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Stay Ahead of Your Competitors With These Tips

The old adage, “If you’re not first, you’re last,” couldn’t be further from the truth when it comes to business success. Being first-to-market may have its advantages, but long-term success is not a race – it’s how you make a product or service better than that of your competitors. And “Better” can mean anything from the product or service itself to customer service, pricing, or marketing strategy.

“Without a robust and resilient innovation strategy, no company can survive,” says Phil McKinney, CEO of CableLabs. In just about every industry and just about every career, the creator of the Purple Cow enjoys the profits, the accolades, and the feeling of omniscience that comes with a success. So how do you stay ahead of your competitors and ensure that you are successful?

Stop trying to copy the business model of your rivals

You will only achieve success if you run your business on your own terms, and not fall prey to chasing after rivals in your industry. As soon as you stop following your own path and start copying your competitors, you could find yourself even further behind than when you started. You have your own unique strategies, resources, and capabilities so you need to stay true to your business model that optimizes them in the best possible way.

Stay ahead of your competitors with these tips

Make innovation your best friend

Being a small business owner means always finding novel ways to enhance your business. The companies that fail are the ones that become stagnant, relying on methods that can become outdated. Eventually, as their competition becomes more efficient, they leave these businesses behind. Don’t let that happen to you. Use the tips in this article to ensure that you remain ahead of your competitors.

Expand your offers – a market that’s already crowded has less scope for expansion. It is essential to offer something unique to your customers in order to build your own niche and minimize the existing competition.

Be the best employer

Skilled, motivated employees underpin vibrant, growing businesses. Attracting them means more than paying a competitive wage. People are often more impressed by a good working atmosphere, and benefits such as flexible working and structured career development.

Identify and solve the pain points of your customers

Ask open-ended questions to find exactly what your customers want while using your products or services. The key here is to provide solutions to the prospects and supply them what they need as opposed to selling them what you want to sell. You only need to fulfil the need, not "sell" anything. Your product or service will automatically start to sell more the moment you fill the void that your competitors are lacking.

Get the pricing correct

Perfect pricing strategy revolves around marketing psychology. Before you set your own pricing strategy, it is essential to know the competition. You must identify who is offering the best value for money. The price you set should be standard and must have a competitive advantage. A great pricing strategy does not always mean lowering the prices of existing products in order to win more customers. Every market is divided into three segments – the lower, middle and upper class. The first step is to identify the class you are targeting. Once you get an answer to that, it will be much easier to set a price that your audiences will love to pay.

 

Improve your customer service

People love businesses that provide exceptional customer service. If you delight your customers with great service, you will make loyal customers who will refer your business to their family and friends. Hire staff who have a good understanding of your products or services. Ensure that they remain patient and provide satisfying answers to every customer query. Your staff should greet customers with a pleasing smile and must show gratitude. Your customer care team should always remain courteous and respectful.

They must always be responsive to customer queries. They should have a problem-solving approach and always ask for customer feedback. Customer-centric companies are powered by dependable staff who raise the level of customer satisfaction. You can also consider offering freebies that competitors don’t.

Target new customers

Retaining your customer will help you build a loyal consumer base. However, if you want to grow your business, you’ll need to attract new customers. In this rapidly changing economy, you may wake up one day only to find that your so-called loyal consumer base is busy shopping elsewhere. There is no guarantee that they will keep coming back for more forever. A steady flow of customers will keep your business healthy.

More favourable opening hours

Whether you go 24/7 or just open Saturdays when your rivals are shut, making a customer’s life more convenient and shaping your business around their lifestyle is guaranteed to bring them through the doors, and this is a vital part of building competitive strategy.

Show your personality

There is true value that comes from turning the customer experience into a personal one. When people are able to put a face to the business, it naturally leads them to form an emotional connection that simply doesn’t happen when they walk into a big retail store. Share your business story. Discuss why you got into the business in the first place. Talk about why your service is unique. In short, reinforce the emotional side of things and you’ll see how your customers will begin to feel a real connection to your business.

