omonnakoda:
Manufacturing

How does one invest in manufacturing ? Please explain how a lawyer with 2 million naira in the bank does this and what product specifically?

pure water business even if you dont want to start with producing can water is still expensive. 2 million naira wont take you anywhere except you want to rent a building and just buy the machines and start production. you still have to register with NAFDAC and CAC. i am about to start one and my budget is around 7 million but in my own case i will buy my land and build factory.

That is the good effect of TSA. Public Sector funds are better managed so as not to flood the economy and lead to inflation.

This is a good development as the cost of doing business will go down. Funds should be channeled into productive activities by individual than locking the economic resources into short term deposit. This funds should be channeled to the real sector and discourage making the commercial bank growing fat at the detriment if the poor unemployed youths.

sonssyo:




manner=zero.
whatever, you hv gat Ur hands,so go ahead and type any thing.no time for peeps like üuûuuû

Did you actually believe serious and sensible people will come to Nairaland for advice on what to do with their money? Truly you lack sense

omonnakoda:
Manufacturing

How does one invest in manufacturing ? Please explain how a lawyer with 2 million naira in the bank does this and what product specifically?

Investing in manufacturing is a two-way thing; you either start up a manufacturing firm of your own, having considered cost implications and future returns of the specific line of business or you plough your funds into an already existing manufacturing firm with prospects.
Someone made mention of investing in Dangote cement, 2million naira worth of shares isn't a bad idea...

my brother thank u for this information cos am collecting my contribution next week I wanted to go and do fix deposit but let me wait till I confirm if the interest rate is dat small (2%)

In a country like Nigeria with fraudulent imbalance in wealth what percentage of the population can legitimately invest in treasury funds with money they saved from their salary?

Stolen monies have skewed this economy for such a long time. Hopefully successive government will make a start in righting the many wrongs of the past.

Angelstartups:
Hello,

If the information is confirmed, the implications are:

For those that have already invested in fixed deposit and locked in at far higher rates, your interest will not suddenly change- you will still receive your earning at the end of maturity. So there is no cause for alarm for existing "Fixed Deposit Holders" (to capture it in @Bj5all's language).

However, going forward it means new investors in fixed deposit with the banks will earn those reduced interest as you have quoted.

CBN's key objectives include (among others) to manage THE TRINITY (Exchange rate, Inflation rate and Borrowing rate). The bank adopts different strategies and tactics to achieve it's goals and one of them is through monetary policies, trying to stimulate investment in real sector and capital projects.

Commercial Banks already offer as low as 3.0% on savings account and so the options for the public (surplus side) will then be either they Consume their funds or Invest it (since savings as it is now, erodes capital) in financial assets or non-financial assets, that could give higher returns.

At the moment, these assets include Treasury Bills or investing in Real Sector (which has higher risk) or Equities (which is classified as high risk).

Treasury Bills trade at between 9.5%-11% at the moment and is a safe investment option.

Visit www.angelstartups.com.ng/fixedincome for more information.

Cheers.

sonssyo:


invest in a more viable sector like manufacturing, fixed deposits are meant for lazy peeps.Risk Averters.

Nope. In a true economy money from fixed deposits are part of the capital to make loans for manufacturers. Putting money in a fixed deposit is not laziness.

David0:
It's not true please. Am a banker, n I can confirm it's not true. It is possible d bank op visited wants to play a fast One on him, by reducing d interest rate so d bank gains more from his investment.

So banks play fast one on people like that.


No more Love.

and i had plans of fixing at the end of this month?

October1960:


Nope. In a true economy money from fixed deposits are part of the capital to make loans for manufacturers. Putting money in a fixed deposit is not laziness.

d banking industry industry(commercial banks) have refused to play their role in a real economy,fixed deposits are heavy liability to banks, an bank that's is about to become insolvent will not like to go for fixed deposits rather they will prefer CASA account,current account and savings of which the interest payable are very low ie if there is going to be interest at all,most nigerian's withdraw more than three times in a month which now forfeits interest payable. they keep taking charged,debit and credit alert and bank to bank charges,they smile at this because their profit keep increasing. they keep putting up ATM everywhere, that's income for u.
research shows that 85% of Nigerians are unbanked, they should get funds from the grassroot and funds will never be a problem. go to first bank they will price 3% on 1m but if u take d same 1m to unity they can even give u 6%or 7%.forget banks

yomi007k:


So banks play fast one on people like that.


No more Love.

Its not about playing fast one, its more about doing business.

U dont expect the bank to give u the whole deposit interest rate frm cbn, they must make something from safe keeping the money as well.

Thats y thrs room for negotiation when it comes to fix deposit.

Let's see HW this will affect the future

David0:


Its not about playing fast one, its more about doing business.

U dont expect the bank to give u the whole deposit interest rate frm cbn, they must make something from safe keeping the money as well.

Thats y thrs room for negotiation when it comes to fix deposit.

Aii tnx

Never really been an FD fan from d start.

this can't be true! if CBN came up with this policy with a view to increasing investments in real sector, it is still not a win situation. This has a chain reaction as it discourages savings and, by implication, reduces banks' lending power. this reduces ability to access loan for investment purpose. Even at that, what economic framework is on ground to encourage investment?

