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CBN Should Create Incentives for People to go Cashless – Agboola
Bolade Agboola is an executive director at CashCraft Asset Management Limited. He is an Associate of the Chartered Institute of Bankers and Chartered Institute of Stockbrokers. He is a registered Issuing House Operator and has worked for about 20 years in various banks before joining CashcraftAsset Management Limited.He spoke to funmi ilesanmi on issues bothering on the capital market and other economic issues
Confidence of Nigerians in the Stock Market
Confidence in the stock market has to be built over a period of time because a lot of people lost money as a result of the prolonged economic and banking crisis perhaps because of the way we handled it. We can now compare our crisis with that of other nations and the way those who have responsibility to manage us through has performed. It will take quite a while for full confidence to be restored in the stock market but certainly the worst is over .All that could gone wrong has happened so what we will be having is good news and that should see the market stabilize and begin to grow modestly. We will begin to see this trend as 2011 corporate results is released and when the banks that acquired the AMCON banks begin to come out with their quarterly results. What AMCON gave them was the good bank while the bad bank is still with AMCON to deal with .With the efforts of the Nigerian Stock Exchange to appoint some Stockbrokers as market makers the wild volatility in the market should be a thing of the past while we should see sustainable growth. The signs from the global economy especially US and China are reassuring that modest growth from the leading economies is feasible this year .just as there are chances that the Euro zone crisis would also be resolved given the determination of leading economies in the zone to support the weakling ones . Nigeria’s outlook may not be dampened by the Boko Haram crisis which I think is being contained. I want to believe that the Federal government will eventually find a solution to the crisis before the end of the year.
Role of Euro Crisis in Fall of Nigeria Capital Market
I don’t think the Euro crisis has anything to do with the fall of our capital market but there is no doubt it might have impacted on the duration of the crisis which will be 4 years old in March 2012.This is understandable because foreign investors is believed to own close to 70 per cent of the investment in the stock market ,so, if their economy is in turmoil we cannot expect new investments to come and stabilize the market .In fact they may need to wind down some of their investments here to meet their obligation at home .
Divestment of Insurance Companies
The divestment of banks from insurance companies is part of the pursuit of the CBN towards mono -line or specialized banking. What we will have eventually is a disguised management buy-out because the economic and banking crisis has frozen credits so it will be difficult for new investors to get fresh funds to pick up the investment . Since officially, these banks are not supposed to have shares in those companies what they may end up doing is to find discrete means is to empower their management to buy the companies. It would not really have any effects on their business, it is just unfortunate that the line of banking we have chosen does not allow the kind of thinking that follows successful universal banking model that have proved to support economic development in Germany and many other countries.
We might have over reacted to the regulatory failures that led to the financial crisis but time would tell whether it is a good or bad decision .The school of thought that allowed banks to invest in such ventures was that at a particular time the banking industry was able to attract the most brilliant professionals from diverse human endeavors. Also they had a lot of liquidity which was not going into long investments like equities , so CBN then encouraged them to invest the monies in equities and deploy their talented manpower to support and grow such businesses . Unfortunately, because of regulatory failures and the economic crises that came up in 2008, we have now decided to adopt a new banking model. Interestingly, universal banking is still being practiced in many parts of the world while banks in such countries were only barred from doing proprietary trading with depositor’s funds. We have chosen to do specialized banking but time will tell whether we have taken a good decision. I am circumspect about it because I know Nigerian banks are operating universal banking outside the shores of Nigeria. I also know that International banks have branches in Nigeria are also operating some elements of universal banking here , so how we are going to resolve that in the future, I do not know; but I believe that it is one of those decisions that is neither here nor there.
Directive that Registrars Stop Handling Shares of their Parent Companies
It is one of the mysteries of our system. Two of the most effective registrars in this country in terms of performance and everything are owned by two of the leading banks First Registrars and GT Registrars. In terms of any rating in the market they come first and second whether they are handling shares of their own banks or shares of other banks.
It is also due to regulatory failure during the boom era that we are now saying they should not handle shares of their parent companies and those parent companies should divest equities in the companies .We have forgotten that every activity of the registrar is regulated and they have timelines which regulators ought to check from time to time . It is like we do not even trust our capacity to run those institutions. Whether the ownership structure of the registrars would have mitigated the disaster we had in 2008 and thereafter is debatable. As far as am concerned it was a multiple accident starting with the way we telescoped development of our banks with the 2004 consolidation exercise and the style we used to manage the banks that failed the stress test in 2009 , all of which has now become history
Unauthorized Sale of Shares by Stock Brokers
Not all unauthorized sales are intentional as the brokers do make mistakes while punching their computers .Such error is supposed to be corrected before settlement date of T+3 . The most common sources of allegation of unauthorized sales is from investors who took loans from their brokers using their stocks as collateral. When the broker sells the collateral to recover the debt they run to SEC, the Exchange or CSCS and allege that the sale was not authorized. These bodies have done tremendously well in resolving such issues by digging into the facts to establish the truth while brokers were punished where they err. With trade alert, know your customer documentation, e-banking and all other e-services, such complaints should be fading out more so as there are no margin loan at least for now. We will have some pocket of unauthorized sales due to operational errors but that will not significantly affect confidence in the market.