Stay ahead of your competitors with these tips

Conclusion

Healthy competition is always good as it keeps pushing you to do better. Therefore, you should not shy away from competing. Nevertheless, you should arm yourself with the best of tools that can help you in staying ahead. Business is a never-ending battle that makes you learn new things each day. You must be ready to face any challenges or situations

Source: nairametrics

CBN Retains Benchmark Interest Rate at 13.5%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Friday announced the retention of its Monetary Policy Rate (MPR) at 13.5 percent.

This announcement was made by Governor of the CBN, Mr Godwin Emefiele, while addressing newsmen in Abuja on outcome of the two-day meeting of the MPC, which started yesterday.

According to the apex bank chief, the committee decided to leave the benchmark interest rate unchanged in order to monitor developments in both the global and local spaces.

The central bank further said the MPC agreed to leave the asymmetric corridor at +200 and -500 around MPR, liquidity ratio at 30 percent and the Cash Reserve Ratio (CRR) at 22.5 percent.

CBN Explains How Banks Will Deduct New Deposit Charges

The Central Bank of Nigeria (CBN) recently announced the imposition of 2% charges on bank deposits above N500,000 in addition to already existing charges on withdrawals.
The development is part of the central bank’s plan for nationwide implementation of the cashless policy which will begin by March 31, 2020.

The apex bank made this known in a circular to all Deposit Money Banks (DMBs) in the country on Tuesday, September 17. The new policy has, however, been condemned by many Nigerians who believe it is obnoxious.
Also, the policy has generated some confusion as many seek to know how Deposit Money Banks (DMBs) will be deducting the charges. This prompted the central bank to provide further explanation regarding the new charges.

According to the apex bank, the charges on deposit and withdrawal on the savings account will be carried out on the excess of the limit it has set.

The Central Bank of Nigeria (CBN) recently announced the imposition of 2% charges on bank deposits above N500,000 in addition to already existing charges on withdrawals.
The development is part of the central bank’s plan for nationwide implementation of the cashless policy which will begin by March 31, 2020.

The apex bank made this known in a circular to all Deposit Money Banks (DMBs) in the country on Tuesday, September 17. The new policy has, however, been condemned by many Nigerians who believe it is obnoxious.
Also, the policy has generated some confusion as many seek to know how Deposit Money Banks (DMBs) will be deducting the charges. This prompted the central bank to provide further explanation regarding the new charges.

According to the apex bank, the charges on deposit and withdrawal on the savings account will be carried out on the excess of the limit it has set.

Source: legitng

Experts, OPS Pick Holes in CBN’s Cashless Policy … Say Charges’ll Increase Burden of Bank Customers

Experts and stakeholders have picked holes in the implementation of the Central Bank of Nigeria’s cashless policy, with the imposition of charges on cash deposits and withdrawals.

Some experts, who spoke to our correspondents in separate telephone interviews on Wednesday, said that the charges were unnecessary as they added to the burden that customers already bore.

Some other experts urged the apex bank to review downwards the cash handling charge on daily cash withdrawals that exceed N500, 000 for individuals and N3m for corporate bodies.

The apex bank had in a circular to Deposit Money Banks stated that from Wednesday, September 18, it would impose three per cent processing fees for withdrawals and two per cent processing fees for lodgements of amounts above N500, 000 for individual accounts.

For corporate accounts, the apex bank said that DMBs would charge five per cent processing fees for withdrawals and three per cent processing fee for lodgements of amounts above N3m.

The apex bank said charges were introduced to drive development and modernisation of the country’s payment system in line with the vision 2020 goal of being amongst the top 20 economies by the year 2020.

Too many charges can discourage savings

But reacting to the development, finance experts said that the move would discourage the culture of savings among Nigerians.

The Registrar, Chartered Institute of Finance and Control of Nigeria, Mr Godwin Eohoi, called for a downward review of the charges to 0.5 per cent for individuals and 1.5 per cent for corporate organisations.

He said bank customers were already suffering the burden of various charges from DMBs for carrying out various banking transactions.

He gave some of the charges as card maintenance fee, Automated Teller Machine withdrawal charge, stamp duty, Commission on Turnover and SMS alert.

Eohoi said with all these charges, it would be unfair for the apex bank to impose additional charges on cash withdrawal and deposit in a bid to promote cashless economy.

He said, “The move by the CBN to promote cashless policy is commendable because it has some benefits such as reducing the amount spent by the apex bank in cash management.

