Owing to its inability to disburse a single kobo from the N26 billion Agro based funds, the bankers committee has restricted the funds to accommodate small and medium enterprise from sectors other than agriculture.
The Central Bank Governor, Godwin Emefiele, who briefed the press after the 9th Bankers Committee Retreat in Lagos yesterday said, “ it is a shame that we could not disburse anything from that fund in one years. So we decided that the fund needed to be restructured completely”
Commercial banks in the country have raised a total of N26 billion as part of their commitment to finance agro-based small and medium scale enterprises (SMEs), with the CBN governor hinting that the fund is set to hit N60 billion by the end of this year.
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He said: “We have decided that the funds will be long tenured of around 7 years with a moratorium period and must be for development oriented, non-profit maximization scheme at an interest rate of not more than 5 per cent.”
Emefiele disclosed that 50 per cent of the funds will be set aside for direct SMEs disbursement, 45 per cent for Venture Capital Companies that would identify specific projects like cassava starch production or toothpicks etc. while 5 per cent will be reserved for capacity building.
He said: “By February, we would have disbursed the first set of N13 billion and we hope to reach a total of one hundred thousand people by the end of 2018.”
He further said the CBN would provide forbearance to say, if a bank lends an amount of money to people who fall amount the target group, their Cash Reserve Ratio will be lowered as an incentive.
“We are also considering a Nigerian Incentive based risk sharing for SMEs such that if a bank decides to loan to an SME, we will Share the risk with them and also provide an interest drawback,” he added.
