Threat Of Recession Strengthened Our Capacity To Address Financial Crisis – NDIC

The Nigeria Deposit Insurance Corporation on Monday said that the threat of economic recession, increased national debt, increase in non-performing loans and potential financial crisis has put pressure on regulators to re-assess their supervisory activities.

This, it said, was expected to strengthen their capabilities to address these challenges and forestall financial crisis.

The Corporation also said it is committed to the protection of the stability of the banking sector in Nigeria.

The Managing Director of the NDIC, Alh Umaru Ibrahim said these at the
2020 edition of the Corporation’s workshop for Business Editors and Finance Correspondents.

The theme of the workshop is “Covid-19 and fintech disruption: Opportunities and challenges for the banking system stability and deposit insurance.”

Ibrahim said the theme of the workshop is appropriate as it captures the current concerns within the public discourse in the Nigerian economic and financial landscape.

According to him, the theme was carefully chosen to critically analyse the risks, implications and opportunities posed by the pandemic on the Nigerian banking sector and the global financial landscape as a whole.

Speaking on the impact of the COVID-19 pandemic, he said this had disrupted social and economic activities with negative consequences on all lives and nations across the world.

The NDIC Boss said the emergence of digital financial services enabled by financial technology has enhanced efficiency in the financial sector.

He, however, said this has also posed new challenges to financial regulators and consumers.

He explained that the challenges to financial regulators became more evident during the pandemic when the lockdown protocols hindered physical access to financial services, encouraging more Nigerians to rely on digital financial services.

He said, “As disruptive as the COVID-19 pandemic has been to other sectors of the country, I would like to humbly state that the NDIC was not caught napping.

“Based on its robust and proactive Enterprise Risk Management strategy, the Corporation immediately swung into action by activating its Crisis Management Action Plan to prevent any negative impact on the operations of the NDIC and the financial institutions under its supervision.

“The goal is to ensure the safety and protection of all staff and stakeholders to maintain continuity of its operations towards protecting depositors funds and ensuring the stability of the banking sector.”

In recognition of the heightened fears of depositors lack of access to their money due to the COVID-19 disruptions, the NDIC Boss said the Corporation embarked on a nationwide public awareness campaign to enlighten depositors on the continued safety and security of their funds in licensed financial institutions.

Ibrahim said Nigeria’s financial technology solution accounts for 25 per cent of the $491.6m raised by African fintech start-ups in 2019.

The NDIC boss who noted that there is a number of Fintech solution offered by banks and mobile networks operators as part of their product portfolio in Nigeria, also announced that between 2014 and 2019 alone, Fintech sector recorded over $600m in funding.

The NDIC Boss said the workshop continues to serve as a tool to enhance the quality of reportage especially in addressing misconceptions about the mandate and activities of the Corporation in promoting financial system stability.