“However, the Nigerian economy is still fragile and at a time when the CBN is promoting financial inclusion, it would not be fair to impose additional charges on bank customers that are already overburdened with different types of charges from banks.

“The cash deposit and withdrawal fee announced by the CBN is too high. They should reduce it to 0.5 per cent for transactions involving individuals and 1.5 per cent for corporate companies.”

A former Director-General, Abuja Chamber of Commerce and Industry, Chijioke Ekechukwu, said the imposition of the charges should be reviewed downwards considering that many Nigerians were still unbanked.

He said, “The policy is aimed at reducing cash transactions and if you reduce cash transactions, it becomes easier for banks and CBN to manage cash.

“Each time cash is moved from one location to another, it involves a lot of costs. So, this cashless policy will help the CBN and the Nigeria Financial Intelligence Unit to track transactions.

 

“Above all, it may not ultimately reduce the need to withdraw cash. When the benefit of the cash you are going to pay is far above the charges you are going to get, then you will definitely ignore the charges, withdraw the cash and make the payment.

“If they maintain the kind of charges and remove automatically what they call maintenance charges, stamp duty and others, it will help to promote the cashless policy.”

 Greatest impact on small business – NECA 

The Nigeria Employers Consultative Association and the Lagos Chamber of Commerce and Industry said the latest charges would increase the burden on bank customers.

It said that the implementation of the policy would signal the imposition of charges on deposits in addition to already existing charges on withdrawals.

The Director-General, NECA, Mr Timothy Olawale, who though said the directive was purportedly to move the country into a cashless economy, and reduce crime involving cash, said there should have been enough notice before implementation.

Olawale added that it would also have the greatest impact on retail businesses and other medium-scale retailers in the Fast Moving Consumer Goods sector.

He said, “Though the overall aim of reducing cash transactions is good, the policy will, however, increase the cost of doing business and force organisations and individuals to start multiple deposits and withdrawals in order to beat the charges.”

Implementation notice too short – LCCI

On his part, the Director-General, LCCI, Mr Muda Yusuf, said the notice given by the CBN was too short and that it would have disruptive effects on bank customers and other stakeholders. He suggested a much longer notice.

He said, “The latest circular by the CBN should have given a much longer notice to economic players. The notice given for the effective date is extremely short. The circular was dated 17th of September while the effective date was 18th of September.

“This is just a notice of one day.  This would have short-term disruptive effects.  We implore the CBN to give at least two months to allow for players in the economy to adequately prepare themselves. This is particularly so for investors who are major players in the retail segment of the economy.”

While he noted that it was difficult to justify the decision to penalise cash depositors, he said the emphasis of the policy should be on discouraging cash transactions and withdrawals, which was more in consonance with its objective.

Policy could spur multiple withdrawals and deposits

A professor of economics at the Department of Economics, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Sheriffdeen Tella, also decried the new policy, stating that it was contradictory to the cashless policy mantra of the CBN Governor, Godwin Emefiele.

While he noted that there already existed many charges heaped on individuals and corporate clients by banks through withdrawals and management of accounts, among others, he said the addition would be an overkill.

He said the directive would only encourage multiple withdrawals and deposits, in order to beat what it aimed to achieve. He described the new policy as favouring commercial banks and disfavouring their customers.

He said, “The charges are becoming too many that people may decide not to take their money to the banks anymore. They may begin to look at other options.

“The new charges will not in any way encourage the cashless policy the CBN is trying to promote. I see it more as being contradictory.

“Government should look at other ways of making money for the banks.”

CBN, FIRS directives contradicting

Maritime logistics expert and the Chief Executive Officer of Hermonfield, Mr Tunji Olaosun, said there was a lot of contradiction in the directives coming from the CBN and the Federal Inland Revenue Service.

He said, “It appears they don’t talk to themselves because of the conflicting signals coming from them.

“From the CBN’s instruction, it shows that the CBN wants to discourage cash transactions and encourage cashless transactions. But at the same time, the FIRS is saying it will impose tax on transactions done online.

“So in essence, if we carry cash, CBN penalises us; if we do cashless, FIRS taxes us. So, which one do they want us to do? Both are agencies of the Federal Government which means the ministry they are confusing Nigerians.”

