Federal Government will support SMEs, says Osinbajo
Vice President Prof Yemi Osinbajo has reinstated the commitment of the President Muhammadu Buhari’s led administration to support the Small and Medium Scale Enterprises (SMEs) in Abia and other states of the federation to grow the country’s economy.
He stated this while flagging off the Nationwide Micro, Small and Medium Enterprise Clinics for Viable Enterprises (MSME) in Aba, the commercial hub of Abia State.
The vice president who described the SMEs as the highest employers of labour and engine house of every great nation’s economy, said President Buhari has great interest in the growth of the SMEs and stressed that it is the intention of the administration to make the industry compete favourably and even surpass their counterparts at the global stage.
AfDB approves $20m for project finance
The African Development Bank (AfDB) is granting $20 million soft commodity finance facility for the development of Malawi, Zimbabwe and Mozambique.
Specifically, the facility will be used to provide funding to purchase farm inputs (mainly fertilizer) to be supplied to farmers so as to ensure consistency and quality of the commodities being supplied to Meridian; purchase of soft commodities from over 10,000 farmers in Malawi, Zimbabwe and Mozambique; and, upon purchase of the soft commodities, provide working capital to Meridian to enable the company engage in basic processing of the soft commodities prior to export.
It will enable the bank to reach small-scale farmers indirectly through a regional aggregator (Meridian) that understands the market in which it has accumulated a 40-year track record; understands the operational risks and is able to mitigate and manage them.
Why we launched N1b MSMEs’ solar energy fund, by BoI
The Bank of Industry (BoI) launched the N1billion solar energy fund for the Micro, Small and Medium Enterprises (MSMEs) because of the power challenge in the sector, its Acting Managing Director, Mr. Waheed Olagunju, has said.
Speaking at the launch in Lagos, Olagunju said solar energy had become alternative for the MSME operators in view of the poor supply in the country.
The cost of electricity accounts for about 40 per cent of operational expenses for most MSMEs, resulting in reduced profit margins and unsustainable ventures.
Olagunju said: “Many Nigerians and Nigerian businesses that can afford other alternative energy sources have resorted to the use of electric generators at exorbitant costs. It was estimated that in 2015, manufacturers spent as much as N3.5trillion to generate alternative power due to the challenges in the supply of public electricity.
Banks’ bad loans hit N856.9b
Banks’ assets have depreciated in the last two years, with provisions for Non Performing Loans (NPLs) hitting N856.9 billion, a financial market report has said.
The report by the investment and research firm Afrinvest West Africa Plc was released yesterday. It said provisioning for the NPLs, which rose 3.1 times from N280.4 billion in December 2014 to N856.9 billion last August, trimmed qualifying capital for mid to small-sized banks. The high concentration of forex denominated loans has nominally increased risk weighted assets following pressure on forex rate, it said.
The report titled: “The Nigerian Economy and Financial Market 2016 Review and 2017 Outlook: Reform or be Relegated”, attributed the rise in NPL to foreign exchange (forex) crisis, low oil prices, which fell below trend production volumes and tight monetary policy, which plunged the economy into recession while the asset quality of banks has sharply deteriorated.
These, the report said, were at the heart of a slow-burning solvency and liquidity crisis in the financial sector.
Mortgage financing for affordable housing
Adequate and affordable housing provision has over the years engaged the attention of most countries, especially the developing ones, given that it is one of the three most important basic needs of mankind–others being food and clothing.
But at the centre of providing affordable housing are developers, who need adequate finance to execute housing projects. However, a major area of concern has been mortgage financing, which has often been fingered as one of the most formidable constraints in the housing sector.
But the introduction of Family Homes Fund by the Federal Ministry of Finance was expected to help the country wriggle out of rising housing deficits. The fund, an innovative private sector- driven financing solution was meant to bridge the rising housing deficits in the country.
Mortgages under the scheme will be provided through Primary Mortgage Institutions and refinanced by the Nigeria Mortgage Refinance Company (NMRC). Interest rate of 9.99 per cent is applicable to the first N2.5 million only.
FMBN signs $2b MoU with Shelter Afrique, REDAN
The Federal Mortgage Bank of Nigeria (FMBN) has signed a $2billion tripartite Memorandum of Understanding with Shelter Afrique, and Real Estate Developers Association of Nigeria (REDAN).
The agreement, which was signed at the weekend, involves a commitment by Shelter Afrique to avail the sector of $2billion construction finance towards housing provision in Nigeria.
The Acting Managing Director of the Federal Mortgage Bank of Nigeria, Mr. Richard Esin, said the collaboration was a “proactive step taken in recognition of the opportunities that would arise from the launch of a National Housing Model.