Paylink

Paylink partners Google to train 15,000 MSMEs in Nigeria

by with No Comment BusinessNews

To help Micro, Small and Medium Enterprises recover from the impacts of COVID-19 and reposition them to take advantage of opportunities of a post-COVID future, Paylink, a payment and ecommerce solution for individuals, businesses and non-profits, has partnered with tech giant, Google.

READ ALSO: Elumelu advocates strategic long-term investment to tackle poverty in Africa

The partnership is particularly geared towards empowering MSMEs with the digital expertise they require to thrive through the Paylink MSME Digital Bootcamp.

The organiser of the bootcamp, SystemSpecs, providers of Paylink, made this disclosure during the formal announcement of the expression of participation to MSMEs across Nigeria for the free seminar supported by Google.

Through a series of online trainings, MSMEs in Nigeria will be equipped with the relevant digital skills necessary to drive and scale their businesses in the digital era, recover from the impacts of the coronavirus pandemic, as well as sustain their business on a long term.

As a developing country, MSMEs form the bedrock of enterprise and employment in Nigeria.

A statement by the Ministry of Trade and Investment says Nigeria’s over 37.07 million MSMEs account for more than 84 per cent jobs in the country.

MSMEs also account for about 48.5 per cent of the gross domestic product as well as about 7.27 per cent of goods and services exported out of the country.

The Ministry of Trade and Investment further stated that micro-enterprises, which are the smallest businesses, account for the bulk of the MSMEs in Nigeria with 36,994,578 enterprises (about 99.8 per cent).

Commenting on the partnership, SystemSpecs’ Executive Director, Corporate Strategy, ‘Deremi Atanda, said: “With more than 41 million MSMEs spread across the length and breadth of the country, it is clear that if these enterprises are empowered to attain their true potentials, they would significantly impact all strata of our economy and society at large.

“This is one of the reasons we have partnered with Google, a reputable organisation that deals with businesses across various segments of the Nigerian marketplace, to equip enterprises in the micro, small and medium-scale cadre with key requirements to thrive in a post-COVID economy.

“It is our conviction that MSMEs are an essential stakeholder group in the Nigerian project and we are committed to advancing their causes.”

Covering themes that include brand building, business growth and tools for business management and to hold on selected days in the months of March, April and May, 2021, the training leverages Google’s Digital Skills Africa programme for existing and prospective Paylink subscribers.

“COVID-19 forced many businesses to re-think their strategies and challenged long-standing entrepreneurial approaches. Among others, it brought forth the need to adopt a digital-first strategy in order to reach an extensive and largely unexplored market and ultimately grow bottom-line,” said Google Nigeria’s Country Director, Juliet Ehimuan.

“While a number of MSMEs are aware of this progressive direction, many are not. As with our other trainings, partnering with SystemSpecs to train current and prospective Paylink customers will go a long way in empowering more stakeholders in Nigeria’s MSMEs space,” Ehimuan added.

Paylink.NG is a secure and seamless solution that helps individuals, MSMEs, religious organisations, not-for-profits, social media sellers, crowd funders, event planners, freelancers and others, to receive payments through multiple means, by sharing a customised link.

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Nigerias Inflation Rate

More pain for Nigerians as inflation hits 4-yr high

by with No Comment BusinessfinanceNews

Headline inflation rate jumped to a four-year high at 17.33 percent in February, from 16.47 percent in January 2021, according to a report released by the National Bureau of Statistics.

Nigerians cannot afford to buy as much as they used to as food costs continue to surge, aggravating the pains already inflicted by the pandemic and economic slowdown.

READ ALSO: DMO lists N162.5bn 7-year Sovereign Sukuk on Nigerian Exchange Limited

Headline inflation rate jumped to a four-year high at 17.33 percent in February, from 16.47 percent in January 2021, according to a report released by the National Bureau of Statistics. On year-on-year basis, this is the highest since February 2017.