 

Olaosun, who is also an Information and Communications Technology expert and the co-founder of Flink Teshnik Concept, suggested that the Minister of Finance should come out with a clear-cut directive to resolve the confusion.

The National Coordinator, Save Nigeria Freight Forwarders, Dr Osita Chukwu, condemned the policy in strong terms.

He said the government was bent on imposing more hardship on Nigerians with the recent policies that were being churned out.

“He said, “First, they increased Value Added Tax; then they are now imposing charges on both cashless and cash transactions.

“The reason is because they get everything free. They don’t buy fuel, they don’t pay for amenities. Why won’t they impose more hardship on tax payers who are funding their lifestyle?”

Implement aggressively, reduce PoS transactions’ costs

The Managing Director, Financial Derivatives Company Limited, Mr Bismarck Rewane, who was recently named in President Muhammadu Buhari’s Economic Advisory Council, said the initiative should be lauded as it aimed to further drive the CBN’s cashless policy.

According to him, the CBN cashless policy should have been more aggressive and long implemented with full force.

He said, “I think that anything to encourage people to use electronic means of banking is good. If you go to advanced countries, even in Kenya, nobody carries cash.

“Cash is unsafe and it impedes regulation of circulation of money. Anything the CBN is doing on cashless policy should be supported. As a matter of fact, I am surprised that they confined it to only about five states.

“The CBN ought to step up and actually extend it to other places; but this is like a pilot, I guess. It is a way of making sure that people drop cash migration to electronic payments.”

Rewane said the charges on PoS transactions should, however, be reduced, but not abolished in order to drive financial inclusion.

Make online, PoS transactions free

The Managing Director/Chief Executive Officer, Cowry Asset Management Limited, Mr Johnson Chukwu, said, “The fact that we are also imposing taxes on online payments is a negation of the drive to encourage people to move away from cash.

“At this point in time, we should make all online transactions free of taxes so as to encourage that migration in terms of cultural orientation.

“Our culture is that we use cash to make payment. So if you want people to move away from cash, we need to remove charges on electronic payments.

“If you impose tax on electronic payment, and at the same time you are also imposing charges on cash deposits and withdrawals, you will basically be pushing people to begin keeping their cash at home.

“Given the overriding need to encourage cashless transactions, the government or the CBN and the tax authorities should avoid, in the meantime, imposing taxes on electronic payment platforms and allow that sector to mature.”

A professor of finance at the University of Lagos, Sunday Owualah, said the CBN initiative would definitely not augur well because presently, any transfer or third party deposit into any current account attracted a stamp duty of N50.

Source: punchng

Increasing VAT is Not The Ultimate Solution to Nigeria’s Revenue Problem

Nigeria’s finance Minister, Zainab Ahmed, recently admitted that Nigeria has a revenue problem. That was a euphemistic method of describing Nigeria’s current predicament.

Since 2015, national expenditure has doubled but the nation has continuously failed to meet revenue targets, necessitating the need to incur debt to meet the government’s obligations.

The reasons for Nigeria’s declining revenue are not farfetched. Nigeria derives the bulk of its government revenue and foreign exchange earnings from oil exports. However, the inflow of petrodollars has steadily declined in recent years owing to a fall in the price of crude oil from a peak of $113 per barrel in 2012 to around $60 in 2019. A situation which has resulted in the inability of the government to meet revenue targets.

To make up for the shortfall, the government has attempted to increase revenue generated from taxation, with the number of taxpayers doubling since 2015. Nevertheless, there remains a gaping hole in the nation’s coffers necessitating the need for heavy borrowing to make up the revenue shortfall.

However, Nigeria’s revenue shortfall is only half of the problem. The state of the government’s expenditure also leaves more to be desired. Currently, the government expends most of its earning on debt servicing with data from the Debt Management Office (DMO) revealing that 60 percent of government’s revenues goes into debt servicing. What is left goes into public administration, particularly paying salaries of public servants and government employees. It is therefore not difficult to deduce that not only does Nigeria have a revenue generation problem, it has an equally seriously problem with expenditure management.

