The Bankers’ Committee on Tuesday raised the paid-up capital of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance Bank Limited from N5bn to N7.5bn.
This is to enable the bank to promote expansion of branches across the country.
“The branches will be used as a tool for financial inclusion and economic development,” Abubakar Abdulahi Kure, acting managing director, NIRSAL MFB, said after the 348th meeting of the Bankers’ Committee in Lagos.
Already, NIRSAL Microfinance Bank has disbursed N18 billion from the Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) fund to about 5,000 applicants across the country.
The Federal Government has also engaged the Central Bank of Nigeria (CBN) and the Bankers’ Committee in bridging infrastructure gap through financing of four roads construction as part of the government’s public private partnership initiative.
To this effect, the Bankers’ Committee has set up a sub-committee among the bank CEOs to work with the CBN in identifying the roads and coming with a framework to share with the government for a go-ahead.
“The government has invited the committee of bankers to also consider the possibility of Public Private partnership (PPP) in bridging the infrastructural gap and it is to that extent that the committee considered coming in to see how we can finance about four roads,” Bello Hassan, the newly appointed director for banking supervision, CBN, said after the Bankers’ Committee meeting in Lagos Tuesday.
“We all agreed that government alone cannot provide all the infrastructure in the country, that we in the private sector have to work hand in hand with government to ensure that the infrastructure that this country needs to move ahead is provided,” Hamda Ambah, managing director/CEO, FSDH Merchant Bank Limited, said.
Another issue raised at the meeting was the Loan to Deposit Ratio (LDR). It was disclosed that most of the banks have met the 60 percent LDR and are pushing to complete the remaining 5 percent by the end of first quarter 2020.
Segun Agbaje, managing director/CEO, GTBank, said the LDR raise has been one of the most successful things done in 2019 considering how much credit that was availed the real economy within a six-month period.
Retail or consumer credit has grown over the period, accounting for 10 percent of banks’ loan books.
“The corporates who have always had credit have also been availed more credit and for any economy to grow, the SMEs and retail segment must be availed with credit and I think the LDR is doing that very well. I think most banks are close to 60 percent which…we will push to try to get ourselves the remainder of the 5 percent between now and the end of first quarter and maybe at the worst by half year,” Agbaje said.
Hassan Usman, managing director, Jaiz Bank, said the Bankers’ Committee is looking at ways to support government and the society, whether it is increasing the level of credit to the private sector and real sector of the economy or working with NIRSAL and other banks to increase financial inclusion or specifically intervening in infrastructure. These steps are being taken to ensure that government is supported in its drive to grow the economy, reduce unemployment and improve the country’s security, he said.