This signals a decline in purchasing power of Nigerians as prices of goods and services are skyrocketing without a corresponding increase in income, making life miserable for the country’s population.

“The increase is obviously as a result of a surge in food cost which mainly comprises of imported food,” Ayodeji Ebo, Head Retail Investment, Chapel Hill Denham, points out.

Food inflation rose by 21.8 percent month-on-month in February compared to 20.57 percent in January 2021.

Data from NBS shows Nigeria’s import of food and beverages jumped 70.7 percent to N2.8 billion in 2020 from N1.64 billion in 2019.

“This means we still import a lot indicating that there are opportunities to produce more, generate employment and reduce demand for foreign goods which keeps prices increasing,” Ebo said.

The increased importation is also pointer to Nigeria’s failed border closure policy which kicked off as a strategy to boost local production.

The situation of Nigerians is worsened by the 23 million without jobs and another 15.9 million worked less than 40 hours a week, making them underemployed, according to the NBS.

To put in perspective, Nigeria’s total number of jobless people is equal to the entire population of Niger.

Nigeria’s Per Capita GDP which has been contracting for six straight years also gives a dim picture of untold hardship facing many businesses and household.

By Businessday’s analysis, Nigeria recorded Per Capita GDP growth of -4.57 percent in 2020, its worst contraction in more than six years.

In basic interpretation, this means an average Nigeria has a lower standard of living in 2020 than in the past six years.

A 2018 report by the Brookings Institution situated the country as the poverty capital of the world with 87 million people or roughly 40 percent of Nigeria’s 200 million populations living below $1.9 a day.

As a result of the pandemic, another 15 to 20 million Nigerians will be dragged into poverty by 2022, the World Bank estimates.

Analysts say Nigeria will continue to see an upward trend in the inflation rate in the coming months if certain factors persist.

Temitope Omosuyi an Investment Strategy Analyst at Afrinvest Limited said Nigeria’s headline inflation rate would hit 18.15 percent in March driven by foreign exchange illiquidity and heightened insecurity in the North.

There have been a number violent farm attacks, and clashes between herders and farmers in recent times and this would continue to weigh on food supply.

Also, inflationary pressures will also mount if the price of petrol rises higher.

The Petroleum Products Pricing Regulatory Agency (PPPRA) announced a new price template that put the retail price for the product at between N209.61 and N212.61. However, the agency has since retracted the statement while the NNPC has reiterated that there would no price increase in March.

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Mobile Money Business

The Rise Fund to Invest $200m in Airtel Africa’s Mobile Money Business at $2.65bn Valuation

by with No Comment BusinessNews

Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, today announces the signing of an agreement under which The Rise Fund, the global impact investing platform of leading alternative investment firm TPG, will invest $200 million in Airtel Mobile Commerce BV (“AMC BV”), a wholly owned subsidiary of Airtel Africa plc (the “Transaction”). AMC BV is currently the holding company for several of Airtel Africa’s mobile money operations; and is now intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.

READ ALSO: Registration for Auto Revamp Training Program

The Transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis.

The Rise Fund will hold a minority stake in AMC BV upon completion of the Transaction, with Airtel Africa continuing to hold the remaining majority stake.

The Transaction is subject to customary closing conditions including necessary regulatory filings and approvals, as necessary, and the inclusion of specified mobile money business assets and contracts into AMC BV.

The Transaction is the latest step in the Group’s pursuit of strategic asset monetization and investment opportunities, and it is the aim of Airtel Africa to explore the potential listing of the mobile money business within four years.

The Group is in discussions with other potential investors in relation to possible further minority investments into Airtel Money, up to a total of 25% of the issued share capital of AMC BV.

There can be no certainty that a transaction will be concluded or as to the final terms of any transactions.

The proceeds from the Transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.

Airtel Africa Mobile Money Services

Operating under the Airtel Money brand, Airtel Africa’s mobile money services is a leading digital mobile financial services platform catering to a large addressable market in Africa (characterised by limited access to formal financial institutions with limited banking infrastructure) and includes mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual credit card and international money transfers.

