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Thursday, July 30, 2020 / 8.00AM / Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV
Stakeholders in
the Microfinance Banking segment of the Nigerian financial services industry
have called for more clarity on the regulations and implementation of the GSI
framework that is scheduled to take off from August 01, 2020.
This was part
of the major thrust of the discourse on the "Implications of Global Standing
Instruction & Sandbox Policies for MfBs" hosted through the Zoom Video
Conferencing platform by Accion Microfinance Bank.
The discourse
brought together key players in the financial services and fintech industry
amongst other critical sectors in the ecosystem.
According to
the MD/CEO of Accion Microfinance Bank, Mr. Taiwo Joda, it was an opportunity
to brainstorm on the recent key developments and regulatory steps taken by the
Central Bank of Nigeria (CBN) covering the Global Standing Instruction
guidelines and Sandbox policies as they affect the operations of the
Microfinance Banks.
In his remarks,
Mr. Samuel Oluyemi Head, Emerging Markets & Other Financial Institutions,
Nigeria Inter-Bank Settlement Systems, NIBSS explained that the Exposure
draft for Regulatory Sandbox which was released by the CBN on June 23, 2020 is
geared towards promoting innovation, effective service delivery, healthy
competition and the deepening of financial inclusion in the country. He also
stated that on July 13th, 2020, the CBN also issued a circular for the Global
Standing Instruction framework, that is focused on facilitating an improved
credit repayment culture, reduce Non-Performing Loans and set a watch-list
for consistent loan defaulters.
Speaking on
both the GSI and Sandbox regulatory provisions, Mr. Samuel Oluyemi made a
strong case for the opinion of the Other Financial institutions, OFIs like the
Microfinance banks to be considered in the implementation of the policy
directive.
He listed the
following as the key features of the Sandbox Environment:
In the area
of the GSI framework, he gave a breakdown of the cycle and elements of the GSI,
which consist of the following;
He stressed
the importance of full disclosure by individuals who have accounts in Nigerian
financial institutions, to enable the GSI work effectively. According to
him the major concern for the GSI guidelines was the need for clarity on who
will be responsible for the regulation of the MFBs.
Giving her
intervention at the forum the Partner, Udo Udoma & Bello-Osagie Chambers,
Mrs Yinka Edu defined the Sandbox as a framework set up by financial regulators
to allow operators to try out certain innovations in a controlled environment.
She said the
CBN Regulatory Sandbox provision was a welcome development, as it will enhance
effective regulations for the industry and will enable healthy competition
amongst the fintech players. She also believes it will strengthen collaboration
between the banks and fintechs with the aim of boosting financial inclusion for
Nigerians.
On the GSI
framework she stressed that the legal provisions guiding it will be critical to
its development. In addition, she said one area that needs to be addressed is
the joint accounts as it concerns the MFBs.
Dr. Femi
Oyenuga, the Chief Digital Officer, Accion Microfinance Bank on his part
asserted that a sandbox is designed to create public confidence in the
financial services industry. He called on the MFIs to collaborate more with
Fintechs to drive digitization and seamless financial services in the country.
MFIs according to him should revisit their strategies and align technology, security and the proprietary rights.
Related Links - Download PDFs
1.
Memo to
AMCON: Nigerian Tax Payers Are Not Responsible for Repayment Of Bad Debt - Proshare, Jul 23, 2020
2.
Operational Guidelines on
Global Standard Instruction (GSI) - CBN, Jul 15, 2020
3.
Executive
Summary: NPLs & Bank Debtors - The Case for a New Industry Approach - May 14, 2020
4.
NPLs & Bad Debtors: - The
Case for a New Industry Approach - Debtors Africa, May
13, 2020
5.
AMCON and Financial Services
Debt Burden in Nigeria - Aug 17, 2018
6. Coronanomics and the Nigerian Economy - Jun 06, 2020
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