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Nigerian Banks Begins New USSD Pricing Implementation

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Nigerian Banks Begins New USSD Pricing Implementation, SiliconNigeria

Nigerian Deposit Money Banks (DMBs) have commenced the implementation of the approved new pricing model for Unstructured Supplementary Service Data (USSD) short code services for transacting mobile banking services.

All the banks involved in USSD transaction are now informing their customers that the new fee of N6.98 kobo has taken effect from today once a customer uses the USSD protocol to make payment/transfer.

Also, one of Nigeria’s biggest lenders, Guaranty Trust Bank (GTBank) this afternoon sent out an email to their customer titled “Important Update on USSD Transactions”. The statement reads, “Please be informed that you are now required to pay a fee of N6.98 to your mobile network provider for every banking transaction carried out on all USSD banking platforms.

“This means that when you send money to anyone using USSD, a fee of N6.98 will be charged to your bank account, which is in turn remitted in full by your Bank, to your mobile network provider. Please note that Airtime and Data purchases via USSD are exempt from this charge on USSD platforms.”

It should be recalled that on March 16th, 2021, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) released a new pricing model for USSD short code services.

A joint statement signed by Osita Nwanisobi, Head, Corporate Services, CBN and Dr. Ike Adinde, Director, Public Affairs, NCC, then stated that “Effective March 16th, 2021, USSD services for financial transactions conducted at DMBs and all CBN – licensed institutions will be charged at a flat fee of N6.98k per transaction.

Recall that Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions. This resulted in the accumulation of outstanding fees to the tune of N42 billion for USSD services rendered leading to threat of service withdrawal by the MNOs.

According to the agreements reached, USSD services for financial transactions conducted at DMBs and all CBN – licensed institutions would be charged at a flat fee of N6.98k per transaction, thus replacing the old per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion. This approach, the two regulators said, was transparent and would ensure the amount remains the same, regardless of the number of sessions per transaction.

SiliconNigeria had exclusively on the morning of March 16, 2021 reported that:

  • “That End-User Billing would be scrapped and replaced with Corporate Billing for USSD.
  • It was also agreed that session charging be scrapped for Transaction cost charging.
  •  They agreed on N1.63k floor price and N4.50 price cap while a flat fee of N6.98k will be for the transaction.
  •  Banks will now charge customers for the USSD transaction doing on their accounts and settle the telecom operators.”

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Financial

Ecobank Transnational Incorporated Launches $350 million 10NC5 year Tier 2 Sustainability Notes

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Ecobank Transnational Incorporated Launches $350 million 10NC5 year Tier 2 Sustainability Notes, SiliconNigeria

Ecobank Transnational Incorporated (ETI), the Lomé based parent company of the Ecobank Group has announced that it has successfully raised $350 million Tier 2 Sustainability Notes. This represents the first ever Tier 2 Sustainability Notes by a financial institution in Sub-Saharan Africa.

This Tier 2 issuance is the first to have a Basel III-compliant 10NC5 structure outside of South Africa in 144A/RegS format and will be listed on the main market of the London Stock Exchange. The bond, which matures in June 2031, has a call option in June 2026 and was issued with a coupon of 8.75 per cent with interest payable semi-annually in arrears.

An equivalent amount of the net proceeds from the notes will be used by ETI to finance or re-finance, new or existing eligible assets as described in ETI’s Sustainable Finance Framework on which DNV has issued a Second Party Opinion.

The bank said investor interest for this Sophomore Eurobond issue was global, including United Kingdom, United States, Europe, the Middle East, Asia and Africa, achieving a 3.6x oversubscribed orderbook, of over US$1.3 billion at its peak.

The transaction was anchored at the start by Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), a Dutch development bank, with a committed US$50 million order.

The group chief executive officer of ETI, Ade Ayeyemi, said  “This is a landmark issue for Ecobank, and indeed the success of this first Sustainable Tier 2 issuance is testament to our clear strategy, solid positioning across the pan-African banking space as well as our deliberate and long term focus on sustainable initiatives.

“We are particularly pleased with the diverse orderbook which reflects the confidence investors have in Ecobank to deliver on our commitment to sustainable financing”. The Joint Lead Managers and Bookrunners in the transaction were Citi, Mashreq, Renaissance Capital and Standard Chartered Bank.

