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HF Group, Interswitch Launch International Money Transfer Service

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Whizz allows customers in the diaspora to remit funds up to Ksh1 million instantly from their debit or credit cards

HF-INTERSWITCH PARTNERSHIP - FH international money transfer
HF Group CEO Robert Kibaara (centre) with Interswitch Kenya Country Manager Romana Rajput (left), and Ag HFC Managing Director Regina Anyika during the launch of the HF Whizz International Money Transfer. [ Photo / Business Today ]

HF Group has announced its partnership with Interswitch Group, a leading digital payments and commerce company, to expand its digital banking services to include international Money Transfer (IMT). The IMT service will enable HF’s diaspora customers to remit funds seamlessly into any HF account and also provides a simplified channel for them to make their loan or mortgage payments.

Robert Kibaara, HF Group Chief Executive Officer, said the company has made significant investments in technology as it diversifies into full-service banking. “Our focus is in building a digital first bank that is responsive to emerging customer trends,” Kibaara said. “Designing the best customer experience is a continuous process and our vision is to empower customers to make their personal and business transactions at the click of a button.”

The solution, developed through the partnership with Interswitch Group, is known as HF Whizz International Money Transfer. It allows customers in the diaspora to remit funds up to $10,000 (Ksh1 million) instantly from their debit or credit cards.

“Our understanding of the customer and the market, coupled with strategic partnerships with fintech, enables us to design solutions that are simplified to address our customers’ needs,” Mr Kabaara said.

“Kenyans in the diaspora send a lot of money to associates and loved one’s back home and are always on the lookout for a secure means to make these remittances. We are giving them an opportunity for real-time funds transfer from wherever they are directly into any HF account.”

Romana Rajput, Country General Manager at Interswitch Kenya, said the partnership is consistent with its commitment to make payments reliable, secure and convenient.

The HF Whizz IMT will be rely on Interswitch’s secure and robust collection solution – IPG – to enable the seamless transfer and receipt of funds into local accounts. According to the Central Bank of Kenya data, $3 billion was remitted into the country from the diaspora in 2020

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Banking

OneBank Digitises Esusu Rotation Savings For Family And Friends

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Lagos, Nigeria, 25 February 2021: Sterling Bank Plc has added rotation savings and peer-to-peer lending feature to the available options on OneBank, its digital banking platform. The new feature, known as Ajo Scheme, is the digital construct of Ajo, Esusu and Adashe, the oldest informal means of collecting and saving money through a savings club or partnership for big-ticket transactions such as a down-payment on a house, car, gadgets, school fees, overseas trips. The Ajo Scheme will allow members that are OneBank users to make an agreed monthly contribution with funds accessed on an agreed rotating basis.
Group Head, Digital Banking of Sterling Bank, Oladipo Alabede, disclosed this in a recently issued statement. He explained that the Ajo Scheme could be initiated by an interested customer who will invite family and friends to join the scheme. However, all participants must be registered users on OneBank and must accept the invitation request.
He said there is also an allowance for participants to switch collection positions after being accepted to be part of the scheme.
Oladipo said that debiting participants’ accounts and remittance to beneficiaries is automated, adding that the process runs daily and will debit participants on the day he/she has selected.
He said where the account is not funded, the process is repeated for the entire day selected by the participant. If the contribution still fails to come in, the scheme continues as is. The benefactor for that cycle will get only the contributions that came in for that month.
 Oladipo noted that disputes relating to unfunded accounts will not be handled by the bank, saying that participants would have to sort out the dispute outside the App.
According to him, someone can be added without his/her knowledge if the creator knows the email address. Still, such an added person will have to accept before he can become a valid participant.
The Group Head of Digital Banking said once the Ajo Scheme starts; it cannot be dissolved until its cycle is completed. He added that there are terms and conditions of the Ajo Scheme that participating members should accept and that the bank will not guarantee payments.
 He said participants would see the details of collections like the number of paid participants, number of unpaid participants, the number of participants that contributed in a particular month. Same for the total amount contributed, the current cycle of contributions, and the cycle of disbursed amounts be available on the App.
Oladipo explained that monthly disbursements would occur on the 28th day of every month after all contributions for that month had come in.

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Banking

Zenith Bank spends N20 billion on IT in 2020, up 122%

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Zenith Bank spent a whopping N20 billion on IT in 2020 more than double its 2019 spend of N9 billion.

Nigeria’s largest bank by assets, Zenith Bank Plc, spent a whopping N20 billion on Information Technology in 2020, more than double its 2019 spend of N9 billion.  

A cursory view of the bank’s expense line for 2020 reveals that it spent N148.1 billion on other expenses compared with N129. 4 billion in the same period of the previous year. Information technology was the major driver of the bank’s expense line, making up about 15.5% of total operating expenses. 

READ: How does a bank make N19 billion a month?

Why this matters: Most banks are expected to record higher spend on information technology in 2020 due to forced work-from-home policies triggered by Covid-19. Apps such as Zoom, and Microsoft Teams went mainstream during the pandemic as most businesses increasingly depended on them to function.  