It was therefore unsurprising that last week’s announcement of a proposed increase in the Value Added Tax (VAT) rate from 5 percent to 7.5 percent has been met with condemnation. While the federal government’s desire to increase the VAT rate is understandable, given that Nigeria not only has one of the lowest VAT rates in Africa, but also one of the world’s lowest ratios of tax to GDP; increasing the VAT rate in current circumstances is illogical at best.

In an economy which still grapples with the aftereffects of the recession it suffered in 2016, as well as spiralling unemployment and a low growth rate, increasing taxes is counterproductive to economic growth.

Typically, nations struggling with low economic growth and other forms of macroeconomic pressure tend to reduce tax rates in order to spur production and boost consumption, Nigeria instead has done the opposite. By increasing the VAT rate, the government is directly increasing tax burden on companies and consumers, thus reducing disposable income available for consumption of goods and services. This is far from ideal for the growth of the economy.

In addition, contrary to the rhetoric emanating from the government that the increase in VAT has no effect on poor people, the VAT is a regressive tax which affects the poor more than it affects the rich. Basic commodities including food, transportation etc. will invariably become more expensive, with the severest effects suffered by the nation’s poor. In a nation already adjudged the poverty capital of the world, a policy which results in higher cost of living should be the last on the government’s agenda.

Therefore, rather than increase the VAT rate or introduce new ones, the government’s priority should be improving tax collection. Currently, Nigeria ranks as one of the nations with the largest VAT gap in Africa. This implies that the government currently does not collect as much VAT as it should lends credence to the opinion that the focus should be on improving tax collection, not increasing rates.

There is an urgent need to improve the nation’s tax collection system such that the informal sector is adequately captured while also expanding the nation’s tax base to cover more taxable persons.

Furthermore, rather than increase the VAT rate, the government should be focused on addressing structural deficiencies in the macro economy, as well as improving the ease of doing business across the nation. Both acts will help to engender economic growth and ensure the successes of businesses, two scenarios which will expand the economic pie and result in higher tax revenues to the government, without destroying the spending power of citizens and bottom lines of businesses.

Also, perhaps there is a need to drastically reduce government expenditure.

In summary, Nigeria has a revenue problem. However, there are no short-term solutions to this problem. Increasing taxation without addressing the underlying fiscal and structural issues might increase government revenue in the short run but will ultimately render the Nigerian people and nation worse off in the long run.

Source: Businessdayng

Weaker Naira, Oil Price Too Risky for Access Bank

One of the renowned rating agencies in the world, Moody’s Investors Service, has warned that Access Bank Plc, which it described as being solvent, could get into a serious trouble if the Central Bank of Nigeria (CBN) makes any attempt to devalue to Naira.

In a report titled Access Bank’s first post-merger results show solvency progress, a credit positive, Moody’s said a weaker local currency and declining oil prices at the international market are no way favourable to the tier-one lender because of its exposure to loans in the oil and gas sector.

“Access (Bank’s) asset quality remains vulnerable to an oil price decline or a depreciation of the Naira, the local currency, because of its high exposure to the cyclical oil and gas sector and foreign currency-denominated loans,” the report released on Thursday, September 12, 2019, stated.

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Business Post reports that in the report, Moody’s pointed out that 35 percent of Access Bank’s loan book was denominated in foreign currencies, “exposing the bank’s clients that do not earn foreign currency revenue to high risk of default on their foreign currency loans.”

It stressed that from the bank’s recently released half-year results for the period ended June 30, 2019, 30 percent of its gross loan was owned by customers in the energy sector, with these debtors also responsible for more than half of the bank’s Non-Performing Loans (NPLs).

However, the report said it was optimistic that Access Bank was capable of surviving the storm going by its post-merger performance.

In March 2019, Access Bank completed the merger with the defunct Diamond Bank, which had huge bad debts, but in the six-month financial statements, the lender cut its NPLs to 6.4 percent, despite absorbing a huge NPL portfolio of 40.4 percent from Diamond Bank, which were not fully provisioned for.

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According to Moody’s the NPL ratio of the newly merged institution dropped from 14.1 percent as of January 2019 to 6.4 percent as of June 30, 2019, with the agency saying that the bank increased its covering for NPLs which would allow it to take out more bad debt in the coming future.

“A lower NPL ratio will provide the bank with room to grow its assets, supporting revenue growth,” the rating company stated.

