CBN, bankers’ committee plan national MFB to boost access to credit, deploy fallow funds
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
In a bid to efficiently deploy funds created by the banking sector to boost activities of critical sectors of the economy, the Central Bank of Nigeria (CBN) weekend announced a proposition to create a National Micro Finance Bank (MFB) that will further enhance access to credit.
The uniqueness of the proposed national micro finance bank is to have offices spread across 774 local government areas of the country facilitated through a collaborative arrangement with the Nigerian postal service (NIPOST), Godwin Emefiele, the CBN governor said at the weekend during the annual bankers committee retreat held on the 8th and 9th December 2018.
According to Emefiele, the establishment of the national MFB will solve the issues bordering on access to credit identified by the bankers committee as a major bottle neck to the disbursement of the funds as loans.
“Under the CBN and the bankers committee we have the commercial agric credit loan scheme, a N210 billion fund set aside for micro, small and medium enterprises and another N60 billion to fund agric and small business, and many others, yet these monies have not been fully deployed,” Emefiele lamented.
He further noted that the banks have disbursed part of the funds, but are yet to be pleased with the pace of disbursement.
“So far over 850,000 small holder farmers have accessed loans and about N10 billion have been deployed but there are more people who need to access these funds to create jobs particularly in our rural communities and also improve the wealth in our rural areas. It is permeating but not moving as fast as we expect,” said Emefiele.
The National MFB will in addition to the existing channels such as the Commercial Banks, Bank of Agric, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and some of the reputable micro finance banks, will be a channel where these funds will be deployed fast and in a meaningful way that it is useful to the farmers and micro and small businesses, Emefiele said.
According to the CBN governor, the National MFB is expected to pick up by January 2019 with a capital base of N5 billion. The infrastructure to be provided by the NIPOST will be augmented with finance experts provided as staff from the CBN.
Other challenges hindering access to credit will be addressed by a sub-committee set up at the bankers retreat to investigate and report findings by February 2019, Emefiele said.
Another resolution made at the 10th Annual Bankers Committee retreat with the theme “Export led transformation of the Nigerian Economy as an engine for Sustainable inclusive growth in Nigeria,” is a renewed focus on lending to the youths.
Emefiele said the theme informed by the recent economic volatility and critical development in the Nigerian financial system, will see the banking sector’s attention directed at the creative industry largely loaded with youths for the provision of support that will aid employment and employability.
“We are very sentimental about this year’s retreat. It was focused on the youths and easing their access to credit,” he said, adding that the bank’s want to see what can be done to encourage creative activities, in the fashion, entertainment, IT sectors dominated by the youths to boost foreign exchange earnings and grow the economy.
“It is important to renew our focus on non-oil export that will help to catalyse economic growth and eliminate overdependence of our country on crude oil as a major force of foreign exchange earnings,” Emefiele said.
The Bankers committee retreat which holds annually is held to provide a platform for the banking sector to articulate and strategise on ways to boost lending to the most critical sectors of the economy.