Mobile money services are available across the Group’s 14 countries of operation, however in Nigeria the Group offers Airtel Money services through a partnership with a local bank and has applied for its own mobile banking licence.

It is the intention that all mobile money operations will be owned and operated by AMC BV.

In our most recent reported results for Q3, the mobile money service segment (corresponding to all the businesses that are intended to be transferred to AMC BV) delivered a strong operational performance:

  • Generated revenue of $110 million ($440 million annualised), and underlying EBITDA of $54 million ($216 million annualised) at a margin of 48.7%.
  • Year on year revenue growth for the quarter was 41.1% in constant currency, largely driven by 29% growth in the customer base to 21.5 million, and 9.7% ARPU growth.
  • Growth in transaction value was 53.0% to $12.8 billion ($51 billion annualised).

Our mobile money business benefits from strong network presence with our core telecom business through the extensive distribution platform of kiosks and mini shops as well as dedicated Airtel Money branches supplementing our extensive agent network, to facilitate customers’ assured wallet and cash.

We have a clear strategy to continue to drive sustainable long-term growth in Airtel Money with a focus on assured float availability, distribution expansion and increased usage cases for our customers.

In this year alone we have added partnerships with Mastercard, Samsung, Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit to expand both the range and depth of the Airtel Money offerings and to further drive customer growth and penetration.

The profits before tax in the full year ending 31 March 2020 and the value of gross assets as of that date, attributable to the mobile money businesses were $143.4 million and $463.2 million, respectively.

Key Elements of the Transaction

  • Agreement values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis.
  • AMC BV, a wholly owned subsidiary of Airtel Africa, is currently the holding company for several of Airtel Africa’s mobile money operations; and is now intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries once the inclusion of the remaining mobile money operations under AMC BV is completed.
  • A newly incorporated investment vehicle of The Rise Fund will invest $200 million through a secondary purchase of shares in AMC BV from Airtel Africa. The transaction will close in two stages. $150 million will be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC BV has been completed, with $50 million to be invested at second close upon further transfers.
  • Airtel Africa aims to explore the potential listing of the mobile money business within four years. Under the terms of the Transaction, and in very limited circumstances (in the event that there is no Initial Public Offering of shares in AMC BV within four years of first close, or in the event of changes of control without TPG’s prior approval), TPG would have the option, so as to provide liquidity to them, to sell its shares in AMC BV to Airtel Africa or its affiliates at fair market value (determined by a mutually agreed merchant bank using an agreed internationally accepted valuation methodology). The option is subject to a minimum price equal to the consideration paid by The Rise Fund for its investment (less the value of all distributions and any proceeds of sale of its shares, and with no time value of money or minimum return built in) and a maximum number of shares in AMC BV such that the consideration does not exceed $400 million.

The Transaction is expected to reach first close over the next three to four months. From first close The Rise Fund will be entitled to appoint a director to the board of AMC BV and to certain customary information and minority protection rights.

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Tony Elumelu Foundation (TEF)

TEF to prioritise economic recovery of SMEs in 2021

by with No Comment BusinessNews

The Tony Elumelu Foundation (TEF) entrepreneurship programme says the seventh edition will prioritise the economic recovery of small and medium scale enterprises (SMEs) following the global disruptions triggered by the COVID-19 pandemic.

READ ALSO: We want to partner with skilled artisans within Enugu

Somachi Chris-Asoluka, director of partnerships and communications at TEF, who disclosed this, equally wants applicants for the 7th edition of the programme to ensure that their applications reach the foundation before the March 31 deadline. Application for the programme commended on January 1, hosted on the Tefconnect digital platform (www.tefconnect.com)

According to Chris-Asoluka, entrepreneurs’ full participation would create a pathway to economic prosperity.

“This year, we have the capacity to empower more African entrepreneurs than ever, further ensuring that they have adequate training, funding, and mentorship to boost their performance.

