TheCable

Nnamdi Okonkwo, managing director of Fidelity Bank, says the voltage being generated at all 248 branches of the bank across the country can power the whole of Lagos state.

Okonkwo made the remark at a conference organised by the Finance Correspondents Association of Nigeria (FICAN) in Lagos.

He blamed the inability of commercial banks to give long-term credit facilities on the non-availability of long-term-deposits.

The theme of the conference was ‘Nigeria beyond Oil, Financing Options for Non-Oil Exports’.

He said that most depositors who had huge amounts to save, did it on short-term basis because of the uncertainty of economic policies.

Okonkwo wondered why banks were always condemned at every occasion for not lending long-term facilities to businessmen and farmers, whereas they traded mainly with short-term deposits.

He insisted “that commercial banks do not have the kind of huge amount of money to lend out to those in businesses for long-term period’’.

The financial expert also listed lack of the right framework as responsible for the refusal of local banks to lend long-term to Small and Medium Scale Enterprises (SMEs).

He said lack of infrastructure, such as power, had made the bank to generate private electricity for its operations.

According to Okonkwo, banks paid full interest on all deposits, while 25 per cent was taken as Cash Reserve Ratio (CRR), leaving banks with only 75 per cent of the amount to trade with.

“If as a bank, I know a secret place where I can get long-term funds to trade with, I will be the number one bank in Nigeria today because I can lend  long-term,” he said.

“Bring me a depositor that will place N100 million today with me at 10 per cent. I will then give a loan at 15 per cent and pay the depositor’s interest on N100  million but I have to trade with N75 million because the Cash Reserve Ratio is deducted from the N100 million.

“For me to get access to five per cent of the money, I have to lend to a cocoa farmer. You have to lend for industrial production.”

He explained that banks paid three percent as premium to Nigerian Deposit Insurance Corporation (NDIC) from all deposits.

“Not only that, the bank will also pay three per cent NDIC premium on the same N100 million deposit.

“Remember, I run my own power. In fact, if you put together the voltage we produce in 248 branches of Fidelity Bank, it can power the whole of Lagos State.”

He said that it is difficult to get a Nigerian who would deposit money in the bank for one year, yet people keep blaming the banks for not lending money for long-term projects.

Okonkwo said that a lot of banks collapsed in the past because of assets mismatch, that is people who matched long-term assets with short-term funds.

“When there is a run in the system, the owners of the short-term funds will come for their money and you have to pay them. If you pay them, the people you gave long-term loans cannot pay up. Then you begin to have distress in the system.”

The financial expert, however, said that the Nigerian Export Import Bank (NEXIM Bank) and Fidelity Bank Plc were taking measures to enhance non-oil exports and create wealth for Nigerians.

He said the lender is always at the forefront of financial services solutions and lending, adding that supporting SMEs should go beyond funding.

“This is what informed the Fidelity SME Radio Forum, a programme designed and sponsored by Fidelity Bank to educate, inform, advise and inspire budding entrepreneurs, that is aired on Inspiration FM Lagos,” he said.

Ifie Sekibo, managing director/chief executive officer, Heritage Bank Ltd., said Nigeria has export potential in some agricultural commodities such as cocoa, cashew, groundnut and fish, sesame seed, ginger, cassava, snails, tobacco, coffee, cotton lint and rubber.

He said Nigeria could also export bitter leaf, plantain flour, melon, crayfish and maize.

Sekibo, who was represented by Olugbenga Awe, group head, agriculture finance, project and development finance department of the bank, said the country could also export manufactured goods such as cocoa cakes, butter, powder and liquor.

Sekibo expressed regret that exporters from Nigeria were not competing enough, adding that some Nigerian exporters are fond of travelling to Cameroon to bring in products and blend them for exports.