The Nation Newspaper

Tag: cbn

  • ‘How to improve power generation’

    Nigeria requires a multi-sectoral approach to electricity generation for growth, the General Manager, Sh’oreline Group, an energy service provider, Mr Gabriel Okoebor has said.

    Speaking with reporters on the need to improve electricity generation and distribution, using energy service providers, among others, Okoebor said the efforts of the 13 power generation and distribution firms can only be complemented when there is a multi-sectoral approach to power improvement in Nigeria.

    He said the suggestion by the Central Bank of Nigeria’s (CBN) Governor, Sanusi Lamido Sanusi, that banks located in a specific area should pull their resources together and use one power plant instead of big generators, is good, urging that other sectors should take a cue from act accordingly.

    He said the success of the power reforms would result in the upgrade of electricity generation and distribution to global standards. He said thousands of electricity megawatts are required to meet the growing need of the populace.

    He said thousands of megawatts of electricity are required in the country and that it could take eight years to get these, adding that focus should be placed on industries too.

  • CBN okays N220b for MSMEs

    CBN okays N220b for MSMEs

    To allow more Nigerians into the employment market and achieve the Vision 20:2020 objective of development in the country, the Central Bank of Nigeria (CBN) has released N220billion to the Micro Small and Medium Enterprises (MSMEs).

    The money, to be disbursed by microfinancMe banks and cooperatives across the country, was released to the sector, as it has been identified as one that employs more people.

    Director of Development Finance CBN, Mr Paul Eluhaiwe spoke at the general meeting of the National Association of Small and Medium Enterprises (NASME), held at the weekend in Lagos.

    He said 60 per cent of the fund will be for women entrepreneurs, while 80 per cent will be given to micro entrepreneurs and 20 per cent to SMEs.

    The bank, he said, has realised that women empowerment will boost the country’s growth.

    Commenting on the need for the general meeting, the National President of NASME, Alhaji Garba Ibrahim, said it is borne out of the need to educate NASME members across the country on the issuance of finance, as all the financial houses and regulators, in and outside the country have been invited to show the way forward and how the problem of collateral for loans can be addressed by the financial houses present.

    Ibrahim said, he hopes that ,’with this initiative, more entrepreneurs will be emboldened to seek the finance and start production as the private sector has been identified as the highest employer of labour in the country’.

    A representative of the International Finance Corporation (IFC), in Nigeria Mr. Chijioke Nworka, said for the MSME sector to achieve growth, the sector need access to finance, access to market and skills development, which is important, as according to their survey, it is the second ranked limiting factor for loan approval.

    He said for any SME to access finance, they must posses five C’s, which are Character, Capital, Capacity, Collateral and Condition.

  • NDIC report: Experts score regulators low

    NDIC report: Experts score regulators low

    Mixed reactions have greeted the Nigeria Deposit Insurance Corporation (NDIC) last year’s Annual Report & Statement of Accounts, which ranked 10 banks sound, nine satisfactory and one marginal. While some analysts see it as an indication of a poor performance despite the huge funds committed to the reforms in the sector, others see it as a clarion call on regulators to be alive to their responsibilites, writes COLLINS NWEZE.

    The disclosure by the Nigeria Deposit Insurance Corporation (NDIC) in its last year’s Annual Report & Statement of Accounts, that only 10 out of 20 Deposit Money Banks (DMBs) in the country are sound shows that regulators of the financial system have failed, analysts have said.

    They said given the amount of money sunk into the reforms by the Federal Government and the ongoing contributions from banks to the Asset Management Corporation of Nigeria (AMCON), having only sound 10 banks, is a poor outing. The result represents a 50 per cent score. The regulators were adjudged as having performed poorly considering the volume of money committed to the reforms. The report, however, gave nine banks satisfactory rating while one lender was rated as marginal.

    The Central Bank of Nigeria (CBN) had in 2009 injected N620 billion into eight banks to keep them afloat. In August 2011, AMCON spent N679 billion to acquire the bridged banks- former Afribank (Mainstreet Bank), Bank PHB (Keystone Bank) and Springbank (Enterprise Bank).

    The capital provided by AMCON through shares subscription was meant to strengthen the banks’ liquidity to enable them to carry on business and meet all their obligations. The fund was to enable them to meet the minimum capital base of N25 billion and the minimum capital adequacy ratio of 15 per cent.

    Former Executive Director, Bank PHB, Richard Obire, said the fact that only 50 per cent of the banks are sound means that Nigerians have not got value for their money.

    He said any performance that is below 80 per cent is unacceptable, and should be improved on by both the CBN and NDIC.

