By Ademola Alawiye

Friday, 5 Nov 2010

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, on Thursday said that a total of N288.21bn had been released to finance the agricultural and small and medium-scale sectors.

Sanusi said in Lagos, at a forum, organised by Enhancing Financial Innovation and Access, that the action was carried out to specifically provide inclusive financial services.

He said, ”We are currently providing support to finance the agricultural sector through the Commercial Agricultural Credit Scheme, which was inaugurated with a N200bn debenture based fund in 2009. It is gratifying to note that as at September, 2010, a total of N88.53bn had been released to 79 projects/promoters and 12 state governments.”

He added, ”While the 79 projects are large-scale, the loans in favour of the 12 state governments are meant for small holder farmers and cooperative societies in the rural areas of the benefiting states.”

Sanusi, who was represented by the Deputy Governor, Financial System Stability, CBN, Dr. Kingsley Moghalu, also said that the small and medium enterprises had been crowded out of the credit market, owing to problems related to financial education, absence of collateral and inability to competitively package projects for financing.

He, however, said that in order to provide funds for promoters in this sub-sector, the CBN established the SME Credit Guarantee Scheme and the Refinancing and Restructuring Facilities for SMEs in 2010.

He added, ”These two schemes are meant to create indirect incentives and direct finance for increased lending to SMEs across the country. As at the end of September, 516 SME promoters had received project support amounting to N199.67bn under the RRF while projects valued N7.5m have been guaranteed under SMEGS.”

On financial inclusion initiatives, Sanusi said, ”With just about 20 per cent of Nigeria‘s adult population having access to banking services, we consider that our banking and financial system is still in its infancy relative to its full potential as a driver of growth and development.

”The enormity of the financial access gap in Nigeria and financial inclusion challenges calls for the creation of an appropriate environment for the private sector and other stakeholders to play their own parts. This was the major reason for the launching of the Microfinance Policy in December, 2005.”

Sanusi, however, said that some of the microfinance banks had not been able to practically perform effective microfinance banking and address the problem of access to finance by low-income individuals.

The Chief Executive Officer, EFInA, Mrs. Modupe Ladipo, said, ”Evidence worldwide shows that access to financial services contributes both to economic growth and to a reduction in inequality. Financial inclusion, therefore, is a key to tackling the poverty trap in Nigeria and to increasing economic growth in the country.”

Source: Punch