Banks target N300bn agric lending in 2016

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Deposit Money Banks in the country have agreed to boost lending to the agricultural sector by N300bn next year following the slump in oil prices, the Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, has said.

The governor said the move was aimed at supporting the Federal Government’s plan to diversify the economy away from oil.

According to him, the plunge in oil prices has put pressure on the nation’s external reserves and currency, but the government can earn huge foreign exchange from the agricultural sector if well financed.

Emefiele spoke on Friday at the end of the two-day annual Bankers’ Committee retreat held in Lagos.

“Banks have, therefore, set a target to boost agricultural lending not only to the Small and Medium Enterprises, but also to large-scale farming and companies to up to N300bn in 2016,” he said.

The retreat was attended by the managing directors/chief executive officers of all the commercial banks in the country, top officials of the CBN and other key stakeholders in the nation’s financial services sector.

Closed-door presentations were made at the retreat by the Minister of Finance, Mrs. Kemi Adeosun; Minister of Power, Works and Housing, Mr. Babatunde Fashola; and Minister of Transportation, Mr. Rotimi Amaechi.

Others who made presentations at the retreat were the Minister of Solid Minerals, Dr. Kayode Fayemi; Minister of Agriculture, Chief Audu Ogbeh; Governor Akinwunmi Ambode of Lagos State; and other key stakeholders in the economy.

Emefiele stressed that the purpose of the retreat was to discuss how to support the government’s efforts at diversifying the economy in the face of the sharp drop in oil prices.

The Bankers’ Committee, the CBN governor said, needed to work with other stakeholders to grow the SMEs, increase the level of employment and ensure that more young graduates were trained to become entrepreneurs.

He added, “Banks generally agreed to increase lending to the agricultural sector, but the committee felt that there was the need to de-risk the agricultural value chain.

“The Bankers’ Committee also feels that the monetary and fiscal authorities need to work together in a collaborative manner to achieve the objective of improving local production of specific agricultural products so that as a result of lending to this sector, we can begin to see a reduction in the demand for foreign exchange that will help to conserve our foreign exchange reserves and strengthen our currency.”

Emefiele recalled that previous Bankers’ Committee retreats had helped to increase lending to the manufacturing sector and facilitated financing to the power and aviation sectors.

In addition, he noted that the retreats had helped to incentivise lending to the agricultural sector, increasing lending to the sector from one per cent in 2011 to four per cent in 2015.

However, to boost the plan to increase lending to companies in the agriculture value chain, he emphasised the need to improve the level of infrastructure in the various sectors of the economy.

Source: Punch