus, increasing access to formal financial services to the majority of households in developing countries remains an important policy goal of governments and Central Bank. It has also been recognised that even for those with bank accounts, physical distances to bank branches or points of financial service adds significantly to transactions costs.Nigeria’s banking culture according to the survey report indicated that an estimated 74 per cent of the adult population has never been banked, 85 per cent of adult females are unbanked, 61 per cent of the unbanked would like a bank account, only 3 per cent of the adult population use a microfinance bank and 73 per cent of adult Nigerians are financially excluded (no formal or informal access to finance).The CBN also reported recently that 65 per cent of Nigerians lack access to credit facilities. This disturbing data certainly raises the question of what can be done and urgently to correct this anomaly.

Which is precisely where creativity and innovation becomes vital, technological innovations and customised products or services are known to have been effectively deployed to transform all sorts of situations, and that includes the capability to extend financial services to millions of people at the bottom of the pyramid at relatively low cost.A case in point is Stanbic IBTC Bank’s alternative banking service platform known as e.susu, launched recently by the bank. The platform enables this group of people to make financial transactions or transfers across the country conveniently and at low cost. Stanbic IBTC’s e.susu, an alternative branchless banking platform, represents a good example of how low-cost approaches that use modern technology can effectively expand the financial services frontier.

Standard Bank to Start Sharia Services in Nigeria

Posted by banker.ng on May 17, 2012

Standard Bank plans to start sharia-compliant banking in Nigeria this year to benefit from the needs of Africa’s largest Muslim population. Stanbic IBTC Bank, a unit of Standard Bank, won a licence in principle last month and planned to offer Islamic services at its 160 branches in the fourth quarter, chief executive Sola David-Borha said.

Standard Chartered, the UK’s second-largest lender by market value, told the central bank it would like to provide the products, David Adepoju, the Lagos-based head of global markets at Standard Chartered Bank Nigeria .

The west African country, the continent’s biggest oil producer and home to about 78 million Muslims, is competing with Senegal, Egypt and South Africa in seeking to expand in the $1 trillion (R7.1 trillion) Islamic finance industry. Central bank governor Lamido Sanusi said in June that Nigeria wanted to be a “hub” for sharia-compliant finance in the region and planned to sell its first sukuk, or Islamic bond, within 18 months.

“It is difficult to see how a country with such a large Muslim population will continue for much longer without offering its people an alternative to conventional banking, particularly given the interest in Nigeria shown by some international banks,” Abolade Kehinde, a Lagos-based senior tax manager at PwC Nigeria, said earlier this year.

The country, where about 70 percent have no access to regular banking services, aims to diversify the economy by developing financial services. Africa’s third-largest economy would expand about 7.8 percent this year, driven by the non-oil sector, Sanusi said.

Gross domestic product grew 8.4 percent in 2010, according to the International Monetary Fund. Nigeria is trying to stabilise its banking industry after a debt crisis in 2009 almost led to its collapse. That year, the Central Bank of Nigeria fired the chief executives of eight lenders, pumped 620 billion naira (R28bn) into ailing banks and created a state-owned company to buy bad debt.

The Securities and Exchange Commission aimed to have a framework for Islamic financial products by the end of the year, Arunma Oteh, the regulator’s director-general, said on June 23 in London. The central bank had granted a licence to the country’s first Islamic bank, Jaiz International Bank, the deputy governor Kingsley Moghalu said in South Africa .

Stanbic IBTC had a licence to begin operating Islamic banking branches within six months and if it failed to do so within that time, the lender would need to reapply for approval, he said.

Nigeria’s 155 million people are divided almost evenly between Muslims and Christians, according to the CIA World Factbook.

The central bank has faced criticism from Christian groups that the introduction of Islamic banking may fan religious tension. Saidu Dogo, the secretary of the Christian Association of Nigeria in 19 northern states, said it was unconstitutional for the regulator to define all non-interest banking as Islamic.

“If there is any system in Nigeria that can discriminate against anybody, then it is null and void,” he said on Thursday from Kaduna. “Our children will be discriminated against.”

More than 14 000 people died in ethnic and religious clashes in the country between 1999 and 2009, according to the Brussels-based International Crisis Group.

“This is a financial product,” Moghalu said last month in Pretoria. “It’s got nothing to do with religion.”

Global sales of Islamic bonds, which pay investors returns based on assets to comply with a ban on interest, more than doubled this year to $16.8 billion from the year-earlier period, data show.

