Nigerian banks to fund agric-business, exports with 5% profit

Nigerian banks to fund agric-business, exports with 5% profit

Thursday, February 9, 2017 9:34 pm

Nigerian banks

The Bankers Committee of the Central Bank of Nigeria have agreed to set aside five per cent of the Profit After Tax of the banking sector to fund the agricultural sector.

The Committee also agreed that the five per cent should be used to fund non oil exports.

The committee made this known at its meeting held at the headquarters of the Central Bank of Nigeria (CBN) in Abuja on Thursday.

The committee stated that based on the balance sheet of the banking sector for 2016 financial year, about N25 billion was expected to be pooled into the fund annually.

The Director, Banking Supervision Department, CBN, Mr Ahmed Abdullahi, while briefing newsmen on the outcome of the meeting said the decision to set aside the fund was to support the agricultural sector.

According to Abdullahi, it is also to support import substitution policy of the Federal Government.

He said other issues discussed include the reactivation of the cashless policy as well as its extension to the remaining 30 states, the Ponzi scheme and the emerging threat of virtual currency.

Abdulahi said the move was borne out of the conviction that the agricultural sector as well as the promotion of non oil exports holds the key to diversification of the economy.

He said the money would not be given to businesses in these sectors as loans but rather it would be provided by banks as an equity contribution to such companies.

This, he noted would allow the banks to have equity stake in such businesses for a maximum of ten years.

He added that rather than charging interest, the banks would be entitled to dividends during the period of their investments.

“The Bankers Committee discussed the new initiative concerning agric business, Small and Medium term enterprises.

“Bankers Committee feel the need to help the Federal Government in diversifying the economy by coming up with an initiative that will help the export drive in the economy as well as import substitution.

“The committee has decided that each bank will contribute five per cent of its profit after tax to be used to finance eligible bankable projects that are meant to export drive of all import substitution.

“The scheme will be controlled by the Bankers Committee where project review committee would be set up to review submissions by entrepreneurs that would require funding.

“That project committee will make recommendations to the board of trustees of the Bankers Committee.

“The scheme is such that each bank has a contribution to the scheme based on its annual contribution from its annual profit,” he said.

Umeano, who also spoke on the cashless policy said this would help drive financial inclusion, sustainable development goals of the country and improve security in banks transactions.

According to him, the committee’s plan is to have a gradual reintroduction of the scheme to the 30 states starting from May.

He said the cashless policy since it was introduced in 2012, had been implemented in six states.

They are Lagos, Abia, Anambra, Port Harcourt, Rivers and Ogun state.

“By May 1, we will take on the first 10 states, by August 1, we take on the next ten states, and by October 1, we will be on the last ten states to complete the nationwide roll out,” he said.

Also speaking, the Managing Director, Guaranty Trust Bank Plc, Mr Segun Agbaje expressed the industry’s concern over the number of Ponzi schemes springing up presently in the country.

He cautioned customers to beware of “get rich schemes” so as not to lose their money to these Ponzi Schemes.

“Another topic which has also become very tropical is the Block Chains. We are trying to separate Block Chains like bitcoin from other virtual currency.

“The central banks around the world including Central Bank of Nigeria are beginning to look at the impact of block chains like bitcoin and other crypto currencies.

“They want to understand it better before coming up with regulation either to support it or to prevent it.

“We are at the very early stages of this in Nigeria and the CBN is looking at it closely before coming up with any regulation for block chain types,” he said. (NAN)

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