The Central Bank of Nigeria (CBN) has separated N30 billion for Agric/Small and Medium Enterprises (AGSME) funding which will be launched in collaboration with commercial banks.
This was made known by the CBN Governor, Godwin Emefiele during the 8th Bankers Committee's meeting in Lagos. Collaborating with commercial banks on the initiative will enable those interested in agriculture and SMEs access credit from the banks. Emefiele said, "the main call of what we agreed at the meeting is that the CBN, together with the banking sector, establish an Agric/SME Fund from contributions from portion of profit after tax of deposit money banks. As a deliberate strategy, we support the funding and access to finance by helping those who are interested in primary agriculture and SME businesses".
"We thought that need to stimulate growth, and we understood that having equity funds is key in making success of the project. The CBN has decided that a portion of the banks' profits will be committed as equity funds to support the project. The CBN will continue to, through deposit money banks and other financial institutions provide loans to SMEs at a single digit interest rate. The Bankers' Committee will continue to focus on capacity building, a deepening awareness of funding plans for the SMEs."
In the previous year, the CBN in a similar initiative, committed close to N23 billion to agriculture in 14 states where thousands of smallholder farmers were empowered for large scale crop production.
As an oil dependent economy, with Nigeria's economic slide into recession following the drastic fall in global oil price, this initiative is timely, aimed at spurring growth in non-oil sectors and Nigeria's economy as a whole.