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IFC partners FCMB Bank to Develop Smaller Businesses in Nigeria

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IFC, a member of the World Bank Group, has announced an $87.5 million loan to Nigerian bank FCMB that will help fund infrastructure, green energy projects, and strengthen smaller businesses in the country, spurring job creation and economic growth. 

The loan consists of $50 million from IFC’s own account and $37.5 million from IFC through the Managed Co-lending Portfolio Program (MCPP), a new IFC product that allows investors the opportunity to contribute to development by participating in IFC’s loan portfolio. 

The facility will fund FCMB’s infrastructure projects and includes IFC’s first energy efficiency and renewable energy (green energy) lending facility in Nigeria, along with financing for smaller businesses. Eligible projects in the green energy component include technical upgrades that improve efficiency and productivity in industrial processes, as well as investments that generate electricity from renewable energy resources.

Ladi Balogun, group managing director/ chief executive officer, FCMB Bank, said: “The loan will be largely dedicated to funding infrastructural development, and the growth of small & medium enterprise (SME) portfolio, while a portion will also be used for energy efficiency and renewable energy finance. Partnering with IFC will help us tap into IFC’s global expertise to help finance cost-efficient and cleaner energy solutions in Nigeria, increase access to finance for more SMEs, and further strengthen our infrastructure portfolio.

Solomon Adegbie-Quaynor, IFC country manager for Nigeria, said: “One of IFC’s key priorities in Nigeria is strengthening the country’s infrastructure, especially power, so homes and businesses can benefit from lower costs and more reliable power supply. Our partnership with FCMB aims to boost private investment in infrastructure and green energy projects, helping businesses become more productive and competitive. The overall goal is to increase employment opportunities and economic growth.”

The World Bank has identified a lack of reliable power-generating capacity as a major constraint to economic development in Africa, including in Nigeria, where millions face limited access to electricity.

IFC’s strategy for Nigeria is to support infrastructure development and increase access to finance for small and medium enterprises which are important job generators and engines of economic growth. 


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E-Financial

CBN Permits BDC Operators to Buy FX from NAFEM During Festive Season

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Central Bank of Nigeria (CBN) has announced that eligible Bureau de Change (BDC) operators will have temporary access to the Nigerian Autonomous Foreign Exchange Market (NAFEM) to purchase $25,000 weekly. This arrangement, aimed at addressing seasonal foreign exchange (FX) demand, will be effective from December 19, 2024, to January 30, 2025.

In a statement signed by T.G. Allu, CBN’s acting director of trade and exchange, the apex bank said BDC operators would buy FX from authorized dealers—banks licensed by the CBN—exclusively to meet retail market demand.

“To meet expected seasonal demand for foreign exchange, the CBN is allowing temporary access for all existing BDCs to the NAFEM for the purchase of FX from Authorized Dealers, subject to a weekly cap of $25,000,” the statement read.

BDC operators must fully fund their accounts before accessing the market at prevailing NAFEM rates, choosing only one authorized dealer for transactions under this arrangement. A maximum price spread of 1% is allowed for retail pricing by BDCs, and all transactions will be reported to the CBN’s Trade and Exchange Department.

The CBN reiterated that personal travel allowance (PTA) and business travel allowance (BTA) remain available through banks for legitimate travel needs. The bank emphasized that all FX transactions must be conducted at market-determined exchange rates.

“The CBN remains committed to a fully functional foreign exchange market and will continue to provide liquidity when necessary to manage price volatility,” the statement added.

Earlier in September, the CBN approved FX sales to eligible BDC operators at a rate of N1,590 per dollar to cater to demand for invisible transactions, reflecting ongoing efforts to stabilize the FX market.


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Diaspora Remittances to Nigeria Reach $4.22 Billion in 2024, Says CBN

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Central Bank of Nigeria (CBN) has announced that diaspora remittances through international money transfer operators (IMTOs) reached $4.22 billion between January and October 2024.

This figure represents a 61 percent increase, or $2.62 billion more than the amount recorded during the same period in 2023.

CBN Governor Olayemi Cardoso shared the figures during an interactive session with the Senate Committee on Banking, Insurance, and Other Financial Institutions at the National Assembly on Wednesday. “The year-on-year increase reflects significant growth,” Cardoso noted.

He also reported that remittances rose from $336 million in September 2024 to $402 million in October 2024 on a month-to-month basis.

