The Central Bank of Nigeria (CBN) has charged finance houses to maximise opportunities offered in the revised guidelines to expand their scope of business and increase their contribution to economic growth.
Deputy Governor, Financial Sector Surveillance, FSS, CBN, Mrs Aishah Ahmad, gave this charge in a keynote addressing at the biannual conference of Finance Houses Association of Nigeria (FHAN).
The Central Bank of Nigeria head office in Abuja. She said that while the subsector has made some progress as evident in increased shareholders’ funds and risk assets, operators are barely scratching the surface in terms of large untapped market available to them.
Represented by the Director, Other Financial Institution Supervision Department (OFISD), Mrs Tokunbo Phillips, Ahmad stated: “This is a subsector that has great potentials and by extension responsibility to stimulate growth of the Nigerian economy. “The theme of the conference, which is, Access to Finance: Exploring opportunities and navigating the landmines for local and foreign institutional debt, couldn’t have come at a better time.
“This is because the sector is yet to realise its full potential because it is leaving out so much of the various things it could have done in terms of permissible activities documented in the revised guidelines for finance companies. “For instance the industry is limiting itself to consumer loans, funds management and in some cases leasing. “A notable feature of the revised guidelines for finance companies was the introduction of section 11.1 which grants express eligibility to access various schemes and intervention funds of the CBN, governments and other agencies aimed at boosting funding access for the micro small and medium enterprises (MSMEs) sector including SME Credit Guarantee Scheme, MSME Development Fund, NIRSAL.
“Despite these measures there is no gainsaying that the finance company sector is yet to meet these regulatory expectations. In December 2013 the subsector recorded sums of N18 billion and N46 billion as shareholders funds and risk assets respectively. “As at September 2018, these have increased by 60 percent and 222 percent to N29 billion and N154 billion respectively. I must commend you for that effort, but there is still so much more that needs to be done. You have barely scratched the surface considering the large untapped market and so there is a need for the subsector to do much more.”