My less than 1m naira fixed deposit is at 7% interest rate. Should this information holds water, will it affect my savings?

@Op this information is not true........Contact me if you need to do FD with your amount and tenor,
I work with a Financial institution on the main land that is CBN licence,existing for over twenty four years and offers good interest rate that's far better than banks.

Opps. Sowie..... Did not check really.

malonephill:
you rush to comment without proper checking, sorry anyway you need glasses, he open the thread on 16th which is friday

[ Thank you, my brother. I'm surprised nobody as noticed this. Interest for 30 days cannot be more than for 60days.

quote author=okitikpo post=39123095]But something is definitely not adding up in what the OP put up there. How can interest rate for 30 days be higher than 60 days. OP are you sure you got the proper gist! [/quote]

bodashee:


Excuse me sir, there is only one apex bank in Nigeria, which is CBN. Same applies to every country in the world. There is nothing like "an" apex bank.

Sorry wrong choice of word. I actually meant to say one of the top banks in Nigeria. And people should stop exhibiting their ignorance on financial matters. Interest rates for commercial banks are guided by the mpr. Last time I checked mpr was @ 15. In macroeconomics u increase mpr 2 draw excess cash outta circulation to stall inflation. CBN's drastic measures lately have looked harsh because we have no finance minister to balance the equation with a well thought out fiscal policy. Those claiming to have gotten interest rates as low as 1 to 3 percent should indicate the bank in question, let's know if it's a commercial bank or a microfinance bank. Please let's not pass misleading information here that harms the public image of the banking sector at large. And lastly do a proper research on Marco economics and how it affects banks before coming to make baseless assumptions here. Even normal saving account in banks attract an interest rate of 2 percent per annum. Lastly it's worthy of note that all interest rates whether for deposit or loans are per annum except when it's compounded for sake of customer but if I tell you 10 percent it's actually 10 percent per annum. We can use compund interest to give you an exact figure of what your earning on that 10 percent will amount to in let's say 30, 60 or 90 days.

dantti2006:



Sorry wrong choice of word. I actually meant to say one of the top banks in Nigeria. And people should stop exhibiting their ignorance on financial matters. Interest rates for commercial banks are guided by the mpr. Last time I checked mpr was @ 15. In macroeconomics u increase mpr 2 draw excess cash outta circulation to stall inflation. CBN's drastic measures lately have looked harsh because we have no finance minister to balance the equation with a well thought out fiscal policy. Those claiming to have gotten interest rates as low as 1 to 3 percent should indicate the bank in question, let's know if it's a commercial bank or a microfinance bank. Please let's not pass misleading information here that harms the public image of the banking sector at large. And lastly do a proper research on Marco economics and how it affects banks before coming to make baseless assumptions here. Even normal saving account in banks attract an interest rate of 2 percent per annum. Lastly it's worthy of note that all interest rates whether for deposit or loans are per annum except when it's compounded for sake of customer but if I tell you 10 percent it's actually 10 percent per annum. We can use compund interest to give you an exact figure of what your earning on that 10 percent will amount to in let's say 30, 60 or 90 days.

Boss, Thank you jare for ur crystal clear clarifications...you would really make a good lecturer!

Bj5all:


It's not fake, thank God today is Monday. Do the needful, visit ur account officer and then u will know it's not a fake news

The news is real, I was at FBN Airport road for treasury bill. My account officer gave me between 9% and 10% when i asked for the rate on Fixed Deposit........ I was told 2%. This happened less than 24 hours ago.

Bj5all:
The interest rate for deposit between 100k to 50 million is now 2.5% for 30 days and 2% for 60 days and above. For deposit from 50 million and above is 3% as against the 10% ihave been dealing with the bank.

Something must be wrong with the words in bold.

Those rates I read are very good rates. 2.5% interest per month. The rates can't be dat high

dantti2006:



Sorry wrong choice of word. I actually meant to say one of the top banks in Nigeria. And people should stop exhibiting their ignorance on financial matters. Interest rates for commercial banks are guided by the mpr. Last time I checked mpr was @ 15. In macroeconomics u increase mpr 2 draw excess cash outta circulation to stall inflation. CBN's drastic measures lately have looked harsh because we have no finance minister to balance the equation with a well thought out fiscal policy. Those claiming to have gotten interest rates as low as 1 to 3 percent should indicate the bank in question, let's know if it's a commercial bank or a microfinance bank. Please let's not pass misleading information here that harms the public image of the banking sector at large. And lastly do a proper research on Marco economics and how it affects banks before coming to make baseless assumptions here. Even normal saving account in banks attract an interest rate of 2 percent per annum. Lastly it's worthy of note that all interest rates whether for deposit or loans are per annum except when it's compounded for sake of customer but if I tell you 10 percent it's actually 10 percent per annum. We can use compund interest to give you an exact figure of what your earning on that 10 percent will amount to in let's say 30, 60 or 90 days.

U have spoken well but ur statement lacks confirmation. Go to FBN, any branch close to u and check out things for urself.

charlsecy:

Something must be wrong with the words in bold.