  • While remote working may have been a major contributor, the bank likely splurged heavily on software applications, cloud computing, SaaS, and investing in technology to drive its FinTech goals. 
  • Apart from Information Technology, the bank also spent more on AMCON levy during the year, incurring cost of N30.9 billion.  
  • A notable reduction in year-on-year expenditure was its spending on Hotels and Travels. The bank spent N1.8 billion in Travel and Hotels. 
  • Zenith Bank reported a record N230 billion in profit after tax for the year ended December 2020. The bank is now the largest bank by Total Assets, with over N8.4 trillion.
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Banking

Zenith Bank GMD explains why its difficult for SMEs to get loans from  banks

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Zenith Bank empowers Nigerian SMEs, partners Facebook on SME digital workshop, Zenith Bank MD Explains Why It Is Difficult for Nigerian SME’s To to Get Cheap Loans From Bank 

The Group Managing Director of Zenith Bank, Mr. Ebenezer Onyeagwu  has discussed the impressive positive returns recorded this year by the bank. He also shared some insights on the relationship between commercial banks in Nigeria and Small/Medium Enterprise business owners.

Onyeagwu gave all these insights while speaking in an interview with Arise TV.

On why Nigerian banks charge high-interest loans, making it difficult for small business owners to get single-digit loans for their business, the Zenith Bank GMD explained that the operational costs and regulatory costs involved in running a bank usually sets the pace for every other thing. He listed examples of operational costs involved in running a single bank branch and how all that adds to the bottom line at the end of the day.

He also highlighted regulatory costs which are not particularly known by people outside the banking sector as one of the costs of doing business banks face. These two factors mainly contribute to the high-interest rates banks charge on loans.

“Our cost profile depicts the operating environment. Within the year we saw an upward review in fuel price, which accounted for the increase in our fuel cost. Again, when you are looking at cost of doing business, you also need to look in total, how businesses are being conducted. If I set up a branch today, I would need to provide my infrastructure, I need to provide power, water and in some cases, we even construct the road to provide access to the branch location. So, as a result of the poor state of infrastructure, you see that businesses would now have to contend with providing these resources to get their operations running. So, if we have more available and cheaper utility services and infrastructure to support businesses, of course, the cost would go down.

Then, looking at cost of doing business in banking, it goes beyond those operational costs. We also have things like regulatory cost. A bank like Zenith, given our size, the burden of regulatory cost on us is heavy. By regulatory cost here, I am referring to the Nigeria Deposit Insurance Corporation premium and the Asset Management Corporation of Nigeria fee. So, because of our size, if you look at the numbers, you will see that these regulatory costs account for a whopping 28 percent of our overhead. So, all of them come together to add to the cost of doing business for us as a banking institution in the country,” Onyeagwu said.

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On why it is difficult to get single-digit loans from Nigerian banks, Onyeagwu highlighted 3 key reasons why single-digit loans are very difficult to obtain in Nigeria. He listed the following:

  • Fiscal deficit
  • Government Borrowing
  • Money supply and demand

The Zenith GMD stated that it is nearly impossible to issue an interest rate by fiat. He stated that the interest rate will always be determined by market forces.

He said, “First of all, if you are looking at the interest rate, you have to look at it in terms of the theoretical framework and issues around money supply, demand for money, issues around government borrowing, and the fiscal deficits. So, when you put all that together, you will see that you cannot have a situation where you decree interest rate by fiat. Interest rates would always be set by the dynamics and realities in the market. In this case, if you are looking at the interest rate in Nigeria, you have to index it to the risk-free rate. The one-year risk-free rate in Nigeria is like 10 percent. So, it will be difficult to have a single-digit rate in Nigeria.” 

Solutions 

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Onyeagwu highlighted the various ways the Central Bank of Nigeria has intervened in a bid it provides single-digit loans to entrepreneurs in certain sectors. Sectors like cinema, movie, ICT, and fashion designing have been enjoying single-digit loans courtesy of various CBN initiatives.

He said, “We have intervention funds such as the Creative Industry Financing Initiative, where banks in the country provide long-term single-digit funding for entrepreneurs who are in cinema, movie, ICT, and fashion designing. We also have what is called the Agri-Business/Small and Medium Enterprise Investment Scheme. It is also a pool of funds available for businesses in that space. You can as well access these loans. Apart from these, the CBN also has different intervention schemes such as the Anchor Borrowers Scheme, the Commercial Agricultural Credit Scheme, and others, and all these loans are single-digit and they provide long-term financing. The big problem we have is that when you see an SME approaching you for the loan, the SME may not have a track record; he walks up to you and tells you that he needs a single-digit loan and needs N20 million.

“But I can’t give you N20 million without looking where you are coming from. So, we cannot decree the interest rate by fiat. But the regulators have done good work by providing funding schemes and whoever is eligible would get such single-digit long-term loans once they meet the criteria. So, the funding is there, but the SMEs when they approach the banks don’t often meet the eligibility criteria

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