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N30bn bankers’ intervention fund takes off next year at single digit interest rate

All is set for a new N30bn intervention window expected to be injected into the financial system early next year by a consortium of all commercial banks in Nigeria in partnership with the Central Bank of Nigeria (CBN).

The facility is coming on a rare single digit interest rate.

Business Hilights gathered that Nigerian banks, under the aegis of the Bankers Committee, chaired by the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, reached the deal at the end of a two-day yearly retreat in Lagos, on Saturday.

The target of the intervention scheme is the agricultural sector which had been seen as the surest way out of recession.

Tagged Agriculture/SME Fund (AGSME Fund), Emefiele said it is a deliberate strategy to support the funding and access to finance for small businesses and primary agriculture.

The initial take off capital has been estimated at about N30 billion or more, which would be disbursed to successful applicants between March and April 2017.

The move, which serves as banking industry contributions, aside from apex bank’s intervention, would however, have the pooled resources domiciled at CBN, to ensure that it is readily available for disbursement.

“Whatever projects that people present to the Bankers Committee through its sub-committee will also go through checks to determine they are viable. Then the agreement is signed to disburse the fund.

“This is different from SMEEIS. Under it, banks will set aside money through a provision in their balance sheet. But the money stays with them. This time, once the profit is ascertained, the money provided as agreed will be wired to the CBN immediately,” he said.

Coming in form of an Equity Fund, the fund will be worked out by the committee soon; the contributions to the pool are a portion of banks’ profit after taxes.

CBN Governor further revealed that “The banking system recognises its critical role as agent for economic development and obligation to contribute to the nation’s recovery. There is a need for innovative solutions that will enable the finance sector play a key role in driving Nigeria’s growth and development.

“The committee also recognizes the potential impact of agriculture and manufacturing by small and medium enterprises, as catalysts for rapid growth, job creation and poverty reduction. We reaffirm the commitment of the financial system to the segments in 2017.

“We reaffirm commitment to financial deepening of the economy, by making finance work, enabling viable SMEs participate in the diversification agenda, as well as reverse the disturbing monolithic dependence on oil,” he said.

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