Dr. ‘Biodun Adedipe, founder and Chief Consultant of B. Adedipe Associates Limited (BAAConsult), has said banking in Nigeria is as sophisticated as anywhere else in the globe, as according to him, the country’s banks have gone far in the financial technology space.
Adedipe who spoke at the Finance Correspondents Association of Nigeria (FICAN) Half-Year Economic Review and outlook for the banking sector, said improvements in some economic indices and the resilience of the banking industry in the last five years.
He noted that Nigerian banks are doing well in the digital space supported by deepening internet penetration, large youthful and rapidly growing population, rapid urbanization, strengthening innovation culture driven by survival instinct and increasing attention to competitive strategy.
According to him, critical future and forward thinking order of the day and banks are already competing against large powerful shadow banking systems.
He however, emphasized the need for the lenders to do more because they are facing extensive competition from Silicon Valley both in the form of Financial Technology (FinTech) companies and big tech companies like Amazon, Apple, Facebook, Google and now Walmart that is here to stay.
He observed that the Nigerian banking industry grew double digit in the last five (5) years, demonstrating effective marketing.
According to him, with loan-to-deposit ratio averaging 70.4per cent, banks that are below prescribed maximum have room to expand lending, but the challenge then is how the lending environment can be de-risked, especially lending to Medium, Small and Medium scale Enterprises (MSMEs).
“There is no sector you operate in, in the Nigerian economy that there is no space for you to thrive, if you do the right things, at the right places, and right time, for the right person and with most things now digital,” Adedipe said.
He emphasized that the downward trend in all indices: price, production and export is a warning sign for Nigeria and is a sign of the urgency of diversification of foreign earnings.
Adedipe however, advised authorities to take pragmatic steps to save the economy that is already in crisis.
According to him, with a monthly import bill of N2.283 trillion or $6.025 billion in the first quarter (Q1) 2021, liquid external reserves of $32.85 billion( as at July 9, 2021), represents 5.45 months of import, meaning that Nigeria is below the minimum threshold of 6 months of imports for stability and twice below eleven months required for an economy in Crisis.