Nigerian banks have been undergoing a structural shift in their business models since 2013 – the first full year since the end of bad debt sales to the Asset Management Corporation of Nigeria (AMCON). The new rules issued that year have significantly affected traditional sources of profit for commercial banks, including net interest margins and fee revenues, and are...
Articles & Analysis | A policy shift brings new challenges to profitability in Nigeria's banking sector from The Report: Nigeria 2015
Interviews & Viewpoints | Daniel Monehin, Division President, Sub-Saharan Africa, MasterCard: Interview from The Report: Nigeria 2015
Articles & Analysis | As Nigeria's banks build their risk assets, new data on customers may help rejuvenate lending from The Report: Nigeria 2015
With regulatory reforms threatening to curb banks’ traditional sources of profit, lenders will need to create risk assets to maintain and expand their margins. Chief among these will be lending to retail customers and small and medium-sized enterprises (SMEs), which carry significantly higher interest rates than the limited and heavily banked blue-chip corporate market....
Articles & Analysis | The government launches new efforts to boost access to mortgages for the middle class from The Report: Nigeria 2015
Despite a housing gap estimated at 17m units, the provision of affordable long-term financing has remained virtually non-existent. By 2013 there were a mere 20,000 mortgages outstanding, according to the Ministry of Finance (MoF), at best-case interest rates of 19% over 10 years. In parallel to government efforts to promote the construction of more affordable housing,...
Interviews & Viewpoints | Godwin Emefiele, Governor, Central Bank of Nigeria (CBN), on the bank’s role in driving growth in specific sectors: Viewpoint from The Report: Nigeria 2015
For some time, the dominant school of thought regarding central banking was that focusing on low inflation will eventually lead to greater growth, an increase in employment-generating activities and poverty reduction. However, early and recent evidence of central banking in places such as the US, the UK, Japan and France indicates that supporting selected economic...
Articles & Analysis | New owners of privatised electricity assets seek to meet arrears and fund their expansion from The Report: Nigeria 2015
The final transfer of privatised electricity assets to successful bidders in November 2013 marked a key moment in demonstrating that Nigerian banks can provide significant long-term funding to a structurally important sector. The acquisitions were financed primarily through debt, while international investors and banks largely stayed on the sidelines. Indeed, of the more...