CBN, commercial banks to revive real sector with N4 trillion facility

Succour may soon come the way of manufacturers and entrepreneurs, especially the agriculture sector, as the banking industry’s accumulated cash reserve, ratio (CSR) estimated at N4.11 trillion, would be opened for lending through a target approach.

Specifically, the Central Bank of Nigeria (CBN) and commercial banks have agreed to fund projects of manufacturing companies and agricultural initiatives with sterilised money from the mandatory CRR for financial institutions.

Banks are required to keep 22.5 per cent of customer deposits as CRR but with long-term provision so that it could be used for employment-creating enterprises at a fixed nine per cent interest rate under a seven-year term loan with a two-year moratorium.

The apex bank’s Director of Banking Supervision, Ahmed Abdullahi, who spoke yesterday in Lagos at the end of the monthly Bankers’ Committee meeting, noted that it was important to explore every opportunity to stabilise the economy, “especially now that the outlook in 2018 appears much better than 2017.

“We have seen stability in the exchange rate being sustained and the return of growth to positive and higher grounds than 2017.

Although there are reversals in our capital market, the fact is that the outflow in the Nigerian economy is far less compared to many emerging economies.

“The idea is to have job-creating activities in the economy and also bring interest rates down.

Although agriculture and manufacturing are the initial sectors that are being considered, sooner a bank can apply to any employment-creating sector and initiative.”

While the guidelines to the scheme’s take-off are being worked out, he said the idea was to refund the CRR of any bank that engages in lending in a new project or an existing one in the agriculture or manufacturing sector as a way of utilising the mandatory reserves.

“So, anytime a bank lends to a manufacturing company or agricultural enterprise at the rate the CBN has prescribed, the lender would have its CRR refunded up to the amount it has lent. The guidelines are coming up any moment from now once the scheme takes off,” he clarified.

The Managing Director of Guaranty Trust Bank, Segun Agbaje, who spoke for the committee, assured Nigerians that the macroeconomic indices were stable and had created numerous opportunities.

However, the ruling All Progressives Congress (APC) has applauded President Muhammadu Buhari for signing into law the Nigerian Financial Intelligence Unit (NFIU) Bill.

In a statement by its Acting National Publicity Secretary, Mr. Yekini Nabena, the party expressed confidence that the new law would boost ongoing efforts to combat money laundering, terrorism financing and check suspicious transactions ahead of the 2019 elections.

The APC called on the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and other related Offences Commission (ICPC) and other allied anti-graft bodies to intensify efforts at investigating and recovering public funds and assets that had been stolen by public officials.