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Banks’ Chiefs, Others Carry Out Insider Abuses- CBN



Godwin Emefiele, Governor, Central Bank of Nigeria

Godwin Emefiele, governor, Central Bank of Nigeria (CBN), has expressed the apex bank’s dismay over the level of corporate governance abuses perpetrated by the top echelon in banks, and warned that the regulator would punish offenders.

He spoke at this year’s edition of the CBN-Financial Institutions Training Centre (FITC) Continuous Education Programme for Directors of Banks and Other Financial Institutions.

Emefiele, who spoke on the theme: “The Next Level of Corporate Governance Practice”, said fit and proper persons should be appointed into the boards of banks, adding that corporate governance is undoubtedly an essential pillar in financial system stability.

He said the failure of banks’ boards in carrying out their oversight functions by checking management excessive risk taking, conflict of interest, undue concentration on short term gains and excessive executive compensation fundamentally affect the ability of financial institutions to meet their core mandates.

To Emefiele, a safe and sound financial system is dependent on the quality of corporate governance practices, which in turn depends on the quality of the board of directors and their ability to discharge their responsibilities honourably.

The CBN boss directed independent bank directors to rise up to their responsibilities and be the conscience of their institutions in the interest of depositors and minority shareholders. “Independent directors do not need to be friends of the managing directors. They can’t fire you but the CBN can remove you if you don’t do your job well,” he said.

Emefiele said banking needed independent directors who “are bold, sound and experienced to do what we want them to do.”

Emefiele said the CBN will get tougher on insider related loans, adding that many bank chiefs and executive directors borrow from the banks at very low interest rates.

He said banks are not owned by shareholders who he said were simply used by God to establish them. He said depositors funds are 10 times higher than shareholders’ funds, hence the interest of the depositors should be paramount. “A bank managing director who feels he set up the bank has only been used by God to set up such bank. The real owners of the banks are depositors,” he said.

In Emefiele’s view, even though shareholders are important to banking, the most important stakeholders are the depositors. “It is important for us to ensure we all protect them. That is why in the programme, we said that independent directors must remain independent and perform their roles and responsibilities, no matter how tough it is.  They have to look at insiders who are shareholders and tell them what is good and what is not right. Yes, we are going tough because it is a dynamic environment and we will continue to take drastic actions against that insider abuse,” he said.

He spoke of a bank with 4.5 million depositors that the CBN is monitoring but has decided the lender will not be allowed to go down.

“If we allow the bank to go down, how can we explain to the 4.5 million customers that their money is lost? The impact of such closure on the economy will be tough,” the CBN boss said.

To him, running an efficient and sound bank is all about strong governance, adding that weak governance ensues when shareholders employ inexperienced or unenlightened people to run their banks.

“Weak governance will ensure that liquidity position in banks is eroded. We want to make sure that banks remain strong by ensuring that strong governance exists. It is also about checking your conscience to tell yourself, have you performed your role diligently, that you are not only serving your own interest as shareholders but also serving the interest of larger stakeholders? These are some of the issues we will be looking at going forward because those depositors are very important,” he added.

”It encompasses the protection of minority shareholders, disclosure provisions,  the role and structure of the board, complexity on the definition of related parties, compensation structures and much more. Therefore weak corporate governance can undermine financial stability by heightening vulnerability of financial institutions to external shocks,” he said.

He said institutions with sound corporate governance and effective board oversights are more resilient to shocks and operate more profitably. “Given the crucial financial intermediation role which banks and other financial institutions play in the economy, corporate governance for financial institutions is, arguably, of great importance in contrast to governance in non-financial companies,” he said.

He said that prior to the global financial crisis of 2007 to 2009, it was taken for granted that the banking sector in Nigeria was safe and sound. However, this trust proved to be misplaced as it was realised that none of the 25 banks that scaled the CBN consolidation exercise was immuned from failure if they operated in a poor corporate governance environment.

Accordingly, the 2014 CBN Code of Corporate Governance for Banks and Discount Houses (an improvement on the 2006 Code) was one of many responses to the industry’s post-consolidation corporate governance challenges arising largely from the integration processes. The mass enlightenment on corporate governance in the industry today could very well be attributed to the issuance of the CBN Code. The implementation of the Code largely addressed ineffective board oversights; overbearing influences of chairmen on MDs/CEOs; weak internal controls and prolonged tenure on the board amongst other anomalies.

“While appreciable momentum had been attained in corporate governance practices in the Nigerian Banking Industry, we need not rest on our oars as vulnerabilities are still evident. The recent economic recession has shown that the financial industry still harbours weaknesses in governance, exemplified by instances of unclear rendition of returns, corporate governance abuses, such as unreported losses, huge exit packages for directors, insider non-performing loans, over-domineering executive management, contravention of regulatory/prudential guidelines and lending limits, poorly appraised credits and weakening of shareholders’ funds among others.  Overall, the huge challenge of ‘key-man’ risk abound in our industry,” Emefiele said.

Emefiele stressed that ensuring good governance is a responsibility of all stakeholders.