It is time for young African entrepreneurs to embrace this much-needed support system to enable thriving and sustainable economic activity. We believe we will continue to see an exponential change in sectors across the continent,” she said.

Chris-Asoluka said that the programme would empower over 3,500 young African entrepreneurs in collaboration with global partners in order to address the challenges arising from the pandemic, adding that the goal was to lift millions out of poverty and create sustainable employment across the continent.

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USSD

N42bn debt: Reps ask telcos to halt planned suspension of USSD services

by with No Comment financeNews

The House of Representatives on Tuesday urged telecommunication operators in the country to halt the planned withdrawal and suspension of Unstructured Supplementary Service Data (USSD) services to banks and other financial institutions.

READ ALSO: Guinness, other stocks drive NSE ASI high by 0.41%

The Association of Licensed Telecommunications Operators of Nigeria had threatened to disconnect financial service providers from USSD from Monday, March 15, 2021 until the concerned institutions pay the over N42 billion debt they owe the telcos.

But the House, while adopting a motion of urgent public importance sponsored by Nicholas Ossai (PDP, Delta) at plenary, mandated the Committee on Telecommunications to liaise with telecommunications operators, Nigerian Communications Commission (NCC), Central Bank of Nigeria (CBN) and Nigerian banks and other financial institutions with a view to resolving the impasse and report back to the House within six weeks for further legislative action.

Moving the motion, Ossai noted that the CBN, in a bid to realise one of its statutory mandates of promoting monetary stability and a sound financial system in Nigeria, designed a cashless policy that would provide innovations, easy mobile payment, cost reduction and convenient financial services to millions of Nigerians living in urban and rural areas.

He said one of the innovations introduced is the USSD services which is used by Global System for Mobile Communication Technology to communicate with their service providers’ computers via text messages to check account balance or mobile airtime, generate bank statement or do fund transfer and data balance enquiries or to receive one-time passwords or pin codes.

The lawmaker further noted that the USSD service which is controlled by Mobile Network Operators is a critical infrastructure used to provide mobile financial services to banks and other financial institutions in cell phones at very low cost, without requiring access to the user’s SIM card.

Ossai said the USSD infrastructure service houses all the Nigeria telecommunications operators – MTN, Glo, Airtel & 9Mobile – and internet service providers.

He observed that the USSD made it possible for millions of Nigerians who do not have smartphones or data/internet connections to access banking and other financial services on a daily basis, especially during the COVID-19 movement restrictions.

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Inflation

Inflation rate quickens to 48-month high…

by with No Comment financeNews

On the back of surging food prices, Nigeria’s February inflation rate accelerated by 17.33 percent, a 0.86 percent point increase from 16.47 percent in January 2021, according to a report released by the National Bureau of Statistics.

READ ALSO: Customers to pay N6.98k per transaction for USSD services

From BusinessDay analysis, inflation rate has been rising for 18 straight months and it is at the highest in 48 months.

The report showed that inflation rose month-on-month by 1.54 percent, which is 0.05 percentage points higher than 1.49 percent recorded in January.

Food inflation rose by 21.79 percent month-on-month compared to 20.57 percent in January 2021.

The major drivers of the rise in Nigeria’s food index are bread, cereal, meat, fruits, vegetables, oil & fat, potatoes, fish, yam and other tubers.

Core inflation, which excludes the prices of volatile agricultural produce stood at 12.38 percent month-on-month, up 0.53 percent compared to 11.85 percent in January 2021.

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USSD

Customers to pay N6.98k per transaction for USSD services

by with No Comment financeNews

Effective March 16, 2021, Nigerian bank customers will pay N6.98k per transaction for Unstructured Supplementary Service Data (USSD) services, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) said after a joint meeting on Tuesday.

READ ALSO: MTN Nigeria, Ajua launch digital eCommerce mobile app to support SMEs

The new fee replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.

USSD is a critical channel for delivering financial services, particularly for the underserved and/or financially excluded.

