Mr Eddie Osarenkhoe, a former President of Finance Houses Association of Nigeria (FHAN), on Wednesday reiterated the call by Central Bank of Nigeria (CBN) on the use of corporate bonds in tackling fund challenges in the sub-sector.
Osarenkhoe told news reporters in Lagos that raising funds from the bonds market would help to boost finance houses’ operations and allow the industry to be more active than now.
He said the tasks involved in raising funds from the capital market could be challenging, but its benefits outweighed sourcing from private sources.
“The idea of using corporate bonds to source for funds is a new idea which is good.
“The CBN has now said we could raise funds through corporate bonds and this arrangement will help in tackling the challenges with sourcing of funds,” Osarenkhoe said.
He said that some organizations were already considering the option as a strategy for tackling the challenge of paucity of funds confronting the sub-sector.
The financial expert also said that the establishment of credit bureaux had contributed positively to the growth of the sub-sector.
According to him, the existence of the credit bureaux allows finance companies to conduct credit search on prospective customers before giving out loans.
Osarenkhoe said the bureaux had also contributed to improvement of loan repayment from customers because their details could easily be assessed by any other finance institution for same purpose.
The Director, Other Financial Institutions Supervision Department (OFISD) Of CBN, Mrs Tokunbo Martins, in May gave the recommendation at a stakeholders’ luncheon.
The luncheon was organized by Crownrise Finance Plc to introduce its N1 billion corporate bonds tagged “Crownrise Finance Bond’.
Osarenkhoe said one of the major policy thrusts of the finance companies was to operate within the middle-tier of the financial system with a focus on the Small and Medium Enterprises (SMEs) segment.
Amaka E. Nliam