By Udeme Ekwere

Thursday, 4 Nov 2010

THE Finance Houses Association of Nigeria has decried the lack of a robust regulatory system in the country‘s financial sector.

The President of the association, Mr. Eddie Osarenkhoe, said this in a statement made available to our correspondent on Wednesday.

Osarenkhoe, who was quoted to have spoken during the association’s Annual General Meeting, said, this was clear from the poor performance of finance companies in the period under review.

According to him, ”For our sub-sector specifically, the year was yet another that posed enormous business challenges in the operating environment with a good number of finance companies posting very poor financial results.

”This unfortunate scenario is a clear evidence that our major business challenge has been the lack of a robust regulatory and supervisory reform programme that will address the issues of the pervasive low investor confidence and narrow funding structure; and the concomitant inability to attract and retain high managerial capacity in the system.”

He, however, noted that despite the obvious challenges, a few finance houses were still able to weather the storm and roll out some good results.

”We wish to note that despite the very inclement structural and institutional difficulties, some of our members have remained resilient and redoubtable. Their ability to identify and leverage on their unique strengths and competences to take advantage of the growth opportunities in the economy is indeed cheering news in the midst of so much gloom,” he stated.

Osarenkhoe noted the association‘s commitment to expand and sharpen the skills base and technical competence of its members, adding that during the year, they organised some relevant industry-specific courses which drew faculty from industry and practice.

He said, ”The Central Bank of Nigeria has graciously continued to provide financial support to this programme, which is key to engaging the subsector in facilitating complex and uncommon transactions with enormous income potential.

“We remain very grateful to the bank for keeping faith with us, and we call for more attendance by members to these programmes, as the modest attendance by members so far had not been encouraging”.

He also called on all licensed finance companies to comply with the CBN’s directive to register with the association, noting that the apex bank in its circular, referenced, “OFID/DIR/CIR/GEN/VOL4/001, dated February 8, 2007, made the membership of the association compulsory for all licensed finance companies.

”We wish to note with regret, however, that a good number of finance companies have failed to comply with this directive. Worse still, many of us have consistently failed to even apply yearly to the CBN for the renewal of their operating licences as required by regulation.”

 

Source: Punch