ICT in Stock Broking Business
We cannot do our business without ICT. You recall that during the Fuel Subsidy crisis most people were able to trade from their homes that are how far ICT has taken us. Today you can be in Maiduguri and instruct your broker to buy or sell stock for you and pay there or collect the proceeds from there. So you do not need to physically go to your broker to transact any buy or sell transactions and that shows what ICT has done in facilitating that. I believe that as the national ICT platform improves, all these things will improve. ICT has actually helped the business tremendously.
CBN’s Cashless Policy
The cashless policy is a desirable policy for the convenience of the customer and the banker as the parties don’t want to carry bulky cash in their wallet or bullion vans respectively .This process started in 1998 or thereabout with GEM card and Value card consortium and got a boost after the consolidation exercise as banks had money to deploy ATMS and POS all over the place. We are not hearing of GEM card again. We have made tremendous progress and the move by CBN to accelerate the process is very courageous . It is however strange that we are limiting the amount people can draw in a day and imposing charges for going beyond that. .I see no reason why we should limit the maximum you can take from the bank to N150,000 which is just about $1,000. Is it to make money for the banks which we are helping to lower their transaction cost ? Majority of our traders have meager capital which they turnover on daily basis with marginal profit . That is why they keep cash to do the next business and if that is no longer possible as they have to pay extra charges to do their business electronically . I wonder what will remain if they have to pay COT and POS charges .. I think CBN should take a cue from the great revelation of Nigeria Bureau for Statistics on prevalence of poverty in Nigeria and income inequality . The cashless policy is good but will accentuate poverty and put more money in the hands of bank investors if the compulsion and penalty charges is not abolished . Banks should provide the electronic payment infrastructure as they are doing and recover their cost from the cash processing cost they are saving .
Tackling Fraud in e-Payment Services
I think with the technology adopted, incidences of fraud will be limited but we cannot avoid it because it is the preoccupation of some people to perpetuate fraud so the system must continuously work to be ahead of them by creating disincentive for them to succeed. The CBN must put the banks on their toes to ensure that their system is not prone to fraud while at the same time put adequate measures in place to ensuring the banks investigate frauds as soon as they occur and compensate the innocent victims promptly.
Attaining Single Digit Inflation Rate
Inflation in Nigeria and other emerging economies is determined by so many factors. It may not be easy to bring down inflation in Nigeria because we are a mono product economy whose fate is dependent on the interplay of demand and supply of crude oil in the international market . Fuel price adjustment creates inflation because it is usually done in arrears out of pressure to align it with the exchange rate and international price of crude oil . One of the things the removal of subsidy and full deregulation of the oil sector would have done was to create an initial surge in inflationary rate which would have moderated later . Thereafter as local fuel prices reflect exchange rate and global crude oil price on daily basis the inflationary rate will swing at modest rate. By the side ,I believe we need to change our transportation mode in Nigeria to justify full removal of the subsidy . Other causative factors of inflation includes leakages in government expenditure ,its borrowing to finance largely overheads ,the way the federation account is handled and the massive corruption in the nation Really, it is desirable to have single digit inflation as households ,firms and governments can plan. We need to plan for the future as a nation to take care of the generation coming behind us and that cannot be done with spiraling inflation
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DLM Asset Management Partners Your Study Path on “School is an Asset” Webinar
DLM Asset Management, a subsidiary of DLM Capital Group, in collaboration with Your Study Path, is excited to announce the “School is an Asset” webinar, scheduled for September 19, 2024.
This engaging virtual event will spotlight the crucial role of education as a foundation for a prosperous future and spotlight the Child Education Plan designed to help parents secure their children’s educational opportunities.
The “School is an Asset” webinar will emphasize that education is not just a path to personal success but a significant investment with lasting benefits for individuals, families, and communities.
As the world evolves, the importance of education in fostering personal and professional growth cannot be overstated. This event aims to inspire students and parents to fully embrace and leverage their educational opportunities.
We are pleased to feature an esteemed lineup of speakers, including Egunjobi Daniel Ololade, CEO of Your Study Path; ThankGod Ojabugbe, Portfolio Manager at DLM Asset Management; Goziem Nancy Idonor, Business Development Manger at DLM Capital Group; and Gbotemi Kolowale, Digital Marketer at DLM Capital Group.
Each speaker will provide valuable insights into the significance of education and discuss the Child Education Plan designed to assist parents in financially planning for their children’s education. Attendees will also have the opportunity to engage with the experts during live Q&A sessions to receive personalized advice and answers to their questions.
The webinar will take place on September 19, 2024, from 11:00 AM (WAT). It will be hosted virtually, and free registration is available here. Join us for the “School is an Asset” webinar and take an essential step toward securing a brighter future through education.
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Vale Finance Unveils New Business Banking App to Empower Nigerian Businesses
Vale Finance has launched a new business banking web app. The app is designed to provide innovative financial solutions to empower businesses to thrive amidst the current economic landscape.
