The country’s largest banks may be set to embark on a round of acquisitions as they seek to diversify their sources of income away from treasury bills. According to consulting firm McKinsey, the proportion of Nigerian bank earnings derived from fixed-income securities increased from 14%in 2009 to 30% in 2019. But a collapse in Treasury bill yields, coupled with inflation at its highest for three years, means there’s no prospect of positive real returns on the paper in the foreseeable future. Opportunities remain for banks to develop scale across segments, by targeting small and medium-size enterprises or geographies such as the north of the country, which remains underserved, McKinsey says. But economists argue that outside of the market for loans to salaried employees, banks are hampered by a lack of data on potential customers to allow them to assess credit risk. There are few credit bureaus that can provide data on people working in the informal economy.
SOURCE: THE AFRICA REPORT
More Stories
Holding Thumbs for Kenya’s Miracle Birth
New Infrastructure Project Puts Government and Residents at Loggerheads
The Devastating Impact of Boko Haram’s Activities Transcends Nigeria’s Borders
Namibia Not Backing Down on its Gay Laws
How to Get Back Learners Who Dropped Out of School
Liberia Mourns the Deaths of Worshippers
The Rise and Rise of Facebook in Africa
Horrific Blast Rocks Ghana’s Mining Town
Donors Called Out for Bringing Near to Expiration Vaccines
Africa’s Digital Economy Could Contribute $180bn to the Region’s Growth by Mid-decade
Las Vegas Resident’s Three-week Adventure through Egypt
Tunisia Needs “Deep Reforms” Such as Drastically Reducing its Vast Public Wage Bill