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Telecos Seek Licences To Boost Financial Inclusion



Association of Licensed Telecommunications Operators of Nigeria (ALTON), has said operators have commenced discussion with Central Bank of Nigeria for licences to provide mobile payment services.

Mr Gbolahan Awonuga, the Executive Secretary, disclosed this yesterday at the third quarterly forum of the Nigeria Information Technology Reporters Association (NITRA) in Lagos.

The theme of the forum is: ”Digital Payment: Prospects and Challenges of a Financially Inclusive Nigeria”.

He said that, to fit into the mobile money platform, the Nigerian Communications Commission (NCC) graciously agreed that the operators should get the super agent licence from the Central Bank of Nigeria (CBN).

According to him, the telecommunications companies have to operate on subsidiary names, which are not the telecommunications companies’ names.

”They are working on getting the licences already. Globacom recently launched its mobile money platform, so the operators are already keying in to boost financial inclusion.

”The telecommunications companies have been doing so much on electronic payment. We are going for licence for e-payment.

”Nigeria is lagging behind so much in mobile payment, and this is obvious in the rural areas.

”So the telecommunications operators want to bridge the gap that the country has in financial inclusion,” he said.

Awonuga said that there was the need to boost local content in the country hence, the local content policy should be implemented to grow the economy.

Mr James Emadoye, the President of the Institute of Software Practitioners of Nigeria (ISPON), said that Nigerians should encourage local content in software development.

Emadoye said that software was an intellectual property, which should be protected.

According to him, foreign technology was developing while Nigeria’s own was shrinking.

”The national cake, which is oil in Nigeria, is running dry, so we need to rethink on another opportunity, which lies in software development,” he said.

Emadoye urged the media to help change the narrative of software in the country.

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Talking IT

How to Build More Connected & Inclusive Cities



Carlos Menendez is president, Enterprise Partnerships, for Mastercard

By Carlos Menendez,

Carlos Menendez is president, Enterprise Partnerships, for Mastercard. In this role, Mr. Menendez is responsible for expanding the company’s operations globally with partnerships in the Smart Cities, Retail, Travel and Banking space. In this piece, he looks at ways to build more connected and inclusive cities.

When thinking about the cities of the future, I know that they will be more connected, and I strongly believe that they must be more inclusive.

We can’t have the Internet of Everything without the Inclusion of Everyone. Already today, a growing number of cities are using smart technologies to better connect people to places and to each other – and more importantly also connecting people to opportunities for better and safer lives.

Unfortunately, what still causes a significant amount of friction in our cities and prevents inclusive growth is the dominance of cash. In fact, close to 85 percent of all consumer payments in the world are still done with cash or checks.

This means that far too many people are trapped by default in an informal economy. They lack the financial services to guard themselves against risk, save for themselves, plan for their children’s futures, and build better lives.

Two years ago, Mastercard set a global goal to bring 500 million people into the financial mainstream by 2020. And we’re well on our way to doing that.

In just a few short years, we have helped connect more than 300 million people through partnerships with banks, governments, retailers, and NGOs.

We’re also working with our partners to enable and grow 40 million small merchants and micro-entrepreneurs because it’s not just individuals that are too often trapped in a cash economy – stores lose billions of dollars every year to leakage and theft.

Success Factors For Future Interconnected and Inclusive Cities

It’s no secret that the world is becoming more urban. The UN estimates that within the next generation, the number of people living in cities will jump from 50 percent today to almost 70 percent.

Already today, cities are grappling with the challenges that come with their growth. Congestion, pollution, and poverty are features of many of the world’s major cities, and it will take a collaborative effort by the public and private sector to meet these challenges.

We have seen progress, and there are some common themes around how we can leverage technologies and partnerships to move toward more connected, more inclusive cities.

Transforming Public Transportation

The key approach is to tackle those sectors in our cities that have high levels of everyday cash usage, and one of these areas is mass transit.

About 65 percent of all urban transportation is still paid in cash, which adds up in significant operational costs to transport providers and puts drivers and passengers at risk of getting robbed.

In over 100 cities around the globe (including London, Singapore, Bogota and New York), Mastercard users are paying their train or bus fare simply by tapping their card or swiping their phone.

Only a couple of weeks ago, Sydney became the first city in Australia to introduce contactless payments for public transport – no more queuing in front of tickets booths, topping up cards, or fumbling for cash.

In London, already 40 percent of daily pay-as-you-go journeys on the city’s underground, buses, and commuter rails are paid by contactless cards/phones – which has dropped Transport for London’s cost of selling tickets from 14 to 9 percent of the fare and has saved them over 100 million pounds in cash related costs.

Once payments are digitized, data insights help city governments better understand and connect with their citizens. In Chicago for example, UI LABS, is bringing technology and transportation providers together to find ways to better balance transit supply and demand across a city.

When people use their cards for public transport, this can help form a habit of paying electronically in shops and stores as well which can be a critical factor for enabling broader financial inclusion.

