Diversify portfolios, fund MSMEs, CBN tells banks
Farmers, who borrowed money under the Anchor Borrowers’ Programme of the Central Bank of Nigeria (CBN), have commenced repayment, with no less than N8.3 billion already paid into the bank’s coffers.
This is contrary to insinuations about the unwillingness of the farmers to pay up their loans. Meanwhile, the CBN has advised banks and other financial institutions to diversify their portfolios and lend more to the Micro Small and Medium Enterprises (MSMEs) sector.
The advice, according to CBN Governor, Godwin Emefiele, was in recognition of SMEs as the backbone of the economy. The governor said this at the three-day training programme by Financial Institutions Training Centre (FITC) on, “Movable Asset Lending for Financial Institutions in Nigeria.”
He said that access to finance is essential for private sector growth and development in any economy and remains a major constraint to all developing economies like Nigeria.
By the details of the loan disbursement and repayment obtained from the apex bank, as at March 31, the sum of N33.34 billion had been released through 12 participating finance institutions to 146,557 farmers across 21 states, cultivating over 180,018 hectres of land.
Out of the amount released, about N15.137 billion was disbursed to 73,941 farmers in Kebbi State, but now due and repayment is ongoing, with N7.119 billion representing 47 per cent already returned.
On the other hand, the balance of N18.203 billion 12-month tenor loans to other 20 states for two cropping seasons – wet and dry is yet to be due for repayment.
However, farmers in those benefiting states have also commenced the repayment to the tune of N1.238 billion, which is already with the CBN. While efforts are currently being made by the participating state governments to ensure that all outstanding loans are repaid, the move is to enable CBN extend similar gestures to farmers in other states which have indicated interest in the Anchor Borrowers Programme.
Emefiele, who was represented by the Registrar, National Collateral Registry (NCR), Mainasara Muhammad, said that in addressing this financing gap, the CBN collaborated with the World Bank/International Finance Corporation (IFC) Group, to establish the Secured Transactions and National Collateral Registry. The registry, he said, will improve access to finance for MSMEs while maintaining a strong prudent lending policy and promote Sound Financial System in Nigeria.
The Managing Director, FITC, Lucy Surhyel Newman, said the IFC and CBN have continued to support FITC in its plans to build competencies in the financial sector.
She said that over the recent past five years, IFC has contributed immensely to the competencies of bank directors, FITC staff and associates in terms of corporate governance, board leadership, as well as the emerging collaboration on Environmental and Social Risk Management (ESRM).
“The movable asset financing course, is targeted at heads of credit and risk management; loan portfolio managers/officers, heads of SME Lending, heads of collection/enforcement, loan recovery manager/officers, heads of legal departments, as well as those transiting to such roles in Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), Primary Mortgage Institutions (PMIs) and Infrastructure Banks (IFBs),” she said.
Newman said most stakeholders in the Nigerian financial system and socio-economic studies as applicable to development recognise that MSMEs are critical to socio-economic development and contribute over 60 percent of GDP in emerging economies.