Specifically, the loans dropped from N28.86bn in December 2018 to N4.58bn at the end of the 2019 financial year, according to the latest figures obtained from the National Bureau of Statistics.
The report also showed that the total non-performing loans in the banking sector stood at N1.05tn out of a total loan of N17.56tn as of the end of 2019.
Banking sector loans to the finance, insurance and capital market operators are about 7.4 per cent of the total loans in the sector.
As the underwriters beef up their capital to meet the new order, the National Insurance Commission has barred the regulated entities from borrowing money to meet their recapitalisation requirements.
NAICOM stated in a report on ‘Recapitalisation road map: Implementation, expectation and benefits’ that the features of paid-up share capital constituting the companies’ new capital in the sector’s ongoing recapitalisation would be absolute paid-up share capital, as distinct from solvency capital/capital fund/capital base.
The commission stated, “For the avoidance of doubt, and for an instrument to be treated as paid-up share capital, the following criteria among others must be satisfied.
“It must represent the most subordinate claim in liquidation of the insurer/ reinsurer; The investor is entitled to a claim, only on the residual assets that is proportional with its share of issued capital, after all senior claims have been paid in liquidation (such that it has an unlimited and variable claim, not fixed or capped claim);
“The principal is perpetual and never repaid outside of liquidation; distributions are paid out of distributable profit or retained earnings. There are no circumstances under which the distributions are obligatory; it must not be a loan on the company or margin facility whatsoever.”
These Online Businesses would fetch you lots of money! No Training Required, Just gather your Profit daily! Lots of Freebies too: Free Bulk SMS Credit, Free Domain Registration and Web Hosting, Branded Apps, Recharge Voucher, Online Payment and more! Start Now »