The debt returned 6.5 percent in 2011. Bonds in developing markets rose 5.8 percent, JPMorgan Chase’s EMBI global composite index shows. The Bloomberg Malaysian Sukuk Ex-MYR index, which measures foreign-currency Islamic debt sold by companies and governments in Malaysia, climbed 6.6 percent in the period.

Average yields on emerging market sukuk dropped by 8 basis points this month to 3.58 percent on Friday, according to the HSBC/Nasdaq Dubai US Dollar Sukuk index. The rate on the Dubai government’s 6.396 percent sukuk maturing in November 2014 has jumped 17 basis points so far this month to 4.71 percent yesterday.

The extra yield investors demand to hold Dubai’s bonds over Malaysia’s 3.928 percent sukuk maturing June 2015 widened 29 basis points to 236, according to Bloomberg data.

Senegal planned to sell $200 million in local currency sukuk this year, Finance Minister Abdoulaye Diop said in June. Egypt’s financial markets regulator in June agreed in principle on a law allowing companies to sell and trade sharia-compliant bonds. Absa Group, the South African bank controlled by Barclays, might offer Islamic services in Nigeria if it got a licence, Louis von Zeuner, the deputy chief executive.

Absa opened a representative office in Nigeria in November last year and is eyeing the market potential. “Africa is more a commercial and investment banking play but if a key market shows some movement we can’t ignore it,” Von Zeuner said. “We are mindful of the challenges.”

London-based Standard Chartered, which is interested in getting an Islamic banking licence, hoped to receive approval from the central bank within 12 months, Adepoju.

“I don’t think it’s an accident that it’s the international banks who are pioneers; they have launched those products outside in other markets,” said Lagos-based David-Borha at Stanbic IBTC Bank, which is aiming to add 20 branches in the nation by the end of the year.

Majority of Africans have no Access to Bank Services

Posted by banker.ng on May 17, 2012

The majority of Africa’s billion-plus population is locked out of the continent’s financial sector.  This is despite Africa having a booming financial services sector. Research by Standard Bank, which is among institutions painting a rosy picture of Africa’s economic potential, says growth in the financial sector – while laudable – has not been lock-in-step with the availability of financial services to the rural poor.

Banking services remain, to a large extent, a preserve of urban dwellers. More middle-income earners have swelled the ranks of Africans demanding more sophisticated banking, thereby supporting growth in the financial services sector. Coupled with increasing flows of private equity funds into the continent, Africa’s financial sector is well-positioned for growth.

However, there is little evidence that the growth is benefitting the majority of the continent’s dwellers. Standard Bank research analyst Simon Freemantle argues that banking the unbanked represents both a challenge and an opportunity for transformative financial institutions.The statistics on the population of Africans left out of the banking systems are startling.

In Zambia, for example, only a quarter of the country’s population has access to a bank or any other formal financial institution. Freemantle says about 15 percent of Zambia’s population accesses finance outside the formal banking channels and this means that two-thirds of the country’s population is virtually financially excluded.

In Namibia, about 48 percent of the population has access to formal banking channels and the figure is 46 percent for Botswana. The situation is worse in Mozambique and Tanzania, where less than a quarter of the population access formal banking channels of Nigeria’s 150 million people, 120 million have no access to formal banking channels.

Surprisingly, in regional economic powerhouse South Africa, which is said to have the continent’s most advanced economy, a quarter of the population is excluded.

One in five adults in Africa has an account at a formal or semi-formal financial institution and the ratio of liquid liabilities to GDP on average is around 32 percent compared to East Asia and the Pacific (49 percent) and developed markets (100 percent).

In the majority of African countries, banking penetration levels are as low as five percent.

Freemantle says in Nigeria, 15 percent of adults have access to a bank account and in Uganda, only a one-fifth of the population can access a bank account at a branch. Micro-finance institutions in countries like Kenya have helped improve access but commercial banking access is still low, analysts say.

Insurance penetration rates are also still low with the exception of South Africa, which reported the sixth highest rates in the world (12.89 percent). On average, Africa’s insurance penetration rate stands at just 3.3 percent.

‘Access to finance has been, and in the majority of African countries remains, one of the continent’s largest impediments to swifter socio-economic advance.

‘Africa requires not only capital, but also more effective and inclusive means of channeling this capital in ways that are most productive. Robust financial systems are undoubtedly a critical cog in ensuring more rapid, and far reaching growth,’ Freemantle said.

