May 20, 2022

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BANKS TO INVEST N30BN OF PAT ON AGSME FUND, SAYS CBN BOSS

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BANKS TO INVEST N30BN OF PAT ON AGSME FUND, SAYS CBN BOSS  



The Central Bank of Nigeria, CBN boss, Mr. Goodwin Emefiele says Money Deposit Banks will contribute N30 billion on Agric/Small and Medium Enterprises, AGSME fund on or before the end of April 2017. This is part of a set of goals the Banker’s Committee will undertake during 2017.

Other goals include, supporting government efforts to develop adequate infrastructure to engender viable and productive SMEs; Increasing access and cost of funding particularly the agriculture and manufacturing SMEs; identifying opportunities to provide funding and necessary support for agriculture and manufacturing SMEs including structures and systems to improve the ease of regulatory compliance.

The objectives of the Banker’s Committee according to CBN boss are, price stability, financial system stability and financial inclusion and economic growth.

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Regarding the AGSME Fund, Mr. Godwin said, “The CBN will together with the banking sector establish an Agriculture/SME fund (AGSME Fund) from contributions of a portion on profit after taxes of Deposit Money Banks as a deliberate strategy to support the funding and access to finance by SMEs and primary agriculture. The modality for the fund will be operating as an Equity Fund will be worked upon by the Bankers Committee and will be communicated in due course.”

“You know in the past we had the Small and Medium Enterprises Equity Investment Scheme (SMEEIS) fund where the banks contributed a portion of their profit, but that scheme was abandoned. So, we thought that this time when there is need to really stimulate growth and because we also know that having equity funds by investors, particularly local investors, has always been a thing in achieving the objective of agriculture and SMEs, we decided that the banks and the CBN would commit certain percentage of their funds to support this endeavour. The CBN would continue to provide intervention funds at single digit interest rates as usual.”

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In Respond to questions on the likelihood that the banks may not be committed to investing their profit, as experienced in the implementation of SMEEIS, Emefiele said: “The SMEEIS fund was left in banks’ provision accounts. But this time, once the profit of the banks, like in this case, their 2016 results would be out latest April 2017, they would provide the percentage we agree from their profit after tax and the fund would be warehoused at the CBN.”

“Hopefully, before or about that time, some of the projects that we contemplate would go under this fund would have been identified. “By our estimation take-off is January 1, but those projects would not be available until around March or April after the banks’ audited accounts have been presented to the public. Our initial experience is that you don’t need more than N30 billion to start with,” said Mr. Godwin.

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