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CBN Expels 16 Banks from Forex Market

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Central Bank of Nigeria (CBN) on Tuesday stopped 16 Deposit Money Banks from participating in the Small and Medium-scale Enterprises (SMEs)window of the foreign exchange market.

Isaac Okorafor, acting director, Corporate Communications Department, CBN, said the decision to stop the banks from participating in the SME wholesale window of the forex market was taken following series of complaints that some of them were deliberately frustrating efforts by many SMEs to access forex from the window.

The apex bank had last month created the SME wholesale window to make it easier for small-scale businesses to access forex to import critical materials for their operations.

The CBN explained in the statement that based on field reports, only eight banks had sold forex to the SMEs segment since the inception of the new window.

The apex bank noted that only the eight banks would be allowed to access forex in that segment of the financial market henceforth.

The banks are Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank Plc.

The CBN said all the other 16 banks that had refused to sell forex to small businesses after accessing over $300m offered to the SMEs’ wholesale forex window since its creation last month would be sanctioned accordingly.

Some of the banks to be sanctioned are First City Monument Bank Plc, United Bank for Africa Plc, Citibank, Ecobank Nigeria, First Bank of Nigeria Limited, Guaranty Trust Bank Plc, Keystone Bank Limited, Skye Bank, Stanbic IBTC Bank, Union Bank Plc and Wema Bank Plc.

Okorafor, however, stated that the sanction would be lifted immediately any of the affected banks showed evidence of significant utilisation of the funds allocated to them under the SME window.

As an incentive, he said banks that had utilised their SME funds were allocated all of the $100m sold at Tuesday’s wholesale auction.

He urged all stakeholders to play by the rules for the benefit of the entire country and its economy.

The statement read in part, “Following persistent complaints that some Deposit Money Banks have deliberately frustrated efforts by many SMEs to access forex from the new window created by the CBN, the apex bank on Tuesday, May 2, 2017, barred all but eight banks from dealing in the SME wholesale forex window.

“The financial regulator took the decision to bar the erring banks based on field reports, which revealed that only eight banks had sold forex to the SMEs segment since the inception of the new window.

“The CBN frowned at the action of banks that declined to sell foreign exchange to the SMEs to enable them to import eligible finished and semi-finished items despite the availability of forex from the CBN wholesale intervention window.

“The banks not barred include Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank.”

The CBN in the statement warned that it would “not sit back and allow any form of instability in the interbank forex market through the actions of institutions or individuals.”

The apex bank, the statement noted, urged all stakeholders to play by the rules for the benefit of the entire country and its economy.

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E-Financial

Bitcoin Smashes Through $8,000 for the First time

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Bitcoin hit a new record high on Monday after smashing through the $8,000 level for the first time over the weekend, marking an almost 50 percent climb in just eight days.

The new high came after leading U.S. payments company Square Inc said late last week that it had started allowing select customers to buy and sell bitcoins on its Cash app.

Bitcoin traded as high as $8,197.81 on the Luxembourg-based Bitstamp exchange, up over 2 percent on the day and around 48 percent up since dipping to $5,555 on Nov. 12.

An eye-watering eightfold increase in the value of the volatile cryptocurrency since the start of the year has led to muliple warnings that the market is in a bubble, and institutional investors are broadly staying away.

Retail investors, however, as well as some hedge funds and family offices, are piling into the market. The “market cap” of all cryptocurrencies hit an all-time high of over $242 billion on Monday, according to trade website Coinmarketcap.

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ePayment Stakeholders’ Seek Review of Policy on PoS to Boost Growth

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Worried by slow pace of growth in the use of Point of Sale terminal (PoS) as a means of payment in the country, stakeholders have called on Central Bank of Nigeria (CBN)to review its policy direction in that ecosystem.

 

This is coming as Nigeria CommunicationsWeek investigations revealed fluctuations in the figure of registered and deployed terminals between August and October this year.

 

According to a report released by NIBSS the industry Payments Terminal Service Aggregator (PTSA), the number of deployed  terminals increased in August to 141, 531 and dropped to 140, 448 in September and increased again in October to 145, 350.

 

Also, same was noticed on the number of registered terminal with August recording 173, 815 and came down to 169, 318 in September while October witnessed increase to 176, 185.

