How to make money with Nigerian banks

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Posted by Felix Okoli on Tuesday July 19, 2011 at 13:14:22:

It is true that a lot of Nigerian banks are making money from the huge deposits they hold on behalf of their numerous customers. This is even moreso the case now than ever before as the CBN governor has worked in trimming down the number of banks in Nigeria. Nigeria currently has about 24 registered banks and they are making money or at least adding to their value. They make money by offering loans for things like mortgage, manufacturing and small businesses.

How does one make money with a bank? How do you make money from a bank that operates in Nigeria which currently has one of the fastest growing economies in the world and hosts some of the richest African billionaires?

Well here are tips on how you can make money with a Nigerian bank:
- Get to know the bank and its services. Try their corporate website
- Take advantage of business loans if your business has a good record of getting more profit margin percentage than the bank loan
- Make use of the naira credit card to access huge credits and support your business
- Use overdrafts if you have a good record of making periodic deposits
- Convert funds in your savings into fixed deposits with long or short term periods if you don't have immediate need of the cash
- Buy bank shares when prices are lowest. See your broker or check cscs online to see price history
- Invest in govt bond
- Invest in bank housing schemes if you have the funds
- Search for higher yielding products and invest in them
- Make use of long term savings scheme like education or mortgage that would guarantee you interest for your savings. This can add value to your money

If for instance, a bank is offering a savings account that allows you to also clear cheques at no charges, then it would be a good idea to have one of such accounts and do most transactions with it. If you are a farmer or agriculturist, you can make use of govt loans on agric banks to access the funds for cheaper.

If your bank also offers insurance services, they may be no need to have a different company that insures your property and probably at a much higher fee or inconvenience to you.

If your bank offers car loan, you can take advantage of it, rather than getting a car loan from a car dealer. You can compare the costs though to reduce your costs.

Fixed/Term deposits and bonds are a great way to save money over a period of time as they guarantee higher returns irrespective of the economic situation. It may even be safe investing in term deposits than starting a new business. You will have to agree on a rate with your banker. Most banks offer something like 10% or more for Fixed deposits you keep with them for about 30 to 90 days. The amount you actually gain after the term has expired will be based on the time period in maybe months divided by 12 months and the multiplied by capital and the rate.
For example, if you keep N2,000,0000 fixed deposit with a Nigerian bank for 3 months at an agreed rate of about 10% p.a, at the end of the 3 months, the total profit on your money would be:

(N2,000,000 * 0.1 * 3)/12 = N50,000
The total balance would then be N2,050,000 meaning that it earned you about N16,000 per month.

Actually this is just the bare minimum you are most likely to get from a Term deposit as rates can be higher for higher capital you invest

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Comments:
Re: How to make money with Nigerian banks Posted by taliat sodiq akinola on Monday March 5, 2012 at 22:20:11:

giving out loan to ther customer and know the kind of business they want to use it for and the individual bank have to mornitor the business ontill the loan his been payed back

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