The Bankers Committee of the Central Bank of Nigeria (CBN) has approved for commercial banks in the country to use five per cent of their profits after tax (PAT) to provide equity funding for small and medium enterprises (SMEs) and agricultural companies.
Director, Banking Supervision, CBN, Ahmed Abdullahi, who disclosed this while addressing newsmen at the end of the Committee meeting in Lagos, said: “The important thing is the economy and the committee emphasised the issue of financing the SMEs and agriculture, using five per cent of the banks’ profits. That will help in fast-tracking the process of the economy coming out of recession.”
He said the banks are determined to contribute five per cent of their profits to be used in providing equity funding for agriculture and all small-scale businesses in the export drive.
He also informed that the CBN now has enough stock of foreign exchange to sustain the spate of dollar sales to various segments of forex market.
According to him, the recent development in the forex market has led to prices turning downwards and convergence of rates.
He said: “We have seen inflation trending downwards. There is a forecast that by the second quarter of this year, the economy will be out of recession and we are going to see positive growth.
“The fact is that the CBN has the arsenal in its war chest to be able to sustain what is happening in the forex market. That is why the CBN recently introduced new FX windows for the Small and Medium-scale Enterprises to access forex through their banks with minimum documentation.
“There is also another initiative, the investor/exporter window, which will be a market where prices will be determined by market forces, and it is a window that will allow investors to come in and trade their forex at a price they consider appropriate. Because of the convergence of rates, confidence is going to be built in the market so we are likely to see investors come in.”
The Chief Executive Officer, Rand Merchant Bank, Mr. Michael Larbie, said the committee was committed to providing forex to end-users.
“In line with that, the banking community is committed to further ensuring that forex is available for all legitimate personal and business travels. As a result, the banks now are committed to having travel desks and cubicles in most of their branches where appropriate exchange rates will be duly published so that anyone that walks in and requires business travel allowance will get it,” Larbie explained.
The Managing Director, Access Bank Plc, Mr. Herbert Wigwe, said the committee also agreed to establish a central database to enable the banking industry to identify and remove suspected electronic fraudsters from the system.
This, he said, would lead to the reduction of e-banking and card frauds.
On his part, Managing Director, Ecobank Nigeria, Mr. Charles Kie, said the committee emphasised the need for all the banks to continue to support the economy in order to get it out of recession.