I am apolitical. I derive pleasure in watching politics and politicians. The American politics is a delight. A few weeks ago, Donald Trump was riding on a wave and blowing a trumpet. Then, he escaped an assassination attempt. Then Joe Biden kissed the presidency goodbye. Then Kamala Harris entered the race. Now that Harris is standing toe-to-toe with Trump, the battleground has shifted. The electorate has shifted. This has altered the scenarios.
Reports said America is becoming more diverse and educated. Now the Swing-States Dial has seen shifts in the seven battleground states. This will alter the outcome of the presidential election. Who is your candidate?
On The One Hand
Well, the battleground has also shifted in the business world. Despite fierce competition from Fintechs, some bank customers and corporate entities are entrusting their funds to the safekeeping of the banks. Reports have shown that the total deposits in the banking sector increased to N115 trillion in the year 2023. This is about 63 per cent growth from N70.5 trillion reported in the year 2022.
On The Other Hand
Reports indicated that low-cost deposits are increasing even with the challenges of the Fintech firms. This is evident. MoMo Payment Service Bank from MTN Nigeria, Airtel SmartCash, PiggyVest, Opay, Palmpay, et al offer lucrative interest rates on deposits. Fintechs have raised the bar. They offer customers easier and cheaper services. They offer what they have. Zero transfer fees. Attractive interest rates on savings. Online banking experience. Speed. Simplicity. These are shining robes. But they do not have N115 trillion deposits.
In The Long Term
Banks’ lending and support to the private sector have increased from N71.21 trillion in March 2024 to N72.92 trillion in April. It soared to N74.31 trillion in May 2024. Fintechs do not play in the big league. Cancel that. Fintechs cannot lend to the oil and gas behemoth. Or the telecoms big boys. The banks have shifted the battleground.
The competitive advantage Fintechs brought to the battleground has endeared these entities to many Nigerians. It has strengthened the sector. That is the reason the electronic payment transactions peaked in the year 2023. It reached N600 trillion from N387 trillion in 2022. The Nigeria Inter-Bank Settlement System (NIBSS) reported.
Reports showed that banks are exploring alternative methods to grow deposits to remain relevant and lend to the real sector. Fintechs do not play in the real sector. Or in the telecom sector. I am unsure. Therefore, the banks hold forth in this regard. There is no competition.
Data from the Central Bank of Nigeria (CBN) showed that credit to the private sector has increased from N29.52 trillion to N74.31 trillion in May 2024. In the year 2023, it was N44.79 trillion. Until the Fintechs have the bottomless pockets to lend to the private sector and display the banks’ resilience, the battleground will not be the same.
In The Short Term
The banks have taken their rightful place in the scheme. When it comes to lending to the real sector and funding big meal ticket projects, the banks have it. The verdict? Each entity gives what it has. Who is your candidate?
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