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Jaiz Bank MD Says NPL within Tolerable Limits




As the incidences of Non-Performing Loan (NPL) continue to dog bank’s in Nigeria, Jaiz bank plc Wednesday disclosed that its exposure to NPLs in the short to medium term was within tolerable limits.

Mr. Hassan Usman , Managing Director of the bank, said in Abuja on Wednesday that Jaiz bank was not heavily or significantly exposed to the oil sector, but the bank’s exposure is to real estate.

Hassan Usman added that Jaiz bank has limited exposure because Forex: is important because “we do not have the exposure that other banks have because we do not borrow or invest in dollars.”

Speaking on the foreign exchange situation in the country now, Usman noted that Jaiz bank “makes money from selling Forex and our counterparts/customers depend on forex for various reasons. If they don’t get dollars on time our exposure to them is intertwined.”

Hassan Usman also justified listing of the bank’s shares in the Nigerian Stock Exchange (NSE) on twins reasons of enhancing transparency and openness in the  bank’s activities.

Usman said the gesture of listing Jaiz’ shares “fulfilled the bank’s pledge in 2012 at its Initial Public Offerings (IPOs), that its shares would be publicly listed at the Exchange to create additional values for its shareholders.”

The Jaiz MD was optimistic that the bank’s outlook for 2017 will be much better than 2016, stressing that “if current policies on forex and infrastructure provision is maintained, 2017 will be a good year.”

Jaiz bank he said has challenges like any growing institution. One of such challenges he said has to do with perception. According to him, “this product is not a religious product it is a mode of financing that tries to provide goods and services to people who cannot afford to buy such goods and services directly.”

Usman lamented that the most important challenge facing the bank “is awareness by all stakeholders but this is being overcome. Islamic banking is not about the creed. There are issues about specifics. Even those clamouring did not fully know or understand what Islamic banking was all about. They thought it was charity, when they found out, that they had to pay for services there was a rude shock, we normally try to explain this. It is an Organization set up to make profit, create value and be sustainable.” Other challenges he pointed out are the enabling environment like infrastructure for non-interest banking like liquidity instruments. The Ministry of finance he said “had promised us last year that by the first quarter of this year, there will be sukuk. Another challenge is the limited number of qualified trained manpower to manage Islamic banking.”

In spite of these challenges, Hassan Usman noted that “the product (Jaiz bank) has proved itself to be sustainable. We now have national franchise branches in South West and South-South and we are opening more branches in other parts of the country.”

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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



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



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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Blockchain to Reinvent African Economies, Ecosystems, Organizations



By Dipo Faulkner

In today’s fast emerging economic zones, technology adoption can be a journey of faith into the unknown, riddled with the conflicting priorities of modern societies, bouts of human and institutional inertia and not to forget, legal and regulatory considerations.

Having grown up in Nigeria, I have first-hand experience on how complex or excruciatingly difficult real estate transactions can be.

I stand to be corrected but the multibillion-dollar property and real estate sector, a key sector of the Nigerian economy, is largely driven by paper-based systems and processes, and the industry could do better with the aid of information technology. Advanced technology solutions will help tidy things up, and make transparency, trust and peace of mind a permanent feature of dealings in the sector.

Every document or financial transaction that needs to be exchanged, settled, confirmed, validated or signed has a similar element of friction. It is obvious that when these sorts of bottlenecks are eliminated, significant economic value is unlocked.

In any property deal, the number of participants that are required to be involved from realtors, banks, insurance companies, brokers, land registries, government tax authorities, and other intermediaries is incredible, not to mention the ever-present danger that the seller of the property may not be the actual owner of the property being sold.

In any case, I suspect this is not a problem unique to Nigeria. The respected Peruvian economist Hernando De Soto believes that up to five billion people worldwide suffer from lack of title to their property. He reckons that this global scenario results in more than $20 trillion of capital that is outside of the traditional financial services ecosystem.

Banks have a key role to play in this dynamic. Their functional and statutory obligations mean they must galvanize social harmony, business investment and economic value for their diverse stakeholders.

I am aware that Nigerian banks and financial institutions across Africa have consistently sought for ways to resolve key sector issues like this one. But before supporting economic activities, these banks must ensure that their product and service delivery value chains are driven by a creative workforce and technology innovation.

Also, I know from my interactions with chief technology officers in the financial services sector that their ongoing investments in technology systems has helped the sector to build operational resilience into their systems even they begin contemplating adopting new concepts and practices like blockchain.

Designed to inject the trust element in technology-enabled transactions, blockchains are built on shared ledgers where participants write transactions in near real-time to an unbreakable chain that becomes a permanent record of an asset or transaction. This is viewable by all parties in the transaction. Blockchain thus allows businesses to work together in a new way resulting in lower cost, faster transactions and less risk.

In this way, blockchain can be used by individuals who want to complete transactions involving multiple parties.

Large organizations may also want to use blockchain to collaborate across organizational silos. Ecosystems could tap blockchain to handle complex transactions across different jurisdictions, or governments may want to use it in the service of citizens.

This will have a profound impact, bringing wholesale change to organizations, ecosystems and economies. My personal view, also echoed by other experts, is that blockchain technology will do for transactions what the internet did for information — and in the relatively near future.

My thoughts on this subject seem to have been authenticated by two recent studies released by IBM’s Institute for Business Value (IBV) which found that banking and financial markets are adopting commercial blockchain solutions much faster than initially expected.

15% of banks and 14% of financial market institutions globally interviewed by IBM plan to adopt full-scale, commercial blockchain solutions in 2017. And within the next three years, 65% of banks expect to have blockchain solutions in production.

Consider how assets from cars to contracts, art to corporate bonds — even identity-based assets, such as health, product provenance, or tax records — can be shared, exchanged or transferred on a blockchain platform with greater efficiency and privacy.

As transaction costs plummet and the way organizations are governed matters more and more, blockchains will create a new distributed form of business governed and managed transparently through smart contracts that include agreed upon by-laws.

In the emerging blockchain economy, the role of third-party intermediaries to broker trust and/or to reconcile will increasingly be called into question as we reinvent new processes that eliminate the need for such reconciliation and intermediation.

While blockchains can powerfully improve businesses’ efficiency, trust and value, executives must carefully evaluate where blockchains can be used to gain improved efficiency and support new business models. I would therefore recommend that businesses answer these three questions:

  • How fast should we move? Early movers in the blockchain adoption race may have an advantage as they are setting business standards and creating new models that will be used by future adopters of blockchain.

We’re also finding that these early adopters are better able to anticipate disruption, fighting off new competitors along the way.

  • How can we scale across business networks? Once blockchain technology has scaled across multiple participants, they can anticipate achieving the kind of network effects that can drastically reduce the frictions that curb growth.
  • How can we innovate with new revenue models? As new entrants and business models emerge, banks may be forced to defend current revenue streams or move to where the money will flow next.

New revenue models must anticipate the potential for disruption in areas core to the business today and in the future.

As the market evolves, blockchain technology may add at least one new revenue stream; and so, the potential to monetize reference data looms large.

My take is that African businesses, especially banks and non-bank financial institutions, will be the first set of enterprises to get on board the blockchain train, and fervently exploring the potential uses of blockchain technology.

Beyond banking and real estate, other economic sectors including manufacturing, retail and government agencies will pick and choose lessons from these trailblazers, recalibrating their needs and expectations as they gradually adopt blockchain technology.

In other climes, the Japan Stock Exchange and London Stock Exchange Group are two of the leading bourses collaborating with IBM to explore blockchain to manage risk and bring additional transparency to global financial markets.

Dipo Faulkner is the country general manager, IBM Nigeria.

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