 

Sarafadeen Fasasi, president, Association of Mobile Money Agents in Nigeria, attributed this slow growth to a number of factors which includes lack of support to drive the business.

 

“Support I mean is providing financial backing for transactions on the PoS just the way ATMs are loaded with cash for withdrawals. Today, there are no facility for PoS agency business by the banks which is the major determinant of success or failure of PoS innovation,” he said.

 

He decried lack of structure on ground to resolve issues arising from PoS transactions.

 

“If customer’s account is debited without ATM paying, the individual will go to the bank and fill form for reversal, but in PoS transactions there is no such thing which has pushed customers to resolve to holding on to PoS attendant to ensure that the issue is sorted out. As at today, all issues arising from ATM, switching, PoS, online among others, are under NIBSS which does not have the capacity to coup with these issues,” he said.

 

He however, urged CBN to review her policy on PoS for it to witness the desired growth, such review he said could come in creating a unit to address issues arising from PoS transactions.

 

“If the policy is reviewed it will build trust and confidence in the use of the platform for payment. More so, PoS fixed charge is high at .075, this means that customer is charged N750 on N100,000 transaction compared to N65 charged on withdrawal outside of customer’s bank ATM,” he added.

 

Onajite Regha, executive secretary/CEO, E-Payment Providers Association of Nigeria (E-PPAN)said: “So far, E-PPAN in its advocacy nature has taken steps ahead to break the barrier of this poor adoption. We are looking into capturing the lower part of the pyramid with the mobile payments awareness which will see more people included financially and thereby increase the adoption of the Cashless policy.”

 

“We are also open to discussions on advocacy and sensitization from financial bodies who have products and services to render in the pursuit of the success of this policy. From time to time we carry out sensitization, financial literacy and education programme and we partner with stakeholders to expose the benefits of electronic payments to consumers across the strata”.

 

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Africa FinTech Foundary set to Disrupt FinTech Ecosystem

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L-R: Victor Etuokwu, Executive Director, Personal Banking, Access Bank Plc; Averi Thomas-Moore, Company Builder, Venture Lab, ACCION and Victor Okigbo, Head, Africa Fintech Foundry (AFF) at a press conference to announce the maiden edition of ‘AFF Disrupt’ Conference 2017 in Lagos.

Africa FinTech Foundary, an Access bank accelerator which seeks to create new opportunities in sub-saharan Africa by providing a platform designed to inspire and challenge African innovators and entrepreneurs is set to launch with a conference on FinTech ecosystem.

The conference dubbed ‘AFF Disrupt’ is scheduled to hold on December 14, 2017 in Lagos.

Victor Etuokwu, executive director, Access bank, said that AFF will provide African companies seeking to launch their products, with capacity building and training in business development, provide connectivity to global innovation grids, promote access to capital, create opportunities for partnership as well as showcase best practices and successes in African-led innovation solution.

“Every FinTech seeks to disrupt the world through product or solution and AFF is here to disrupt. We want to do things that will drive the economy through innovative products and solutions. We are going to gather a team of investors that will help fund innovators that graduates from the accelerator programme of AFF,” he said.

Victor Okigbo, head, Africa FinTech Foundary (AFF), said that the Foundary has lined up activities preceding the main launch event which include master classes on entrepreneurship technology, enterprise design, collectively referred to as the AFF Innovation Tour, holding in four African cities this November.

He said AFF is in partnership with global technology giants such as IBM, Microsoft, Systemic Logic, Kantar TNS, SAS and Access bank as part of the AFF Disrupt programmes.

Adekele Adekoya, Event Coordinator for the AFF Disrupt conference, said that AFF seeks to create new opportunities in sub-Saharan Africa by providing a platform designed to inspire and challenge African Innovators and entrepreneurs.

“We want to engage with startups in all the locations we visit. This is a very good opportunity for startups to take advantage of the partner network created by AFF DISTRUPT and its partners to create linkages and networks that can help grow their businesses,” he said.

The vetting process is currently going on, and a total number of 12 starts-ups would be selected from a pool of about 400 start-ups, to demo at the AFF Disrupt 2017 conference holding in Lagos and also get to be part of the Africa FinTech Foundary’s 3-month accelerator programme.

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