For instance, those living in a cash economy face significant risks when it comes to putting away money for savings. This lack of savings then makes it challenging for people to access lower priced weekly or monthly tickets, instead of more expensive daily tickets.

This is why a few weeks ago, the Government of Mexico City announced its plans to launch a debit card that can be used for both transit payments as well as every day purchases, and potentially social disbursements.

Empowering Small and Micro Businesses

Another critical angle to building more inclusive cities is to focus on the role of small businesses and how to connect them to electronic commerce.

In most parts of the world, small businesses account for well over 90 percent of all enterprises. However, small and micro entrepreneurs have historically been underserved when it comes to their ability to accept electronic payments. For a small market vendor, bigger tickets and additional sales from someone using their card instead of cash are important steps on the economic ladder, which are typically followed by better access to credit.

There are various ways to address this. One is by turning a seller’s mobile phone into a payment terminal. Masterpass QR, which is already available in eight countries in Africa and Asia, is a new electronic payment option that lets customers pay for goods and services from their mobile phones by scanning a QR code displayed at a store’s checkout.

In Kenya, Mastercard is partnering with Unilever to simplify the way smaller stores order and pay for their goods with a wholesaler.

Today, this is a very cash intensive process. Digitizing this process will give small entrepreneurs better access to funds, facilitate inventory ordering and management, and provide better sales insights about their business.

Partnering with Governments

Like businesses and individuals, governments make and receive payments. And many governments around the world choose electronic methods for things like procurement, social benefit payments, or tax collection. Electronic payments are not only more efficient and more transparent, they’re also a great way to lead by example.

At Mastercard, we have partnered with over 60 governments globally to deliver more than 1,600 scalable cashless programs in various cities and communities around the world.

In the Middle East and Africa, we have joined forces with public institutions on solutions that link a government identity with payments and enable people to become financially included on a massive scale. In Egypt, the government plans to extend financial inclusion to over 54 million citizens through a digital National ID program.

But what’s most important for many people, is that this may be the first time they see their name printed on a financial instrument. This gives them a financial identity, and it may give them the first chance to move out of the cash economy into the formal economy.

Technology as the Great Enabler

Simplifying access to public transport, empowering small and micro businesses, promoting cashless programs – what these three areas have in common is that technology works as a great enabler. While the know-how exists to solve many of the world’s most pressing problems, no one can meet these challenges on their own.

It takes partnerships across businesses, governments, NGOs and academia to advance more connected and more inclusive cities – and to build healthier, safer and more prosperous communities.

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Seamfix Set To Unveil Identity Management Solution ‘BioRegistra’



(L-r): Chimezie Emewulu, managing director and Chibuzor Onwurah, executive director, both at Seamfix, the innovative company behind Bioregistra,

By peter oluka

Seamfix, Nigeria’s leading provider of identity management solutions, has announced plans to unveil an innovative data management solution to the Nigerian market.

The solution, named Bioregistra is a state of the art KYC (Know Your Customer) as a service online platform developed primarily for individuals and corporates (business owners) with the aim of ensuring they are able to capture data, store the data, and have access to the data at any time, as they may desire.

The solution allows a fully automated process that ensures seamless execution of all KYC business processes, thus enabling faster customer on-boarding and increasing customer satisfaction.

Commenting on the solution ahead of the launch, Chimezie Emewulu, managing director of Seamfix described Bioregistra as a game changer in data capture and management.

According to him ‘With BioRegistra, the difficulty associated with knowing and identifying your customers is a thing of the past. The Platform enables you to capture and store your customer KYC details or information and further allows you access and to view the captured information or data whenever required. Your customer in this context is not limited to any sector.

Emewulu further highlighted some of the benefits of Bioregistra and the competitive advantage. According to him, BioRegistra system has an intelligent quarantine engine designed to detect fraudulent and fictitious records and prevents them from being processed by running the records through security and inbuilt validation checks.

He further stated that the solution helps to save cost for users. “BioRegistra is a huge cost saver for individuals and companies. It rides on a pay-as-you-capture scheme which drastically cuts cost as it is more economical to leverage on the online platform rather than purchasing custom and bespoke enterprise applications which are way more expensive. A customer only pays for what has been captured or enrolled”, the MD explained.

Chibuzor Onwurah, executive director, Seamfix said Bioregistra is unique because it was an innovation by Nigerians to solve a global data management challenge.

“Bioregistra is a proprietary solution by Seamfix, a Nigerian company. Bioregistra reflects the creative and innovative spirit of Nigerians. It mirrors our belief that technology should help solve basic human problems. This is exactly what this solution does in helping individuals, organisations, governments among others to capture, store and manage data for improved efficiency”, he said.

Seamfix, the leading identity management solutions provider in Nigeria established in 2007 when some young and talented individuals teamed up to make a remarkable change in the society using cutting-edge technology.

Seamfix specializes in providing technology-enabled platforms that will serve as a driving force for people and businesses to achieve more daily.

Over the years, Seamfix has built systems with footprints in Identity management, Digitization, Lending, Business solutions and Customized services.



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