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MTN Nigeria Shareholders to Receive N9.40k Dividend Per Share

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MTN shareholders to receive N9.40k dividend per share, SiliconNigeria
  • 18.7% YoY increase from 2019

 Nigeria’s largest mobile telecommunications operator, MTN Nigeria Communications Plc, has announced the payment of N9.40k as final dividend for the year ended December 31st, 2020. This year’s dividend witnessed an 18.7% increase from 2019.

 MTN Nigeria’s Chairman, Dr. Ernest Ndukwe said “Despite the challenging operating conditions during the year, I am happy to report that our company recorded improved performance across all key metrics, creating the shareholder value achieved. This performance demonstrates the success of cost optimisation measures initiated during the year, the strong operational execution of our people and resilience in our business.”

 “Following from our good operating results and in line with our dividend policy, the Board has recommended a final dividend of N5.90 kobo per share to be paid out of distributable net income. This brings the total dividend for the year to N9.40 kobo per share, representing an increase of 18.7%,” he added.

 The dividend would be paid on Tuesday, 8th of June 2021 at the rate of N5.90 per every 2 Kobo ordinary shares and subject to appropriate withholding tax to shareholders whose names appear in the Company’s Register of Members at the close of business on Tuesday, 4th of May 2021.

Earlier in the fiscal year, the firm which joined the Nigerian Stock Exchange (NSE) in May, 2019, had paid an interim dividend of N3.50k, which now brings the total dividend for the year ended 31st December 2020 to N9.40k. The approval was obtained at the Annual General Meeting (AGM) that was held on June 7, 2021 at MTN Plaza, Ikoyi.

 In the 2020 FY, MTN Nigeria grew its earnings before interest, tax, depreciation, and amortisation by 9.7% to N685.7 billion, while the pre-tax profit rose by 2.6% to N298.9 billion and profit after tax rose by 0.9% to N205.2 billion.

 Its mobile subscribers increased by 12.2million to 76.5 million, while its active data users grew by 7.4 million to 32.6 million.

 Karl Toriola, Chief Executive Officer, MTN Nigeria stated that “It’s a great starting point and we will continue to be dynamic and agile to deliver value for the future for our stakeholders, whilst aligning our priorities with national interests.”

 Shareholders commended MTN Nigeria for the profit margin despite COVID-19 pandemic that characterized 2020

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Branch International Deepens Financial Inclusion in Nigeria Via Digital Banking

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Branch International Deepens Financial Inclusion in Nigeria Via Digital Banking, SiliconNigeria
  • Processes N40bn Loans in 3 years
  • offers 20% annual investment returns, free unlimited transfers, instant loans and more

Branch International said in the past three years of its operations in Nigeria, it has processed over N40 billion in over three million loan transactions and remains one of the most downloaded financial apps in Africa.

Branch is founded by Kiva.org founders, an NGO which has raised over $1.5 billion in zero interest interest capital for global financial inclusion. It is one of Africa’s most downloaded digital banking apps with over 20 million downloads across Nigeria, Kenya, Tanzania and India, restating its commitment to driving financial inclusion in Nigeria.

The company is achieving this by leveraging technology to offer a range of unique financial services to customers which was announced recently at a virtual round table held in Lagos. According to Branch, the quest to make formal financial services accessible at an affordable rate to individuals and businesses is critical in systematically driving economic development. Thus, their unique range of offerings are designed to offer value to customers whilst enabling them make payments and granting access to loans and investment opportunities.

These product features include: free and unlimited money transfers, free bills payment and airtime purchase; a 20 per cent annual investment returns (one of the highest in Nigeria) without any withdrawal restrictions – investments made through the Branch app are channeled into low-risk financial instruments with capital preservation as the ultimate goal, and; instant loans up to ₦500,000 in minutes with no paperwork or collaterals required and no late charges.

The managing director, Branch Nigeria, Adedayo Ademola, said, “At Branch, it is our commitment to keep up with our objective of leading the way in digital banking, in order to improve the financial wellbeing of Nigerians, unlock the greater potential within the financial services sector and promote seamless banking across the country. Our approach as a mobile-only digital bank is deeply rooted in us prioritizing the convenience, satisfaction and safety of our customers”. 

“With Branch’s suite of unique products, we are consistently pushing the envelope by offering customers valuable services beyond the conventional banking needs thereby making a meaningful impact on their lives. Branch remains perfectly poised to take on the challenge of providing access to affordable financial services for all”, she added. 

For this, the founders have received global media recognition and several awards including being listed in Fortune 40 Under 40. With support from world-class investors such as VISA, IFC and Andreessen Horowitz, Branch continues to deliver superior customer value. 

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