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CBN’s 9% Credit Policy Excites Farmers



  • CBN’s 9% Credit Policy Excites Farmers

Farmers have applauded the nine per cent interest rate credit policy of the Central Bank of Nigeria (CBN) to the agriculture sector but called for prompt monitoring of the Commercial Banks to guarantee effective implementation.

Under the new policy, agricultural, manufacturing and the sectors considered as growth and employment stimulating, can borrow long term as much as N10 billion at consolidated nine per cent interest rate.

The CBN released the new new credit policy, called Guidelines for Accessing Real Sector Support Facility (RSSF) through Cash Reserve Ratio (CRR) and Corporate Bonds on Thursday.

National President Rice Farmers Association of Nigeria (RIFAN) Alhaji Aminu Goronyo said that rice farmers under the CBN Anchor Borrowers Programme (ABP) had being enjoying the nine per cent lending rate since 2015.

Goronyo expressed optimism that the policy would help improve production of other agriculture commodities in the sector.

He said the nine per cent lending rate under the ABP facilitated the increase in rice production from between two million and 3.5 million tonnes to nine million tonnes annually.

He advised farmers to key into the policy to enable them benefit from the intervention.

“Before the single digit interest rate by the CBN, our production annually was not more than between 2 million and 3.5 million tonnes per annum but today, we are producing almost nine million tonnes because of that intervention.

“I am sure it will be the same for other commodities that will enjoy this intervention,’’ Goronyo said.

In interviews conducted by the News Agency of Nigeria (NAN) National President, Women Agro Allied Farmers Association, Mrs Lizzy Igbine, said although the nine per cent lending rate would encourage farmers to increase production, there was need to reduce it to five per cent.

“We are asking for as low as five per cent, the CBN still has to do more.

“ It will go a long way to help us but we hope there won’t be any hidden rates or charges that farmers will pay after taking the loans,’’ she said.

President of National Cashew Association of Nigeria (NCAN) Mr Tola Faseru appealed to the CBN not to allow the policy to be a `lip service’.

Faseru, who said it was not the first time the CBN was directing commercial banks to lend to agriculture, noted that most banks had not complied with such directive.

According to him, most commercial banks viewed agriculture over the years as very risky. “I hope it won’t be lip service.

“I hope the commercial banks will comply with that because there was a time CBN told them that out of their profit, certain percentage should be channelled to agriculture and the manufacturing sector but they never kept to it.

“Before now, most of the commercial banks have been shying away from lending to agriculture, they like the quick return type of business.

“They see agriculture as very risky but that is where we have our comparative advantage as a country, so we need to develop the sector to be able to diversify the economy away from oil.

“This is a very laudable policy by CBN and we commend CBN for that but we plead with the CBN to put a mechanism in place to check compliance by commercial banks.

“I think CBN has been strong recently in their supervisory role of commercial banks.

“We trust that they will be able to follow through to ensure that the policy is implemented by the commercial banks; it will go along a way to help us grow the agriculture and indeed the export sector,’’ he explained.

National Publicity Secretary, National Fish Association of Nigeria Mr Chidike Ukoh said the expectation of farmers was for the CBN to still bring down the lending rates to about five per cent.

Ukoh said that lending rates on agricultural production were being subsidised as low as about two per cent in developed countries.

“When you have mass production of food, industries will have raw materials and the productivity level will bring aggregate income in the economy.

“The Gross Domestic Product (GDP) will be much in such volume of production. We are making a case for five per cent.

“If the commercial banks will comply with the single digit rate, it will be very nice. It is a development that we need to watch,’’ the publicity secretary said.

NAN recalls that guidelines followed the recommendation of the Monetary Policy Committee (MPC) of the CBN at its 119th meeting held between July 23 and July 24.

The MPC had emphasised the need to increase the flow of credit to the real sector of the economy, to consolidate economic recovery.

NAN reports that the new policy marks a big departure from the excruciating interest rate regime of 25 to 30 per cent that was blamed for stifling agriculture, manufacturing and other ventures in the country.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth



Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans




CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

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FMDQ Approves Valency Agro’s N5.12bn Commercial Paper




FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

FMDQ Securities Exchange Limited has announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 Commercial Paper under its N20bn CP Programme on its platform.

The Exchange said in fostering the development of the Nigerian debt capital markets, it had continued to avail its credible and efficient platform as well as tailor its listings and quotations services to suit the needs of issuers and registration members through innovative and uninterrupted service delivery.

It said in a statement on Thursday that the Valency Agro Nigeria CP debut issue came at a time when the Nigerian economy was bedeviled with soaring food prices, amidst compounding challenges of insecurity.

It said the agricultural sector and its attendant transformation agenda had never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

The Exchange said the proceeds from the issue of the CP would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

The Executive Director, Valency Agro Nigeria Limited, Mr Sumit Jain, was quoted as saying, “We are thankful to our investors towards showing their faith in our agenda to grow the agriculture-focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria.

“We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry”.

The Head, Capital Markets, FBNQuest Merchant Bank, Mr Oluseun Olatidoye, said, “FBNQuest Merchant Bank Limited is delighted with the successful debut of the N5.12bn Series 1 CP issued by Valency Agro Nigeria Limited. This reiterates our effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

“We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success.”

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