Sequel to the wind that blew through the Nigerian Banking landscape during the President Obasanjo Administration under his Banking Consolidation (Reform) programme, hopes were very high in expectation of wonderful financial products that will sail the Nigerian economy into the much desired double digit growth in all of its ramifications.
Scaling the banks to 25 Mega Banks, Creating a new brand for the community banks to become Micro-finance Banks, Removing Quarckry from the Foreign Exchange sector, Increasing Bank 's Minimum Capital base, expanded foreign reserve, scheduled currency re-denomination, among other strategies were in the fore to tackle Nigeria's ailing economy.
Accolades from the world, canceled debt, improved global confidence, direct foreign investment, increased development aid and so on also greeted the numerous moves.
Further, increased capital base translated to better liquidity for banks' money creation function through business financing. Extraction of government fund from banks, mopping-up excess liquidity, etc also gave birth to reduced inflation and vibrancy in the real productive sectors.
In the early parts of this year however, quite a number of disturbing developments have emerged. Notable among them is the unfriendly lending rate. when the banks are ready to give the facility usually after requesting documents they do not expect 98% of the business to have, the rates usually in double digits for short term (below one year) and accompanied with numerous hidden charges that are only made known after the borrower has been committed are then reeled out.
Another issue is the granting of equipment financing facilities. Rather than help the real sector to acquire productive equipment that will yield returns on investments, the Nigerian MEGA BANKS will give facilities to Blue chip workers-oil companies, telecommunications, and politicians, whose pay package they are sure can liquidate the facility (maybe its risk assurance).
Most disturbing is the granting of EDUCATION LOANS, good idea! it sounds like a new lease of life is given the less privileged to acquire education and break the cycle of poverty, but hey! do not be fooled. When you get to know that the birth certificate of your great,great,grand parents will be required including sureties from the presidency, then you will find out its impossible for the poor to get. Disgusting also to find out that it is meant for only over-seas studies (until recently when it was changed), meaning there are no schools in Nigeria any longer or its another way to tell that its a product meant only for the upper class.
The questions begging for answers therefore are:
Scaling the banks to 25 Mega Banks, Creating a new brand for the community banks to become Micro-finance Banks, Removing Quarckry from the Foreign Exchange sector, Increasing Bank 's Minimum Capital base, expanded foreign reserve, scheduled currency re-denomination, among other strategies were in the fore to tackle Nigeria's ailing economy.
Accolades from the world, canceled debt, improved global confidence, direct foreign investment, increased development aid and so on also greeted the numerous moves.
Further, increased capital base translated to better liquidity for banks' money creation function through business financing. Extraction of government fund from banks, mopping-up excess liquidity, etc also gave birth to reduced inflation and vibrancy in the real productive sectors.
In the early parts of this year however, quite a number of disturbing developments have emerged. Notable among them is the unfriendly lending rate. when the banks are ready to give the facility usually after requesting documents they do not expect 98% of the business to have, the rates usually in double digits for short term (below one year) and accompanied with numerous hidden charges that are only made known after the borrower has been committed are then reeled out.
Another issue is the granting of equipment financing facilities. Rather than help the real sector to acquire productive equipment that will yield returns on investments, the Nigerian MEGA BANKS will give facilities to Blue chip workers-oil companies, telecommunications, and politicians, whose pay package they are sure can liquidate the facility (maybe its risk assurance).
Most disturbing is the granting of EDUCATION LOANS, good idea! it sounds like a new lease of life is given the less privileged to acquire education and break the cycle of poverty, but hey! do not be fooled. When you get to know that the birth certificate of your great,great,grand parents will be required including sureties from the presidency, then you will find out its impossible for the poor to get. Disgusting also to find out that it is meant for only over-seas studies (until recently when it was changed), meaning there are no schools in Nigeria any longer or its another way to tell that its a product meant only for the upper class.
The questions begging for answers therefore are:
- would the Nigerian financial sector ever get better and her impact felt on the economy?
- would the poor ever have hope of deliverance from abject poverty amidst plenty?
- would the SMEs ever get: a) access to loans? b) a fair deal?
- where is the place of social responsibility in product design and delivery?
- is that why graduates of Nigerian universities have now been included in the discrimination against polytechnic graduates by employers (particularly the banks-predominantly new generation)?
someone should please answer these questions. Perhaps there is more to it than I see.
Aileon
Aileon
Posts
1 comment:
Nigeria's financial sector can get better and her impact can be felt on the economy; all it will take is an ethical revolution and a major paradigm shift by all stake holders in the sector.
There is hope for the poor; the poor can be delivered from abject poverty, if they work harder and develop a positive attitude, poverty is not in how little a man has in his bank account; but how small he thinks of himself.
The SMEs can get access to loans at fair deals when an ethical revolution occurs; and the govt can also help by putting pep on the SME loan scheme it once advocated in the late '80s
Post a Comment