A new publication on the Nigerian financial institution, written by Joseph Nnanna, the chief economist of the Development Bank of Nigeria Plc (DBN), is to explore the various role played by Development Finance Institutions (DFIs) in bridging the perceived funding gap for risky sectors of the economy.
Titled, ‘Banking in Nigeria: Financing during Turbulent Times,’ the publication according to the author is a significant contribution to the Nigerian banking industry.
“This opus highlights very succinctly, the role of Development Finance Institutions (DFIs) play in bridging the funding gap for perceived risky sectors and perhaps other less risky sectors that could find it difficult to access finance during economic uncertainty,” Nnanna, a professor and seasoned economist with experience in various fields and presently a development banker, said.
The approach adopted by Professor Nnanna for measuring performance to gauge the success of the DFIs which is a combination of both financial and non-financial indicators is apt. He, however, elaborates his views by advocating for the creation of jobs and improving the human development index of the ecosystem.
Although being profitable according to him is a prerequisite for financial sustainability, the author makes a case on the need to zero in on the non-financial performance indicators such as growing micro-businesses to small, and small to medium, and so on.
The case studies included in the book were excellent means of dissecting the operating environment for several industrial sectors to enable readers to appreciate the challenges confronting the Nigerian MSMEs in accessing credit and growing their respective businesses.
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One other area that this book stands clear from others, is in the analysis of “TRUST” as a bedrock for stability in the banking ecosystem. “Collectively, trust needs to be established to achieve meaningful growth. And setting a framework at the macro level remains crucial for the banking system to continue to move forward,” the author posits.
Kanu Ohuche, the book reviewer, in commending the efforts of Nnanna said, the author took the audience back memory lane by articulating that “banking in Nigeria is 127 years old this year, having debuted with Barclays bank, now the First Bank of Nigeria, in 1894″.
Ohuche therefore, said that it was safe to say that banking in Nigeria has come of age. “Indeed, at 127 years, banking in Nigeria would have been a mature adult, if not a great, great grandpa in terms of chronological age and wisdom,” he said.
Whether this maturity, however, can be deduced from its behaviour in the context of its role in the Nigerian economy or its leadership of the financial services sector, remains conjectural, or even controversial in my opinion. “In my culture, the Igbo culture, when an adult’s behaviour does not reflect his or her age, such an adult is often treated with contempt, and disrespected by his or her peers,” Ohuche said.
Accordingly, he posits that the bank plays a pivotal role in supporting economic growth and development through its intermediatory contributions in a market-driven or command-driven economy.
Notwithstanding the several roles played by the bank, Ohuche said he sincerely believed that the very commendable effort by Joseph Nnanna in penning the book is one of the ways to make the Nigerian banking system behave its age.
“That said, it is also inconceivable that the Nigerian economy would have been what it is today without the immense contributions of the Nigerian banking sector,” Ohuche said.
Furthermore, the book reviewer informed that the readers would find the book very useful in analysing the successes and challenges of the various interventions offered by the Central Bank of Nigeria (CBN), both in bridging the funding gap and subsidising credit to the critical sectors of the Nigerian economy.
According to him, several intervention programmes have been proposed and implemented by the CBN to positively impact the real economy with arguably mixed results.
Ohuche concluded that the book should not be missed by regulators, supervisors, operators, customers, analysts, and others within the banking sector. According to him, the exploratory approach to key financing issues adopted in the book offers a reader new thinking on how to approach financing problems and feasible solutions particularly during the period of economic turbulence.
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