There are banks everywhere, go and confirm for urself. Go to the marketing department in any bank and ask for their current fixed deposit rate

Bj5all:

There are banks everywhere, go and confirm for urself. Go to the marketing department in any bank and ask for their current fixed deposit rate

2.5% for 30 days and 2% for 60 days? More attractive to fix for 30 days.... A kind of counterintuitive.

saintneo:


This will be a great policy from the CBN; if and only if it is true.

1. This will discourage people from hoarding money.
2. This will discourage government officials from fixing government funds in personal accounts.
3. It will encourage entreprenuers and entreprenuerships.
4. Banks will be forced to loans available since the profit from deposits will be very low.
5. If banks don't give out loans at low interest rates, their profitability will drop.
6. Bank workers such as marketers 3will be driven to pursue deals instead of monetary deposits.
6. Money for innovative people. Bank go beg for creative people to come up with ideas.
7. Banks will no go abroad to borrow excessively from foreign financial institutions.
8. Every business idea will count.
9. No more lazy methods of making money cheaply.
10. Add yours!!





Yipeeeeeeeeee!

Please can you explain 4 and 5 further
Thanks

You are correct...For those that wants to invest in Fixed income or bonds, I work with an investment bank and we have lots of funds locked in already, This implies that you can still get a marginal rate between 8 - 14% depending on the volume. You may contact me if you are interested. 08021022255 or tajayi@cowryasset.com

Angelstartups:
Hello,

If the information is confirmed, the implications are:

For those that have already invested in fixed deposit and locked in at far higher rates, your interest will not suddenly change- you will still receive your earning at the end of maturity. So there is no cause for alarm for existing "Fixed Deposit Holders" (to capture it in @Bj5all's language).

However, going forward it means new investors in fixed deposit with the banks will earn those reduced interest as you have quoted.

CBN's key objectives include (among others) to manage THE TRINITY (Exchange rate, Inflation rate and Borrowing rate). The bank adopts different strategies and tactics to achieve it's goals and one of them is through monetary policies, trying to stimulate investment in real sector and capital projects.

Commercial Banks already offer as low as 3.0% on savings account and so the options for the public (surplus side) will then be either they Consume their funds or Invest it (since savings as it is now, erodes capital) in financial assets or non-financial assets, that could give higher returns.

At the moment, these assets include Treasury Bills or investing in Real Sector (which has higher risk) or Equities (which is classified as high risk).

Treasury Bills trade at between 9.5%-11% at the moment and is a safe investment option.

Visit www.angelstartups.com.ng/fixedincome for more information.

Cheers.

Nichobabe:


Please can you explain 4 and 5 further
Thanks

Ways Banks(bank branches) make money

1. Interests on deposit
2. Interests on loans(branches hardly do deals, most deals are done at the top; thus most branch manager rely on pool-interest rate on deposits)
3. Charge on transactions
4. Service charges
5. Foreign exchange, form A, form M etc


Let's take an example Bank X has 200 branches in Nigeria. The pool-interest rate for Bank X is 8%. If Branch Y located in Apapa maintains current accounts with deposits of about average of 600million annually, Branch Y will make 48million for the year based on current accounts deposits only. ... this is pretty 'easy' because they will get this deposits using their (3-to-6)marketers that they will pay 3 million on the average per year. to each marketer.
On the other hand, if Branch Y is to chase deals, the loans could go bad if business fails, the loanee bolts away or dies. This could lead to employee termination. This is very challenging, branch managers will prefer the easy way....deposits.

Now consider if the deposit rate is low, Branch Y will seek other means to generate revenue or reduce cost by sacking its staff. Consequently, Branch Y will seek genuine entreprenuers with great ideas to support in developing their businesses and earn profit for its services to the entreprenuer.

saintneo:


Ways Banks(bank branches) make money

1. Interests on deposit
2. Interests on loans(branches hardly do deals, most deals are done at the top; thus most branch manager rely on pull-interest rate on deposits)
3. Charge on transactions
4. Service charges
5. Foreign exchange, form A, form M etc


Let's take an example Bank X has 200 branches in Nigeria. The pull-interest rate for Bank X is 8%. If Branch Y located in Apapa maintains current accounts with deposits of about average of 600million annually, Branch Y will make 48million for the year based on current accounts deposits only. ... this is pretty 'easy' because they will get this deposits using their (3-to-6)marketers that they will pay 3 million on the average per year.
On the other hand, if Branch Y is to chase deals, the loans could go bad if business fails, the loanee bolts away or dies. This could lead to employee termination. This is very challenging, branch managers will prefer the easy way....deposits.

Now consider if the deposit rate is low, Branch Y will seek other means to generate revenue or reduce cost by sacking its staff. Consequently, Branch Y will seek genuine entreprenuers with great ideas to support in developing their businesses and earn profit for its services to the entreprenuer.

Thanks.
You must be a banker. Well explained

Nichobabe:


Thanks.
You must be a banker. Well explained

I was.


BTW, in my explanations i wrote 'pull-interest rate', the correct term is 'pool-interest rate'.