The International Finance Corporation (IFC) says it has firmed up arrangements with the Chartered Institute of Bankers of Nigeria (CIBN) on capacity building and Certification on Sustainable Banking in Nigeria
Ibrahim Salau, Environmental and Social Risk Management (ESRM) Nigeria programme coordinator, IFC, made the call at an advocacy dialogue Webinar, organised by the Centre for Financial Studies (CFS)-CIBN in Lagos.
Salau said the objective of the programme is to increase the uptake of E&S standards by FIs in the sub-Saharan Africa region leading to a reduction in risk exposure for FIs and an improvement in the E&S performance of their clients in the long term.
He also said the programme partner’s with financial services regulators and industry associations to raise awareness on the business case for E&S risk management in the financial sector, provide technical support on the development of mandatory E&S risk management standards for the financial sector and build capacity to supervise the implementation of the standards
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Salau also stated that the curriculum for the certification programme had been approved by the CIBN Governing Council and the course would be launched later this year. He added that a Training of Trainers (TOT) on Sustainable Banking will kick off next week with over 100 participants.
Aishah N. Ahmad, deputy governor, financial systems stability directorate, Central Bank of Nigeria, and Chairman of the event, in her address, said that ‘Banking has been undergoing disruptions before the pandemic. Technological disruptions and competition have made banks change their business model. Given that Banks have been evolving over time they are in a better position to weather the current storm.
“Banks can only manage these challenges if at this disruptive event that is happening, they can fortify their big models and become more agile to respond to what’s happening in the market. And over 80% of banks have incorporated sustainable banking principles in their model,” she said.
Mosun Belo-Olusoga, former chairman, Access Bank Plc, who was the Guest speaker, in her presentation stated that the implications of the pandemic on the Nigerian economy include a rise in inflation, decline in investment such as Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI), a decline in forex income, drop in oil revenue and a contraction in GDP which would all, in turn, lead to a fall in the value of the currency.
She also expressed that some of the implications for the banking sector include restraint on financial performance, movement of businesses to digital space, likely changes to board procedures and effectiveness, likely fall in Capital Adequacy Ratio below regulatory limits, a decline in cash flow from loan repayment, increased fraud and cyber threats as a result of relaxed internal control, among others.
She said that ‘we don’t know when life will get back to normal, there is more pressure than ever for organisations to innovate and think outside the box. The good news is that financial institutions that step up to meet these challenges will benefit from a brand and shareholder perspective’.
“The Covid-19 pandemic brought to fore the critical linkages between the environment, human health, and the overall economy, she said.
Simon Thompson, Chief Executive, Chartered Bankers Institute, UK, stated that the priorities have changed as most policies are focused on health and economic emergencies. It’s therefore not unexpected that climate change and sustainable banking have taken a back seat and one of the major problems in sustainable banking finance is the lack of realistic carbon pricing.
On his part, Jibril Aku, Vice Chairman, Board of Directors, FMDQ Group, said that liquidity support is necessary for Microfinance banks.
The fact that the industry had been evolving itself puts the banks in a better position to weather the current challenges that are facing them.
The CIBN advocacy dialogue, Series 2.0, was centered around the theme “Enhanced Sustainable Banking (ESB) Model in the Event of Major Economic and Business Disruptions’. The programme was chaired by Ahmad, while Mosun Belo-Olusoga, former Chairman, Access Bank Plc, and Lead Consultant/Chief Marketing Officer, The Knowledge and Resource Centre (KRC) Limited was the guest speaker.
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Other speakers at the event were Ibrahim Salau, ERSM Nigeria Programme Coordinator, International Finance Corporation (IFC), and Femi Awoyemi, Founder/Chairman, Proshare Nigeria Limited, the moderator.