A joint statement signed by Osita Nwanisobi, acting director, corporate communications department of the CBN, and Ikechukwu Adinde, director, public affairs, NCC, said this approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions.

This resulted in the accumulation of outstanding fees for USSD services rendered, leading to potential service withdrawal by the MNOs.

The new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. This is to promote transparency in administration.

Banks are not to impose additional charges on customers for use of the channel, the statement said.

A statement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.

The MNOs and the deposit money banks are to discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (API) to enable seamless, direct and transparent customer billing.

“Banks and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services. With the above resolutions, the impending suspension of banks from the USSD channel is hereby vacated. Therefore, banks shall no longer be disconnected from the USSD channel,” the statement said.

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Osun SME

Bank of Industry: Osun Government Partners to Train 2000+ Youths

by with No Comment BusinessNews

In a bid to further cushion the effect of COVID-19 and provide jobs in the country, the Osun State Government and Bank of Industry have trained over 2,000 youths on entrepreneurship.

READ ALSO: Inflation Expected to Spike Further

The programme is tagged: the Post COVID-19 Economic Strategy Training.

The Governor of Osun State, Adegboyega Oyetola, who presented certificates to the first batch of the participants of the programme at the Multi-purpose Hall, Local Government Service Commission, Abere, Osogbo, acknowledged the support of the Bank of Industry in providing jobs for the youths.

According to the Governor, the Skills Upgrade and Entrepreneurship Training Programme was designed to generate 15,000 direct and indirect sustainable job opportunities annually.

He noted that the programme was designed to provide participants who were adversely affected by the COVID-19 pandemic with skills upgrade training to make them relevant in the changing economic landscape. The aftermath of the COVID-19 pandemic.

“Under the Skills Upgrade Training Programme, we were able to re-focus, re-engineer and expand the scope, knowledge and relevance of artisans and people who lost their jobs to make them relevant under the new normal orchestrated by COVID-19.”

The Executive Director, Micro Enterprise, Bank of Industry, Mrs Toyin Adeniji, commended the administration of Governor Oyetola for building a virile and healthy economy for the Osun State.

Mrs Adeniji, while expressing satisfaction with the timely and prompt cooperation and support received from the government, promised BOI’s continued support to the Osun state in its relentless efforts to grow her economy.

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56294-proshare

Inflation Expected to Spike Further

by with No Comment financeNews

Economic data inflation continued to be mixed and driven by the impact of lockdowns in different countries.

U.S. initial jobless claims rose early in February, but fell back later in the month, with retail spending increasing the most in almost half a year.

READ ALSO: Coronation Merchant Bank records 15% PBT growth in 2020

UK retail spending saw its largest drop since spring of 2020 due to the lockdown, but forward-looking PMI indicators skewed surprisingly to the upside. In Q4 2020, U.S. GDP recorded a solid growth of 4.1%, while the U.K.’s GDP growth was also positive at 1.0%. However, the Eurozone contracted by -0.6%.

Among major developed countries, the UK continued to lead on vaccine roll-out, with a majority of the most vulnerable population having received their first shot by the end of February 2021.

The US was catching up fast, while the EU remained far behind. Interestingly, new studies provided evidence of high levels of protection against severe cases after just a single dose of the vaccine.

Global COVID-19 cases saw a massive decline over the month, which led to tentative easing of restrictions in some U.S. states, while the UK announced a cautious phased-in reopening plan starting in March 2021. Likewise, Japan started to lift the state of emergency in some prefectures.

The U.S. experienced devastating winter storms that led to power outages in several states, most notably in Texas, and these negatively impacted economic activity in these states.

A global shortage in semiconductors exacerbated disruptions in the U.S. manufacturing sector.

A protectionist stance by President Biden who kept tariffs on aluminum from the United Arab Emirates added to the supply chain worries, but a U.K. push to join trade agreements such as Trans-Pacific Partnership successor was encouraging for global trade.

In other news, renewed political turmoil in Italy ended with Mario Draghi being appointed as the new Prime Minister.

