The Nigerian banking industry is set to contribute about 10 per cent of their profit after tax for the fund, amounting to about N30 billion in a newly created Agriculture/Small and Medium Enterprises, SME, fund, designed to support the funding and access to finance by SMEs and primary agriculture.
Governor, Central Bank of Nigeria (CBN) Mr. Godwin Emefiele disclosed this at the end of the 8th annual Bankers Committee retreat held in Lagos over the weekend.
Although the guideline for the fund is yet to be released, he said the N30 billion start up capital will kick off by January next year and funded by March once the banks’ annuals have been presented
“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 intervention fund which is asides the N220 billion Micro Small and Medium Enterprises Development Fund is similar to the Small and Medium Enterprises Equity Investment scheme initiated by the Bankers Committee in 1999 but had been abandoned.
While the modalities and finance structure of the fund is due to be out before the end of the year, the 10 per cent of the PAT to be set aside annually is expected to be given out to in small and medium enterprises as the banking industry’s contribution to the Federal Government’s efforts towards stimulating economic growth, developing local technology and generating employment.
Emefiele said the banking industry goals for 2017 include supporting government to develop adequate infrastructure to engender viable and productive SMEs as well as increasing access and cost of funding particularly to the agriculture and manufacturing SMEs.
He said the Bankers Committee “recognizes the potential impact of agriculture and manufacturing SMEs as catalysts for rapid growth, job creation and poverty reduction to drive inclusive growth and development of the Nigerian economy.
The banking industry, he said is “committed to consolidating the successes achieved to date by the banking sector as an agent of transformation and sustaining the momentum of the agenda and program of the central bank and the Bankers Committee and tangible benefits that have been realized though increase Iending to MSMEs, incentives action of lending to the agriculture sector, and modernization of the payment system.
“We affirm our continuing commitment to financial deepening of the economy and inclusive growth that can be achieved by making fiancée work and enabling environment for viable SMEs in a manner that enables diversification of the Nigerian economy and reverses the disturbing monolithic dependence on oil.”
The Bankers Committee, he furthered, will continue to focus on capacity building and deepening awareness of available information infrastructure with efforts directed at providing industry focused SME financial skills curriculum to develop financial and business capacity, promoting the need for capacity building as well as the use of payment systems.
Also the industry will focus on providing shared structures for basic financial records and promoting the use of new and existing financial infrastructures for access to credit such as Bank Verification Number, collateral registry and credit registry.
