Bankers Committee to support economic diversification with N25bn

That Bankers Committee said it has concluded arrangement to support federal government’s effort at diversifying the economy by introducing a new initiative that will fund agricultural business and Small and Medium Enterprises (SMEs), even as the Central Bank of Nigeria (CBN) reintroduced the cashless policy to other states of the federation.

According to the committee, the sum of N25 billion will be injected into the economy by way of financing SMEs especially businesses that focus on export and import substitution.

The committee made the disclosure on Thursday while briefing journalists at the end of its meeting at the Central Bank of Nigeria, Abuja. Mr Ahmad Abdullahi, Director, Banking Supervision Department of the CBN, said the N25 billion will be raised from 5% of each bank’s Profit After Tax annual contribution to the pool of fund that will be kept in the central bank of Nigeria.

“It will be use to finance eligible and bankable projects that are meant for export drive or all import substitution. The scheme will be controlled by the members of the Bankers Committee and the project review committee that will review submissions of entrepreneurs that require funding. That project review committee will make recommendation to the board of trustee of the Bankers Committee.

“The programme will commence in 2017 using 2016 financial year. Any business that will enhance export drive will be funded. Also, business that will produce import substitution commodities can benefit from the scheme,” he noted.

According to him, the programme is geared toward supporting any business that will drive economic activities of the country.

“ It can allow funding of up to 10 years period. Based on the industry profit and loss, N25 billion contribution will fund the project; it is an equity fund and not a loan. There will be no interest rate because the banks will have ownership stake and after 10 years, they can exit,” Abdulahi added.

However, the committee explained that each bank has an equity on the scheme due to its 5 % contribution while business owners will be allotted a certain percentage of the total worth of the business after.

Any business that requires funding from the scheme will pass through extensive assessment by the review committee and can access fund from their banks to finance the business. Meanwhile, the the cashless policy of the CBN which was introduced in six states including the Federal Capital Territory, Abuja in 2012 and was suspended from extending to other states in 2014, will be reintroduced in across the 36 states of the federation.

The Head, Shared Services Office of the CBN, Mr Chidi Umeano, revealed that the the reintroduction of the cashless policy will be in three batches of 10 states each.

Umeano said that the first 10 states will be captured by May 1, 2017, while the second will be in August and the third in November, this year.

He said, although, the policy was suspended in 2014, in the prevailing period there were diverse sensitization campaigns held in different states of the federation and the payment infrastructure and technology in the country have greatly improved. “There have been a lot of payment channels going on, telephone banking, and we think that it is now time for us to reintroduce the cashless policy we started in 2012.