CBN goes hard on banks over high charges on intervention funds

The Central Bank of Nigeria (CBN) has indicated it would henceforth go hard on commercial lenders which continue to lend its intervention funds at high interests.

CBN governor, Godwin Emefiele warned Participating Financial Institutions (PFIs) in the country against charging double-digit interest on intervention funds guaranteed by the apex bank.

“Report any bank that charges you above 9% interest on loans guaranteed by the CBN,” Emefiele told young farmers in Abeokuta as he assured them of the Bank’s funding support through their respective PFIs.

Emefiele gave the warning in Abeokuta, Ogun State during an interaction between the Presidential Task Force on Agricultural Commodities and Production and young farmers at the Owowo Model Farm Estate.

Available records show that the CBN’s intervention schemes to spur liquidity into the system has so far reached N2.02 trillion.

These include Commercial Agricultural Credit Schemes, CACs which amounts to N200 billion, Power and Aviation Intervention Fund, PAIF, N300 billion, Micro Small Medium Enterprise Development Fund, MSMEDF, N220 billion, Real Sector Support Facility, RSSF N300 billion and Nigeria Electricity Market Stabilisation Facility, NEMSF N213 billion.

CBN has also established multi-pronged financing under the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending NISRAL, which included risk sharing, insurance and technical assistance facilities as well as holistic bank rating and bank incentives mechanisms, which amounts to N75 billion.

There is also the N203 billion guarantee funds under the Agricultural Credit Guarantee Scheme Fund, ACGSF.  Despites these intervention, inability to access finance is a major challenge of Nigerian businesses due to high cost of funds.

Emefiele assured the young farmers that Development Finance Officers from the Bank were readily available to assist them on how to access credit from the various intervention funds in order to guarantee employment, create wealth and meet the country’s food needs.

He urged the young farmers to take advantage of the Bank’s Youth Entrepreneurship Development Programme (YEDP) as well as the Micro, Small and Medium Enterprises Development Fund (MSMEDF) to create wealth,

Minister of Agriculture and Rural Development, Audu Ogbeh frowned at the spate of importation of goods that can be easily produced in Nigeria, and expressed confidence in the ability of the youth to produce agricultural commodities that will earn the country the much-needed foreign exchange.

He also commended the effort of the CBN Governor, who he noted was very concerned about the import bills of the country, particularly as it had to do with rice importation.