Roles of CBN, banks in SANEF project

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The Central Bank of Nigeria (CBN) last week released the framework for the Shared Agent Network Expansion Facility (SANEF), where it outlined its responsibilities and that of the Deposit Money Banks (DMBs) in the project.

The CBN and the bankers committee in 2018, established SANEF, to enhance the provision of financial services to the excluded population.

Access to financial services has remained a major challenge to development in Nigeria. Establishment of bank branches as a strategy to improve access may not be viable due to inadequate infrastructure and huge cost. Efforts by various governments, policy makers and regulators to increase access to finance have not yielded the desired result.

However, the SANEF facility provides financing to CBN-licensed Super Agents and Mobile Money Operators, to expand their networks to deepen financial inclusion in Nigeria. The Facility will enhance the capacity of the operators to roll-out more financial access points across the 774 local government areas in Nigeria particularly in the financially excluded locations.

As part of its responsibility, the CBN is expected formulate guidelines, provide funding, determine lending limits and interest rate, monitor and verify projects financed.

Other responsibilities include to conduct impact evaluation, generate periodic reports on its performance, conduct stakeholder engagement, and  review the guidelines as may be necessary from time to time.

For the DMBs, they are to appraise and approve requests, forward approved requests to CBN, disburse facility to beneficiaries, monitor roll-out and ensure proper utilization of Funds, render monthly returns to CBN, and bear credit risk for loans comply with the guidelines.

Borrowers also have their own responsibilities such as adhere strictly to the terms and conditions of the facility, utilize the funds for the purpose for which it was granted, make available records for inspection/verification by the CBN and PFI, repay loan as at when due, and comply with the guidelines.

According to the guideline, the facility shall be term loan limited to N500 million with disbursements to be in tranches subject to satisfactory performance. It is a 10 year tenor (maximum) with of 5%, 2% to the CBN and 3% to the Participating Financial Institution (PFI). Repayments shall be quarterly to CBN with moratorium of 2 years on principal and 1 year on interest.

The objectives of the facility are to enhance the capacity of mobile money operators (MMOs) and super- agents to establish financial services access points in under-served and unserved locations; increase agents penetration among the unbanked and excluded population; provide platform for achieving the financial inclusion targets; and create jobs and promote inclusive economic growth.

The facility shall be utilized for associated cost for on-boarding of agents, where 25 percent of the agents must be located in financially excluded areas particularly in the North Western and North Eastern States.

 

Hope Moses-Ashike

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