Banks have set aside N26 billion for equity investment in agriculture, small and medium enterprises (SMEs).
These were highlights of the 333rdBankers Committee meeting held in Lagos yesterday.
Addressing a press conference at the end of the meeting, Managing Director/Chief Executive, Standard Chartered Bank, Mrs Bola Adesola said that banks have set aside five percent of the profit after tax for equity investment in agriculture and SMEs, as agreed at the last Bankers Committee retreat.
She spoke in company of the Director, Banking Supervision, CBN, Ahmad Abdullahi, Managing Director/ Chief Executive, Fidelity Bank Plc, Mr. Nnamdi Okonkwo, Managing Director/Chief Executive, Stanbic IBTC Plc, Mr. Demola Sogunle and Director, Corporate Communications Department CBN, Mr. Isaac Okoroafor.
Adesola said: After the audited results of the banks have been published, we all contributed 5% of our PAT to a fund in CBN towards contributing equity to Agric and Small and Medium Enterprise. As you know, many companies cannot just survive on debt because ofthe cost of debt and so long term capital is required to catalyse the growth in SMEs and make them more viable and sustainable.
We are doing our own bit to support them. Right now we have N26 billion in the fund and we are working on the framework for the investment. We are looking at partnerships, we are looking at co-investing with private equity firms as well and the objective is to catalysegrowth in SMEs to ease access to finance to build capacity in theagric and SME sectors, to create jobs and ultimately to improve prosperity.
The economic development subcommittee of the Bankers Committee is working with the Development Finance and Legal Department and Supervision in the CBN and the five highest contributors to the fund as well. So once we have finalised the framework, but that does not stop us from investing, once customers meet the eligibility criteria, we will start investing immediately. But we also want to ensure that we have the right governancearound the equity fund and it is our own contribution to economic growth and prosperity in the country.
Abdullahi on his part said that the Bankers Committee discussed recent developments in the economy and was optimistic that the country will return to positive economic growth by the third quarter. He said: It is almost obvious that by the end of the third quarter, we are going to have a positive GDP growth and there are a number of indices that are trending towards that: inflation is about 16.4 per cent, up from close to 19 per cent. The exchange rate has largely been stable and we have seen convergence with even the investors and exporters (I& E) window and confidence is rebuilding. Generally, because of increased oil production and stable crude prices, the economy would remain robust.