Cardoso expressed optimism about continued growth in remittance inflows, saying, “The remittance inflows would continue to rise by the end of the year, given the current trajectory.”

He attributed the surge to improved efficiency in the remittance system, the positive effects of President Bola Tinubu’s policies, and increased trust among Nigerians in the diaspora to contribute to national development.

In addition to remittance updates, Cardoso addressed the state of Nigeria’s external reserves, which he said had grown to $42.01 billion as of December 12, 2024, from $38.35 billion on September 30, 2024.

“External reserves rose largely due to receipts from crude oil-related taxes and third-party receipts in Q3 2024,” he explained.

He added that Nigeria’s external reserves could fund over nine months of goods and services imports, surpassing the international benchmark of three months. “Our external reserves level is a robust buffer against shocks,” Cardoso said.

On the issue of cash shortages, the CBN governor reiterated the enforcement of the new policy imposing a fine of N150 million on any bank branch found distributing new naira notes illegally to currency hawkers.

Cardoso also shared his outlook for the Nigerian economy in 2025. “Distinguished Senators, as we conclude this briefing, I want to highlight that despite the challenges facing our economy, there are clear reasons for optimism,” he said.

“The gradual stabilisation of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”

This comes as the CBN continues to implement measures to strengthen the economy. On October 17, the apex bank reported that remittance inflows had risen to almost $600 million by the end of September, while on June 25, it granted eligible IMTOs access to trade on the official FX window.

 


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Fraud in Bank Branches Surges by 31 Percent in Q2 — FITC

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The Nigerian banking sector has witnessed a concerning rise in fraudulent activities, with incidents of fraud in bank branches increasing by 31 percent in the second quarter of 2024.

Fraud in Bank Branches Surges by 31 Percent in Q2 — FITC

This alarming statistic was disclosed by the Financial Institutions Training Centre (FITC) in its Fraud and Forgeries report, highlighting significant challenges to the integrity of the country’s financial system.

Fraudulent activities in Nigerian banks led to a staggering N42.33 billion in reported losses during the first half of 2024.

This sharp rise was driven by escalating fraud across multiple channels, most notably within physical bank branches.

The FITC report revealed that fraud in bank branches rose dramatically to N42.2 billion in the second quarter, compared to N133.9 million in the first quarter.

The FITC data also pointed to a massive 1,560.3 percent increase in computer and web fraud. Losses in this category surged from N24 million in the first quarter to N400.8 million in the second quarter.

In contrast, mobile fraud witnessed a significant decline, dropping by 59 percent from N216.4 million in the first quarter to N88.7 million in the second quarter.

Interestingly, no cases of ATM-related fraud were recorded during the period under review.

The figures also indicate a shift in fraudulent activities involving various financial instruments. Card fraud saw a notable decline of 47.66 percent, with cases dropping from 21,469 in the first quarter to 11,231 in the second quarter. Conversely, cheque-related fraud rose by 36.67 percent, increasing from 30 cases in the first quarter to 41 in the second quarter.

Mobile fraud recorded an even steeper decline in value terms, dropping by 99 percent from N21.6 billion in the first quarter to N216.36 million in the second quarter.

These figures suggest evolving strategies among fraudsters, with some methods becoming less prevalent while others gain traction.

Amid the rising tide of fraud, legal actions have also intensified. In one notable case, an Abuja Federal High Court issued a 30-day freeze on 818 bank accounts linked to a N10 billion cyberattack on a Nigerian bank.

The court’s directive, issued on October 15, 2024, was based on a motion filed by the police against James Akagwu Isaac and other suspects, including several financial institutions.

Analysts say the surge in fraudulent activities underscores the urgent need for heightened vigilance, enhanced security measures, and robust regulatory interventions in Nigeria’s banking sector.

While the decline in some fraud categories, such as mobile and card fraud, offers a glimmer of hope, the sharp rise in branch-based and web-related fraud highlights the evolving tactics of fraudsters.

To combat these threats effectively, experts recommend that banks must invest in advanced fraud detection systems, conduct regular staff training, and strengthen internal controls.

Collaboration between financial institutions, law enforcement agencies, and regulators will also be crucial in mitigating the impact of fraud and safeguarding the financial ecosystem.

The FITC report serves as a stark reminder of the vulnerabilities within the banking sector and the need for proactive measures to address them. Without sustained efforts, the rising trend of fraud could pose significant risks to Nigeria’s economic stability and the trust of consumers in the financial system.

 

 

Credit: Tribune


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