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Showing posts with label mineral resources. Show all posts
Showing posts with label mineral resources. Show all posts

Thursday, September 12, 2013

Lend to farmers or face deposit cut, FG warns banks

Anthony Nwakaegho
 
The Federal Government has threatened to cut her deposits with the commercial banks in the country over its reluctance to grant loans to agricultural, mineral resources and small and medium enterprises sectors of the economy.
 
The President Good Luck Jonathan dropped the hint, when he spoke at the 7th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, Tuesday, and warned that government might be compelled to reduce their access to public sector deposits unless they increase their funding to these critical sectors.
 
President GoodLuck Jonathan who was represented the Minster of State for Finance, Dr. Yerima Ngama   frowned at the performance of the banks in not doing enough to support the real sector despite the policies and other incentives provided to create an enabling environment for them to thrive in the country over the years.
 
He explained that the Central Bank of Nigeria (CBN) has intervened through financial intermediation support initiatives such as Commercial Agricultural Credit Scheme (CACS), and Nigerian Incentive-Based Risk Sharing System for Agricultural Lending,(NIRSAL).
 
The President expressed his desire for the banks to jointly do more in terms of Agricultural lending, adding that it has remained too low to achieve the Agricultural Transformation Agenda’s (ATA) goals of making Nigeria to become a net exporter of food and a hub in job creation in the nation’s economy.
 
"The banks have to come together and see how they can put funds together to really support the farmers. The statistics we have coming from the Central Bank is that when you lend to farmers they pay you. I think we have First Bank’s experience where the percentage of non performing agric loans to performing is less than 1.5 per cent.
 
“So the poor actually pay their loans, but why are the banks always eager to go and lend to riskier businesses than safe agricultural businesses? The issue is with our psyche, we think that maybe they are not high tech or maybe there is too much documentation based on a loan of N50, 000 or N100, 000.”
 
He warned that except the banks show their readiness to support the nation’s economic development objectives the CBN may have to introduce new policy measures that would deny the banks continued access to government deposits
 
The President of CIBN, Mr Segun Aina in his remarks reassured the government of the institute’s readiness to partner government on its various initiatives that is aimed at deepening banking knowledge and improving delivery of top class financial services to the nation’s economy.

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Pix: CBN Governor, Sanusi Lamido Sanusi