Permit me to express my great pleasure and pride in being here for today’s Nigeria Deposit Insurance Corporation (NDIC) Special Day at the on-going 35th Kano International Trade Fair 2014. First of all, I would like to welcome our distinguished guests, particularly our Royal Fathers, State government officials, members of the academia and our esteemed stakeholders from civil societies and the private sector and of course the mass media who have been our partners in progress.
There is no doubt, the participation of the NDIC in the Kano International Trade Fair speaks volumes about our shared vision with the Chamber to promote collaboration among business concerns and public institutions toward opening up new economic partnerships with a view to attracting foreign investments into Nigeria. This commitment of the Chamber is further reinforced by the theme of this year’s fair: “Promoting Agricultural and Other Non Oil Business Sectors for Sustainable Development.” The theme is no doubt a welcome development as it focuses attention on the nation’s economy, which is in line with the transformation agenda of the present administration.
This year’s Kano International Trade Fair is timely as it coincides with the Corporation’s 25th Anniversary Celebration. Established by the NDIC Decree No. 22 of 1988, now NDIC Act No 16 2006, the Corporation commenced operations in 1989 and had since then recorded landmark achievements in protecting depositors’ funds and contributing to the safety, soundness and stability of the financial system.
The Corporation’s examination of the book’s and affair’s of Microfinance banks (MFBs) and Primary Mortgage Banks (PMBs) revealed weaknesses in governance structure, poor compliance to prudential guidelines and risky financial practices in the two banking sub sectors which posed serious threats to depositors’ interest. In a bid to address these challenges, the Corporation embarked on capacity building seminars and workshops specifically designed for operators of MFBs and PMBs. Last year, the Corporation held workshops for operators of MFBs across all the six geo-political zones of the country and targeted a total of 880 MFBs. A sensitization workshop was also organised in Lagos and Abuja this year for the Operators of PMBs with the theme; “Developing and Implementing Effective Risk Management in Primary Mortgage Banks in Nigeria”. A total of 384 participants drawn from Mortgage Banks, Mortgage Bank Association of Nigeria, Federal Ministry of Finance, Federal Mortgage Bank, Bank of Infrastructure, NAICOM and NDIC attended the Workshop.
The NDIC has also developed and deployed a framework for financial assistance for deserving MFBs and PMBs in order to address temporary liquidity problems. The Corporation’s financial assistance extended to MFBs is limited to a maximum of 20% of their total deposit liabilities. However, the financial assistance is only accessible to MFBs which have liquidity problems and are technically solvent. The beneficiary MFBs must also provide adequate collateral for the loans the value of which should not be less than 150% of the financial assistance. That is not all, the MFB must have competent management, sound corporate governance and demonstrate a credible strategy to generate enough income to enable the bank repay the loan.
Similarly, the President Commander in chief of the Armed forces of the Federal republic of Nigeria, launched a National Financial Inclusion Strategy (FIS) on 23rd October, 2012 aimed at reducing financially excluded adult Nigerians from 79.6% to 20.0% by the year 2020. As part of the Financial Inclusion strategy, the CBN earmarked N220 billion for lending to Micro Small and Medium Scale Enterprises (MSME) with 60% to women empowerment through rural micro credits. The N220 billion MSME fund can be accessed through Deposit Money banks and Micro Finance Banks. I therefore advise all participants at this fair to take advantage of the opportunity provided by the MSME funds.
The NDIC takes pride in its compliance with the standards and principles of International best practices at all levels of its operations. Following the Bankers Committee’s resolution to implement the principles of Sustainable Banking, based on the philosophy of ethical practices and its impact on the socio-economic environment, the NDIC incorporated sustainable banking principles into the Corporation’s governance structure. The principles included
• Good Governance
• Financial Inclusion,
• Financial Literacy,
• Consumer Protection,
• Employee Welfare,
• Capacity Building,
• Collaborative Partnerships and
The Corporation also set up a Sustainable Banking Desk under the Office of the Managing Director/ Chief Executive.
Distinguished ladies and gentlemen, I am proud to inform you that NDIC, as a deposit insurer, has been effectively responding to all emerging issues in the global financial system, particularly financial literacy, consumer protection, financial inclusion, sustainable banking and extension of deposit insurance coverage to depositors of non-interest banks. You might recall the roll out of the Regulatory Framework for Mobile Payments Services in Nigeria which is aimed at revolutionizing the Nigerian payment system in tune with global developments as well as facilitating financial inclusion in the country. The development has led to the licensing of 24 Mobile Money Operators (MMOs) by the CBN. In order to engender confidence of the public in subscribing the products of the MMOs, the NDIC has considered as imperative the extension of deposit insurance to the individual subscribers of the MMOs in the form of pass-through deposit insurance. The framework for making the pass-through insurance scheme operational is currently being finalised by the Corporation.
Let me restate the fact that the Corporation is also aware of the perennial problems between the customers and their banks, ranging from arbitrary bank interest charges; account balances manipulation to outright frauds and forgeries. While the banks have taken some steps in addressing the problems, the Corporation has established a Help Desk, which is a dedicated 24-hour toll-free telephone line (080063424357), to enable bank customers and other stakeholders report financial abuses at all times. The Corporation has also created Complaint Units in the Bank Examination Department (BED) and Special Insured Institutions Department (SIID) to cater for the need of customers of DMBs, MFBs and PMBs who wish to lodge complaints. That is not all. The Corporation’s Website – www.ndic.gov.ng has been re-designed and equipped with major social media platforms like Facebook, YouTube, tweeter and Instagram to enhance communication with our stakeholders.
Before I conclude this address, let me draw your attention to two other milestones in the NDIC history. Last year, the Board and management approved the rebranding initiative which involved total overhaul of the processes, procedures and systems of the Corporation with a view to achieving effective and efficient service delivery. As you are also aware, depositors and other stakeholders often confuse us with insurance companies. The new slogan on the NDIC new corporate identity: “Protecting your bank deposits” not only showcases the NDIC as a deposit insurer but also clearly distinguishes it from conventional insurance companies. Just recently, a non governmental organisation (NGO), Independent Service Delivery Monitoring Group (ISDMG) conducted an on-line survey, the outcome of which rated the NDIC as the most outstanding public institution in Nigeria in finance, trade and investment.
In conclusion, I wish to on behalf of the NDIC Board, Management and Staff to profoundly thank the organizers of this trade fair. No doubt, this fair has provided the MFB’s, PMI’s, DMB’s, Investors, exhibitionists and other participants the opportunity to interact with a view to maximizing the opportunities provided by the fair. May I also express our sincere appreciation to all our special guests, particularly our Royal Fathers, who have found time despite their busy schedules to be part of this occasion. Undoubtedly, the press has always been a partner in progress in the NDIC public awareness activities. We appreciate you all and wish you journey mercies back to your respective destinations.
Distinguished Ladies and gentlemen, I thank you all for your attention.
UMARU IBRAHIM, mni, FCIB
NIGERIA DEPOSIT INSURANCE CORPORATION
26TH NOVEMBER, 2014