Also, Moody’s said it observed that Access Bank’s net value reduced from 10 percent to nine percent, implying a one percent reduction in the size of what a shareholder can receive when the commercial lender’s total assets are deducted from its total liabilities – an indication of the bank’s value.

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The report noted that the expected net value of shareholder equity to asset ratio of a financial institution of Access Bank’s standing should be a minimum of 13 percent.

It added that the lender’s Net Interest Margin (NIM) improved from 5.6 percent to 7.6 percent between June 2018 and June 2019, indicating an improvement in the investment decisions of the bank when compared to its debt standing.

Source: businesspostng

How Federal Government Plans to Increase VAT to 7.2% affects you

In a bid to increase government revenues, the Federal Executive Council has approved plans to increase Value Added Tax (VAT) from 5% to 7.2%. This represents a 44% increase (VAT has remained at 5% since January 1, 1994, when it became active).

This was made public in a series of tweets by Tolu Ogunlesi, the President’s Special Assistant on Digital and New Media.  

According to Tolu, this was one of the decisions taken at the Federal Executive Council meeting held on Wednesday at the Presidential Villa Abuja. Nigeria collected about N1 trillion in VAT in 2018. A 44% increases could generate over N400 billion in additional revenue for the government if everything remains constant.  

In a series of tweets Tolu reported as follows;  

  • The government wants to increase VAT from 5% to 7.2% 
  • The announcement kickstarts the commencement of the process for increasing VAT. This does not mean VAT will be automatically increased.  
  • For VAT to be increased, the National Assembly will have to approve it and pass an amendment to the current VAT ACT following which the president will append his signature. 
  • The process could take months if not years. 
  • Tolu also confirmed that part of the process will involve “extensive” nationwide consultations  
  • Consultations will mostly be with the organised private sector, Nigeria Labour Congress and other labour unions, foreign investors and multilateral organisations, media, state governors and members of the National Assembly. 

Government Revenue: Nigeria is widely believed to be facing a revenue crisis following the drop in oil prices in 2014. Since the Buhari administration assumed power in 2015, government revenue has failed to hit the heights of the immediate past administration which was over N12 trillion.

In 2018 total revenue accruing to the Federation Account was about N7.1 trillion compared to budget of N10.4 trillion. It was worse in 2017 at about N4.9 trillion. VAT revenues are also a significant portion of government revenues. In 2018, total VAT revenue accruing to the Federation account was N1.04 trillion or 14% of revenues.  

Dire straits: The Federal Government is in a more precarious situation. Last year it budgeted N7.1 trillion as targeted revenue and only actualized N3.8 trillion in collection.

  • Out of this amount, VAT collection was about N146.5 billion (target N207.5 billion).
  • Though the Federal Government relies less on VAT it still needs as much as it can get for itself while helping out states scoop more money.
  • States & Local Government collect about 75% of VAT leaving the Federal Government with 15%.
  • The Federal Government makes more money from its share of Company Income Taxes and Custom Import duties where it collected N660 billion and N296.7 billion respectively. Total non-oil revenue was about N1.1 trillion. 

How VAT affects you: Nigerians will have to wait to see how the consultations pan out over the next few months. If the FG is able to convince various stakeholders, then it could likely sign the act amending the increase. Implementation could be January 1st, 2020 just like it was in 1994.

  • There will be major push backs from Unions who have also just secured increases in the minimum wage.
  • Unions could call for a lesser increase reducing it from 7.2% to anything else above 5%.
  • Nigeria has one of the lowest VAT rates in Africa.
  • VAT is a consumption tax and it is borne by the final consumer who is mostly an ordinary citizen of Nigeria.
  • In addition to VAT Nigerians also pay personal income tax, withholding taxes and sales taxes as collected by some state government (Lagos especially).
  • They will be most hit by a raise as their disposable income will be dented further.  
  • The Executive Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, also recently reiterated that the payment of VAT on VATable online transactions is required by the law.
  • If this increase is passed by law there will likely be an increase in online transaction cost.
  • Nigerians will see an increase in nearly all items except the 11 items that are currently exempted (see page 14).
  • Corporations are merely collecting agents for the government and only incur a VAT cost when they are final consumers or fail to net off their VAT from purchases from VAT on sales.

