From Chris Agabi
3 October 2008
Lagos — The Central Bank of Nigeria (CBN) is likely to up the present capital base of N20 million required to operate other financial service institutions (OFI) other than a bank, insurance company or pension fund administrator.
Chief Sam Oni, the Director of Other Financial Institutions Department at the CBN, disclosed this in Lagos at the Finance Houses Association of Nigeria quarterly executives' business meeting and luncheon.
Other financial services institutions engaged in financial advisory and investment services but not banking or insurance services. Their role is limited to investment advisers and portfolio management.
With your present capital base, you may not be able to carry out robust financial services in the emerging market, he told the gathering.
"There is need for the other finance houses to self reconstruct before the CBN reforms on them are complete. For after the reforms, definitely the capital base will be increased.
"While we are not imposing a capital on you now, it is however necessary to increase your capital base on your own", he said.
Look at your capital base, your manpower competence level and your technology and upgrade it to be relevant to the impending reforms coming soon, he said.
Speaking earlier, the president of the Finance Houses Association, Mr. Eddie Osarenkhoe, called for the same measure of support the CBN is giving to microfinance banks to thrive and commended the CBN for helping them fight wonder banks in Nigeria.
Presenting a paper on "Reshaping The Financial Solutions Business," the guest speaker, Mr. Adeniyi Elumaro of Integrated Services Limited, said if FSS 2020 is to be achieved our banks must develop along with other financial services sector.
He noted that "a decade ago, Finance Houses were the bedrock of economic activities in Nigeria. They provided short, medium and long term funding for most economic activities. They were the lenders of first choice and they provided value for money."
But because the successes were not well managed, he said the sector collapsed but it still holds great opportunity for growth he said.
All the industry needs do, according to him, is to invest in technology, staff and innovative products. "We must grow capacity, broaden the business model and develop better products", he added.
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