Some finance houses in Nigeria are currently facing a lot of challenges as shortage of funds continues to threaten their operations.
In fact, THISDAY learnt that some of them were finding it to meet their obligations to customers as and when due.
Some operators that spoke with THISDAY expressed concern over the delay by the Central Bank of Nigeria (CBN) in unveiling the reform package it had planned for the sub-sector.
Commenting on the difficulty faced by the operators, the President of Finance Houses Association of Nigeria (FHAN), Mr. Samuel Durojaye, said: “The central bank should create a window for the finance houses just as they did for commercial banks when they had liquidity problems so that we can borrow as a last resort from central bank.”
Speaking on the expected guideline for the reform of the sector, he said: “The guideline is being reviewed and we don’t know if the new guideline would have such a window so we are still expecting it.”
However, Durojaye revealed that the CBN might release the reform package for the sub-sector before the end of the third quarter of the year, saying that “some issues came up as regards some of our services and functions where they needed clarification.”
“We had a meeting with the CBN and the consultant in April and we had hoped they would have finalised the guidelines by now. There has been further research while we have also made recommendations to CBN and hopefully it should come out before the third quarter of the year.”
The FHAN boss predicted that the reform package may result to the recapitalisation of the sub-sector, even as he forecast a new capital base of N250 million, as against the N20 million it used to be.
Durojaye had in an earlier interview with THISDAY, recommended that the CBN should fix the new capital base at a level that it would not drive people out of business, saying that the central bank should not make same mistake the Securities and Exchange Commission (SEC) made in 2008 when it raised the share capital for stockbrokers to N1 billion and that could not be implemented.
“So we are saying that the level of capitalisation should be such that it will make the finance companies strong and be able to handle big ticket transactions, but not to discourage people from coming into the sector,” he had said.