489. The CSAR is nevertheless concerned that, because of corruption and institutional weaknesses, the funds are unlikely to reach their intended beneficiaries. Loans might then end up as bad and doubtful debts, thereby crippling the operations of the fund and undermining its laudable objectives. In addition, the CSAR expresses concern about continued regional disparities in access to the SMIEIS fund (Import Duty Report, 2007). Finance 490. The CSAR discusses financial-sector reforms under four main headings: interest rate and monetary policy, banking and insurance-subsector restructuring and consolidation, capital market development, and the new pension scheme. Nigeria’s financial-sector reforms have attempted to: improve financial market stability, access and efficiency; eliminate nonprice rationing of credit to increase competition; adopt indirect monetary management instead of imposing credit ceilings on individual banks; and strengthen the money and capital markets through measures to resolve distress. Monetary policy 491. Changes in monetary policy include removing credit ceilings for a few banks judged to be sound, and shifting liquidity management to the indirect approach of open market operations (OMO). Banks, discount houses and some selected stockbrokers were permitted to participate in the primary market for Treasury bills. In addition, the interest rate regime was liberalised. The CBN adopted a policy of setting a minimum discount rate to signal its policy direction. Furthermore, the CBN has promoted and popularised other financial market products, such as the National Savings Certificate, to encourage savings. 492. The CSAR nevertheless notes with concern that the gap between the banks’ deposit and lending rates remained quite high. It may reflect weak competition among banks for clients. Furthermore, large gaps associated with high lending and low deposit rates discourage saving as well as borrowing. Banking-subsector restructuring 493. 154 A mainstay of the financial-sector reforms is the programme of consolidating banking and insurance. The financial sector was characterised by concentrated assets and a small asset base before the reforms. More than half of bank assets were held by only 10 of the 89 banks. Meanwhile, the combined assets of the 89 banks totalled only US$18 billion. Furthermore, a substantial portion (20.8 per cent) of the total money supply remained outside the banking system because of high inflation, low levels of public confidence in the subsector and inefficient intermediation. The average savings deposit rate was only between 3 per cent and 5 per cent, while the lending rate averaged between 21 per cent and 32 per cent. A surveillance report in 2004 noted that 25 of the 89 banks were only marginally sound or were unsound. Two of the banks did not make statutory returns. The