Source:  Nairametrics

Naira Performance Picks Up on Tuesday

The performance of Naira was stronger on Tuesday than it was at the previous trading day at the foreign exchange market.

The local currency proved just that against the American Dollar at the Investors and Exporters (I&E) segment of the foreign exchange market yesterday by appreciating by 28 kobo or 0.10 percent to close at N361. 80 from N362.08 recorded on Monday.

Total trade at the I&E segment went down by $21.92 million or 11 percent to $174.59 million on Tuesday from $196.51 million recorded in the previous session.

The Naira also closed stronger at the Central Bank’s interbank segment of the market as the Naira/USD rate also appreciated by N0.05 or 0.02 percent to trade at N306.85 from N306.90.

The local currency closed strongly at the parallel market against the British Pound Sterling as the Naira traded at N446/£1 against a single unit of the British currency note, appreciating N1 following the previous day’s N447/£1.

Against the US Dollar, the local currency closed at N360/$1 against the greenback as it did in the previous trading day.

The Naira followed the same manner with the Euro at the close of Tuesday’s trading as the local currency remained flat at the end of the trading day at N395/€1.

Source: businesspostng

Here’s What Estate Agents Do To Earn Their Commission – And Other Home Selling Costs You Should Know About

While agent’s commission is often one of the first cost considerations that sellers think of when it comes to selling their home, there are other costs that sellers and buyers need to keep in mind as well.

Trevor Sturgess, MD of Seeff Kibler Park, encourages his clients to look carefully at the other costs involved with selling. He said besides agent’s commission – usually set between 6% and 8% plus VAT of the selling price – sellers will also need to pay the following:

  • Bond cancellation: This is the cancellation fee payable to the bond attorneys representing the bank that is used. Sellers can save costs by letting the bank know that the property is for sale as soon as the property is listed. Your agent will be able to advise how.
  • Compliance Certificates: These include the Electrical Certificate of Compliance (COC) and can cost anything from R1200 upwards, depending on the amount of work that is needed. Also keep in mind that an electrical COC expires after two years.

Another certificate that the seller is required to provide is an Electric Fence Certificate that costs around R2,000 or more depending on any work that needs to be done. If you received a certificate when the electric fence was installed this will suffice.

Plumbing Certificate and Beetle Certificate are also required in some instances. These are to ensure that the plumbing is in order and that there are no insect infestations in the home. Cost is to be quoted for.

  • Municipality final figures: As the seller you will need to pay around four months extra on your rates and services. You can however claim back a portion of this after the property has been sold.
  • Relocation costs and administration: Moving trucks, breakages, the administration of informing people of your change of address and taking days off work to coordinate the move should also be considered. Moving can add to your stress levels significantly.
  • Sectional title clearance figures from the Body Corporate (for sectional title units): This could be a Special Levy which needs to be fully paid before the Body Corporate will issue a clearance certificate.

The followings costs are to be covered by buyers:

  • Transfer costs to the transferring attorney.
  • Transfer Duty: This is a tax to the government on properties over R900,000.
  • Bond attorney costs: The buyer must pay the lawyers handling the mortgage finance for the bank.
  • A bond initiation fee of around R6,000 plus VAT that is payable to the bank granting the bond. “Banks often add this figure to the bond amount. My advice is to pay extra into your bond every month to bring it down faster,” said Sturgess.
  • A municipal deposit payable to the municipality when opening the account. You should open the municipal account as soon as possible – usually between one and two months after registration.

“Buying a property of R1.5 million with a 100% bond will attract transfer fees as mentioned above of around R88,000,” said Sturgess.

How agent’s commission is determined and what agents do to earn their commission.

Steve van Wyk, Seeff’s MD in Centurion, said while agent’s commission is often set at around 7% of the value of the property plus VAT, sellers and agents can always choose to negotiate a set fee instead.

“While it may seem like a practical and affordable idea to privately advertise your property instead of using an agent, this decision could end up costing you a lot of time and much more money than what the agent’s commission would’ve been in the first place.

“Agents perform various duties and have knowledge of legislative procedures that an owner will not necessarily even be aware of,” he said.

