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CSEA Charts Roadmap To Improved OPS’ Funding, E-Banking Transactions

The Centre for the Study of the Economies of Africa (CSEA), a leading economic research and analysis organisation, has advocated the need for financial intermediaries in Nigeria to continue to play their roles in promoting private sector growth by providing appropriate and easily accessible credit facilities.

In addition, the research group also charged financial sector regulators to keep monitoring trends in the sector to ensure a resilient financial ecosystem.

The Centre, in its latest Nigeria Economic Update Issue 17 sourced by BRTNew.ng on Friday gave the advice against the backdrop of the marginal increase of Nigerian banks’ lending to the private sector, which stood at N20.37 trillion in the last quarter of last year, representing 2.55 percent increase over the preceding quarter’s lending.

The research firm stated: “Total credit allocated by Nigerian banks to the private sector stood at N20.37 trillion as of Q4 2020. This represents a 2.55 percent increase from the N19.87 trillion recorded in the preceding quarter.

“The sectors that benefitted most include oil and gas sector (19.3 percent) and manufacturing sector (15.7 percent). Total non-performing loans (NPLs) increased by 15.7 percent to N1.23 trillion in Q4 2020, up from N1.06 trillion in the previous quarter.

“Despite the rise in NPLs, there was no significant change in the proportion of NPLs as a share of gross loans. It is important that financial intermediaries continue to play their role in promoting private sector growth by providing appropriate and easily accessible credit facilities.

“ Financial sector regulators should also keep monitoring trends in the sector to ensure a resilient financial ecosystem”, the research firm added.
This is even as it also advised the monetary authorities to rev up the financial inclusion drive in order to consolidate on the e-banking successes recorded so far.

The CSEA noted that statistics published by the National Bureau of Statistics (NBS) indicated improved performance in total volume and value of electronic banking transactions with the volume rising to3.46 billion valued at N356.7 trillion. This represented a 24.6 percent and 11.4 percent increase in transaction volume and value respectively during the quarter under review.

Specifically, the research firm further stressed that consistent growth in total digital financial transactions could signify a positive trend for the country’s financial inclusion goals.

It further clarified: “Total volume of e-payment transactions for the period under review was 3.46 billion valued at N356.47 trillion. This is a 24.6 percent and 11.4 percent increase in transaction volume and value respectively, relative to the previous quarter of 2020.

“Dis-aggregation by types of payment channels shows that online transfers accounted for 64.3 percent and 33.7 percent of total volume and value in the period under review. Real-time gross settlement (RTGS) accounted for just 0.04 percent of volume but 31.7 percent of value, while National Electronic Funds Transfer (NEFT) accounted for 1.4 percent of volume and 27 percent of value.

“Consistent growth in total digital financial transactions could signify a positive trend for the country’s financial inclusion goals. It is however important that such growth ultimately translates to extending banking services to excluded segments of the population”, the CSEA projected.

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