According to Sola Adeyinka, Managing Director and Co-founder of Vale Finance Limited, the company has positioned itself as a key partner to Nigerian businesses by launching the new web app. He noted that Vale Finance Limited became fully operational in January 2022 and has since demonstrated its resolve to be a bank that truly pays its customers.
Natasha Atirene, Head of Strategy, Innovation, and Products, emphasized that the Vale Business Banking app is designed to address the challenges faced by Nigerian businesses, particularly the lack of accessible financing options with competitive interest rates. She highlighted that the platform offers quick and easy access to low-interest loans, enabling businesses to secure the necessary capital for growth.
Ayodele Adebayo, Business Development Lead at Vale Finance Limited, stated that the company’s mission has always been to leverage technology to bring financial freedom to businesses and individuals. He added that the launch of Vale Business Banking is a crucial step towards empowering business owners across the country.
Segun Ojo, Chief Technology Officer and Co-founder, spoke about the app’s capabilities, stating that Vale Business Banking offers seamless transaction capabilities, ensuring that every business owner can manage their finances and customer interactions efficiently. He added that the web app provides a user-friendly interface, allowing businesses to easily register and set up accounts.
Patrick Osadebe, Director of Business Banking at Vale Finance Limited, concluded by saying that the launch is a testament to the company’s commitment to supporting Nigerian businesses. He emphasized that Vale Business Banking is providing businesses with the tools they need to overcome challenges and achieve sustained growth.
The Vale Business Banking web app is now available for registered businesses, marking a new era of financial empowerment for entrepreneurs across Nigeria.
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Field Launches Service to Tackle Maternal Mortality Crisis in Africa with $11M Backing
Field, African healthtech company, has today announced the launch of a route-to-market service that will introduce emerging therapies to tackle the urgency of maternal mortality, newborn and child health, along with nutrition.
The initiative will leverage Field’s proprietary technology, distribution, and financing services, which today powers a network of over 40,000 private and public healthcare providers in rural and urban areas across Kenya and Nigeria.
The initiative launches with an initial $11m in support from the Bill & Melinda Gates Foundation, in recognition of Field’s commitment to introduce emerging therapies and supply chain transformation in combating Africa’s most urgent health priorities.
Since its inception in 2015, Field’s streamlined infrastructure has facilitated over 800 million health interventions across more than 60 therapeutic areas, such as family planning, HIV and Tuberculosis. Starting in Kenya and Nigeria, with scope to expand to other regions.
Field will advance on its unique capabilities within complex distribution channels to create an accelerated route to market for emerging therapies and technologies.
This is to include an extensive digitisation overhaul for private healthcare providers, hospitals and healthcare bodies at State and Federal level, with financing options to strengthen operations and purchasing capabilities.
Additionally, healthcare providers stand to benefit from last-mile delivery to improve day-to-day health services and the installation of pharma-grade refrigerators.
In its entirety, the service will be reinforced by the establishment of a coalition to include governments, manufacturers and other key stakeholders for one of the continent’s most ambitious maternal health programs to-date.
Maternal mortality is one of the continent’s most pressing healthcare challenges. The likelihood that a woman will die in childbirth in Africa is 45x higher than in Europe.
According to the World Health Organisation (WHO), Africa accounted for 69% of global maternal deaths, with Nigeria alone representing 29% of all maternal deaths worldwide in 2020.
Field’s service will provide expectant mothers in Africa access to emerging therapies such as heat-stable carbetocin and calibrated drapes, which detect and treat postpartum haemorrhage, the leading cause of maternal mortality in Africa. The platform will accelerate these new interventions, support established therapies, and address related complications like preeclampsia.
The consequences of poor or non-existent maternal health services will affect the most vulnerable sections of Africa’s population. Speaking on the initiative, Michael Moreland, CEO & Founder of Field, says, “This is public health powered by technology and today’s news recognises the products and services that Field has built over the past eight years scaled and integrated into large-scale public health programs; this is what we believe health technology companies should be doing; joining innovative, impactful coalitions between private and public entities”.
“Digitally powering, networking, and financing health systems at scale will have an overwhelmingly positive effect on access to quality care. With funding from the Bill & Melinda Gates Foundation we are set to rapidly improve mother and child survival in every setting .’’
A number of global pharma and health companies have exited the continent in the past 18 months. Moreland adds, “We’ve seen genuine, meaningful gains being made in healthcare delivery outcomes, however in this current tough economic climate, without coordinated systems and processes, the progress will slow or slip.
Alongside our funders, our role is to ensure this doesn’t happen because the problems the healthcare space is facing will not be solved on its own. This is where Field, and its funders, come in and we’re excited to get to work on this technology-powered infrastructure blueprint for public health services”.
In addition to this new initiative, Field continues to grow and scale its technology solutions across the continent. In Field Supply, it has created the largest pharmaceutical supply chain platform in Africa.
Its distribution service Shelf Life distributes over 3,000 quality products across more than 50 therapeutic areas, reaching over 2,500 pharmacies and hospitals in 24 cities in Nigeria and Kenya, including government facilities, large hospital systems, retail chains, insurance companies and family-operated drug stores.
The platform also provides trade financing solutions for priority therapies and equipment that addresses working capital constraints that often hinder investment in new medical interventions.
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