“Not only do they negotiate for the seller and connect the seller with strategic partners like conveyancing attorneys, but they also research recent sales in the area in order to determine a realistic listing price, advise on repair work that should be undertaken prior to listing, create a marketing plan that works for the seller and screen suitable purchasers before introducing them to the property amongst others.”

Source: Buisnesstech

FinTech Wars: Access Bank Reveals How Much it Lends Daily as Payday Loans

The MD/CEO of Access Bank Plc, Herbert Wigwe revealed the bank has set a daily target of N400 million loans daily to at least 20,000 customers. Mr. Wigwe made this comment during the bank’s investor and analyst call on Monday, September 9th, 2019.  

Competition: Nigerian Banks are in stiff competition with FinTech startups over what is regarded as the highly lucrative Quick Loan Segment. FinTech’s startups with a huge financial war chest from patient investors have deployed their cash towards marketing and tech innovative products that have changed the way borrowers receive money via loans.  

Currently, Nigerians who qualify for these loans can obtain them between 5 minutes to less than a day with no collateral or documentation. Some obtain the loans via native mobile apps owned by the FinTechs relying only on their phone numbers as documentation. These aggressive initiatives have put the banks on the defense, resulting in the release of competing quick lending products. 

Target: Access Bank claims its Quick Loan Scheme or Payday Loan (as the bank calls it) disburses about N200 million daily to 4,600 customers and the bank is eager to double that number to N400 million and 20,000 customers by end of the year.  

We have also grown our digital loan business as far as our financial inclusion and normal traditional retail strategy by expanding on our digital lending capabilities to include more products such as salary advancements, small tickets, personal loans and device financing in addition to what we call our payday loans.

And all of this is done on our QuickBucks application which basically houses all of these products. Today we are disbursing on average ₦200 million to 4,600 different customers through the click of a button daily. And we have set for ourselves a target of about ₦400 million daily to at least 20,000 customers, and we are on course to achieving this. This basically generates very low NPLs and is properly priced because a lot of it goes to customers who have their salary accounts 

Charges: Access Bank charges an upfront fee of 1% flat, 4% flat interest and insurance of 0.15% of the loan amount is taken upon loan disbursement (5.15% total all payable upfront). The loans are for 31 days.Average all-in lending cost in the market is between 4-6% monthly.

On the offensive: Access Bank also claims it has been aggressive with the marketing of its payday loans and has now booked about N18 billion in the first half of 2019 alone from N11 billion a year earlier. The CEO also claimed the bank has issued out about 1 million unique loans as at June this year.  

Default rates: Quick lending loans are highly susceptible to default risks so we sought to know what the bank’s response what. They reported that default rates for its payday loans are below 3% claiming that in most cases it is 0%. Explaining further, they assert that the reason for the low default rates was because their borrowers were salary earners who already have accounts opened with the banks and their salaries domiciled in those accounts.  

So for the digital loan book, which is largely dominated by payday loans at the minute, the NPL ratios there have typically been well below 3%. Now, the reason for this as Herbert alluded to earlier on is they are based on customers who already have their salaries with us. Therefore, typically the loans do not go bad in the traditional sense. In some cases, you might find the occasionally delayed salary payment, for that period we might see an inching up in the NPL ratio. But the NPL when you get the salaries as you know is going to be very low for a long time to come. So those are the kinds of ratios you have seen. There are periods when it is 0%. Almost every employer has fully paid up the salaries. When there are delays in payment typically in some cases it can take three or four months for those salaries to come through. Eventually, they come through and the NPL again trends to 0%. 

On the bank’s website, they highlight that you do not need to have a salary account in Access Bank for you to access the Payday loan. The bank claims you will, however, need to open an account in the bank for the loan to be disbursed.

What this means: Nigerian Banks may not be nimble, but they have the financial muscle to engage in a long-drawn battle in the quick loan space.

  • While stifling regulations and inroads into this space by deep pockets like MTN remains a huge threat, their acquisition route is shorter as most of the borrowers are already customers within the bank.
  • Access Bank claims it has 31 million customers and acquires at a rate of 500,000 new customers daily relying mainly on digital means and its agent banking initiative.
  • Access Bank has signed up about 1.6 million new customers since it merged with Diamond Bank.  

Source: nairametrics

 

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