The Bankers’ Committee, an umbrella body comprising the Central Bank of Nigeria (CBN), Deposit Money Banks and Discount Houses in Nigeria , said it has resolved to raise lending to the agric sector to N300 billion next year.
CBN Governor, Mr. Godwin Emefiele, revealed this at the end of the 7th Bankers’ Committee Retreat held in Lagos at the weekend.
He said that the planned increased lending would be extended to both Small and Medium Enterprises (SMEs) and large scale companies in the agricultural sector.
According to him, the Committee, however, believes that there is the need to de-risk the agricultural value chain by improvements in the level of infrastructure in various sectors.
He said: “Banks generally agreed to increase lending to the agricultural sector, but the committee feels that there is the need to de-risk the agricultural value chain. The Bankers’ Committee also feels that the monetary and fiscal authorities need to work together in a collaborative manner to achieve the objective of improving local production of specific agricultural products, so that as a result of lending to this sector, we can begin to see a reduction in the demand for foreign exchange that would help to conserve our foreign exchange reserves and strengthen our currency.
“Banks feel that there is a need to improve the level of infrastructure in various sectors. For instance, build more Fadama roads, build more silos and warehouses to receive final produce, so that products don’t get destroyed at the farm.”
The CBN Governor pointed out that the retreat was also attended by the Ministers of Agriculture, Chief Audu Ogbeh; Power, Works and Housing, Mr. Babatunde Raji Fashola; Transportation, Mr. Rotimi Amaechi; Solid Minerals, Mr. Kayode Fayemi; Finance, Kemi Adeosun, as well as practitioners in agricultural, power and small business sectors, who contributed to the decisions reached.
He further disclosed that in addition to seeking more backing for the agric sector, the Committee deliberated on the need to help support government’s efforts in areas such as boosting Small and Medium Enterprises (SMEs), employment of young graduates and diversification of the economy from oil.
He said: “The Bankers’ Committee also looked at the financing of SMEs, and recognised that there is need for paradigm shift in the feeling that SMEs are an endangered sector to lend money. The Committee also recognised that the Bank Verification Number (BVN) will help in creating a pool of SMEs loans in the country.”
The Committee, according to him, however, agreed that there was the need to take identified SMEs through capacity building skills such as how to keep records and run their businesses in order to make it easier for them to access loans.
According to Emefiele, “The previous Bankers’ Committee retreat has helped to increase lending to the manufacturing sector and it has also helped in facilitating finance to the power and aviation sectors. Thirdly, it has helped to incentivise lending to the agricultural sector where we have seen lending to the sector increasing from as low as one per cent in 2010/2011, to as high as four per cent in 2014/2015.”