Monetary policy in the U.S. remained unchanged, apart from Central Bank’s commitment to continue to provide support for the recovery.

The $1.9 trillion fiscal stimulus package was passed by the Senate despite fears of throwing more borrowed money at an economy that is expected to be running hot in summer. The proposed federal minimum wage increase seems increasingly less likely to be passed by the Senate, after the parliamentarians ruled that it cannot be included in a budget reconciliation bill. inflation

In Nigeria, the Federal government approved a new Medium Term Debt Management Strategy for the period 2020-2023.

In line with the Debt Management Office’s previous practice, the new strategy reflects the global and local economic impact of the COVID-19 pandemic and incorporates data from the revised 2020 Appropriation Act and the Medium-Term Expenditure Framework (2021-2023).

The Debt Management Office also hinted at the possibility of exploring funding from the Eurobond market.

However, this will only be done after all the other concessionary sources have been exhausted. Also, in the month under review, Nigeria established its infrastructure company, InfraCo. The board of InfraCo will be chaired by the Governor, Central Bank of Nigeria (CBN) and will include the Managing Director, Nigeria Sovereign Investment Authority (NSIA); President, Africa Finance Corporation (AFC); representatives of the Nigerian Governors Forum; Ministry of Finance, Budgets and National Planning, and 3 independent directors from the private sector.

Inflation.

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Coronation Merchant Bank

Coronation Merchant Bank records 15% PBT growth in 2020

by with No Comment financeNews

Coronation Merchant Bank Limited, at the weekend, announced its audited financial results for the year ended December 31, 2020, and declared a profit before tax (PBT) of N5.784 billion.

READ ALSO: Manufacturers Association of Nigeria (MAN) urges CBN to improve credit access for manufacturers

Commenting on the financial results, Banjo Adegbohungbe, managing director of the bank, said, “Despite the challenges in our operating environment, we navigated the headwinds that characterised the year to deliver strong results. In a year when the entire world grappled with the debilitating effects of the COVID-19 pandemic, we strengthened our partnerships with our customers and created sustainable value for our shareholders.”

A further highlight of the financials shows total assets up 63 percent from N253.35 billion in 2019 to N412.36 billion; loans and advances to customers up 69 percent to N122.21 billion as at December 2020 (December 2019: N72.2bn);

Customers’ deposits up 41 percent to N195.16 billion as at December 2020 (December 2019: N138.08bn).

Others show PAT down 1 percent to N5.040 billion (December 2019: N5.097bn), and shareholders’ funds up by 16 percent to N40.11 billion (December 2019: N34.57bn).

The key ratios show capital adequacy ratio: 20.01 percent as at December 2020 (December 2019: 19.17%); regulatory loan to funding ratio: 67.9 percent as at December 2020 (December 2019: 71.1%); NPL ratio: zero percent as at December 2020 (December 2019: 0%); cost to income ratio of 50.3 percent as at December 2020 (December 2019: 51.1%); net interest margin: 1.63 percent as at December 2020 (December 2019: 2.39%); EPS: 100k (December 2019: 101k), and return on equity 15.49 percent as at December 2020 (December 2019: 15.29%).

Despite the volatile environment in 2020, PBT increased by 15 percent from N5.024 billion in 2019 to N5.784 billion, while total assets grew by 63 percent from N253.35 billion in 2019 to N412.36 billion in 2020. Non-interest income grew by 23 percent, mainly driven by trading income that compensated for the declining yield environment in the market.

Risk assets increased by 69 percent as the bank continued to support its customers through difficult times. Cost of risk remained at a healthy level of 0.14 percent while NPLs were nil, reflecting the efficacy of our risk management framework and sound corporate governance. Operating expense grew moderately at 14 percent YoY in spite of the impact of FX devaluation and rising inflation, which closed at 15.75 percent as at December 2020.

During the year, the bank concluded its maiden international credit rating by Fitch with B- (stable outlook) as at December 31, 2020.

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