Notwithstanding the failure by banks to spread access, Standard Bank says Africa’s financial services sector will likely make up 20 percent of collective GDP by 2020 (currently 10 percent), with much of the growth coming from retail banking.

Banking in 16 African countries will boost financial assets by as much as US$1.4 trillion by 2020. South Africa dominates the financial services industry, accounting for 30 percent of all of banking assets on the continent. Of total assets (US$935 billion) of Africa’s top 200 banks, about 46 percent are held by South African institutions.

Standard Bank says that virtually all Sub-Saharan Africa’s top 100 banking assets are held in South Africa, Nigeria, Angola and Mauritius.

About 80 percent of the continent’s top 200 banks are in Nigeria, South Africa and North Africa. ‘A range of local and international financial institutions have either arisen in or converged on many of Africa’s fast growing emerging and frontier economies, eager to participate in the sector’s nascent, yet compelling growth,’ Freemantle said.

Africa’s banking growth will be anchored on a rising middle-income population though challenges of introducing rural populations to banking services will remain.

The growth of the financial services sector will also be aided by increasing flows of private equity funds into Africa.

Private equity investments as of 2007 were around US$3.5 billion. There are currently 31 large fund managers in Africa and seven private equity funds dedicated to infrastructure financing. South Africa dominates the private equity market, attracting 80 percent of all Sub-Saharan capital (Nigeria, 10 percent).

The United States and Europe are the major sources of private equity funds into South Africa.

‘The deepening of Africa’s financial sector is both a result and a driver of the strong macro-economic gains reflected across several of the continent’s core markets over the course of the past decade. ‘That said, room for growth and improvements exists in abundance,’ Freemantle said.

‘For Africa’s youthful aspirants, the ability to access finance for vehicle and home loans, to start or expand entrepreneurial ventures, or to fund further tertiary education will prove immensely supportive in driving the next phase of the continent’s erstwhile commercial re-invigoration.’

MTN Partners Stanbic IBTC on Mobile Money

Posted by banker.ng on May 17, 2012

MTN and Stanbic IBTC Bank- a member of Standard Bank Group- have signed an agreement on the provision of mobile money services to Nigerians.

Speaking at the signing ceremony, which took place at MTN’s Lagos office recently, Chief Executive Officers of the two organisations said the partnership represented a major step in Nigeria’s e-payment segment and will facilitate the provision of secure, convenient and user-friendly mobile money services to millions of people across the country.

According to the Chief Executive Officer of MTN Nigeria, Brett Goschen, MTN’s partnership with Stanbic IBTC Bank was in line with the telecommunications company’s promise to empower its customers by providing them with improved services and more innovative applications. “Deployment of the mobile money service in Nigeria is gradually changing the process of managing financial transactions in the country. We are proud to partner with Stanbic IBTC Bank on facilitating this positive change,” he said.

He added that mobile money, while bringing banking services to the previously unbanked, also opened up a wide range of benefits and value added services to the banked sector, including corporate, small and medium sized enterprises (SMEs) and individual customers.

Managing Director of Stanbic IBTC, Mrs. Sola David-Borha, said the partnership would avail the bank of MTN’s nationwide platform to provide mobile payment services and in the process break down the traditional barriers hindering financial inclusion of millions of Nigerians.

This, she said, would bring low cost, secure and convenient financial services to urban, semi-urban and rural areas across the country, opening a new channel of financial services delivery and complementing the Central Bank of Nigeria’s quest to usher in a cashless economy in the country.

“We are very pleased to partner with MTN on this strategic initiative. Our goal is to increase access to mobile money service through this platform by providing an entry point for people that would not ordinarily come into banking halls. The partnership will also provide the banked with an alternative to handling physical cash by getting them to do basic transactions using the mobile banking network. We are leveraging on our banking expertise, the large subscriber base of the MTN network and the knowledge users have of the mobile phone to deliver non-traditional, low cost financial services to all Nigerians, unbanked artisans, traders, market women and farmers among others, as well as under-banked individuals,” she stated.

The mobile money initiative, an integral part of the broad objectives of the country’s vision 20:2020 was conceived by the Central Bank of Nigeria as a result of its critical nature to achieving a cashless society which, according to the apex bank, is fundamental to the nation’s goal of becoming one of the top 20 largest economies in the world by the year 2020.

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