    “Nigerians should demand 80 per cent result because of the huge sums of money spent on the reforms. Tax payers’ money went into the funding of the AMCON and banks are still funding the corporation,” he said.

    He further said many thought that AMCON would be a quick resolution mechanism, but has been foot dragging with banks contributing 0.5 per cent of their total assets into its operation, which is also indirectly passed to banks’customers as fees. “Remember that whatever the banks are contributing to AMCON is also passed to their customers as fees. So, in all, the banking public are not getting value for their money,” he said.

     

    Banking assets Vs loans

    According to the NDIC report, the total industry’s assets of N24.58 trillion, out of which total loans and advances of N8.15 trillion, represent over 33 per cent (or one-third).

    The report further noted that of the industry’s total loans, N4.48 trillion or 54.97 per cent was extended to the real sector of the economy in 2012 compared to N3.88 trillion or 53.37 per cent and N3.51 trillion or 48.95 per cent in 2011 and 2010.

    Obire said 33 per cent loan advances is poor. Noting that the primary responsibility of a bank is to offer loans to the real sector of the economy, the banks should strive to achieve between 60 and 70 per cent of their assets as loans. He advised banks to strengthen their risk management to enable them to lend more to customers. “Banks should be able to deploy loans to those who need them at the right time,” he said.

    But the NDIC said the report gave it a pat in the discharge of its mandate in payment guarantee, supervision, failure resolution and liquidation. “The achievements attained in 2012 were due to many factors, which include the deployment of a robust performance management system, enhancement of the enterprise risk management system as well as enhanced capacity building in risk-based supervision (RBS) and other areas of operations, among others,” it said.

    Also, the Managing Director, Financial Nigeria International Jide Akintunde said the reforms have not performed badly, given that the 10 sound banks may hold 70 per cent of the sector’s assets.

    This does not suggest that the banking reforms have not worked, urging the regulators to be alert to ensure that any anomaly on the part of banks is corrected.

    He said the 33 per cent loans by banks is not a bad for the lenders, adding that majority of them are being more careful in advancing credits. “The 33 per cent loan position is not a bad outing. But many of them are looking at environmental factors and are also being more careful to avoid repeat of past mistakes when they created bad loans,” he said.

    Akintunde also said banks are still conservative; in some cases, they lack the expertise to handle some specialised loans.

     

    Microfinance banks

    Last year, the NDIC conducted routine examination of 246 microfinance banks (MfBs); six were found to have closed shop. It also conducted risk-based exam of 40 primary mortgage banks (PMBs); three were found to have voluntarily closed shop.

    A total of 302 MfBs had capital adequacy ratio of more than 10 per cent. The remaining 555 did not render returns and this has continued to be a source of concern to NDIC as it was impossible to assess their financial condition and performance on continuously during review.

    An operator in the MfB sector, who asked not to be named, said though the CBN is planning to launch the Microfinance Development Fund (MDF) next month, it is even coming too late. He said the fund would have been provided four years ago, to enable operators to use it in enhancing their operations. The MDF is expected to provide funding for the sector.

    The source said many of the MfBs lack working capital, adding that there is no way such operators could lend to the economy. He added that it is only MfBs with foreign financial bulwark that are doing well.

    Also, Managing Director, CRC Credit Bureau Limited, Tunde Popoola said the MfB subsector, is agging behind and that less than 10 per cent of them has access to credit bureau services. He said many of the MfBs lack the infrastructure to key into some services.

    Popoola said many of the MfBs do not have software that can take information like date of birth and sex of the customer, making it difficult for them to make progress.

    According to Afrinvest West Africa, DMB’s last year’s profitability report showed that all Tier-1 banks recorded gross earnings in excess of N200 billion compared to Tier-2 banks’ N102 billion average. The Tier-1 banks are First Bank of Nigeria Limited, GT Bank, Zenith Bank, United Bank for Africa and Access Bank.

    It said last year, banks’ management tried to beat high earnings expectations, causing them to focus on fixed income securities like treasury bills because of their high yield capabilities. The report projected that the “treasury focused” investment strategy would moderate in the year as outlook on yields and fee income decline.

    The report listed key pillars of the reforms to include enhancing the quality of banks, establishing financial stability, enabling healthy financial sector evolution and ensuring the financial sector contributes to the real economy.

    The Afrinvest report said the future of the banking space will rest on ancillary banking services such as merchant banking and primary mortgage institutions. There are also renewed hopes in retail banking and Small and Medium Scale Enterprises (SMEs) banking. The industry, it claimed, is confronted with the reality of declining fee incomes, mobile money and dollar denominated capital sourcing.

    It predicted that in the next five years, outlook on yields and fee income will remain downwards, necessitating the need for banks to focus on lending to the real sector. Also, banks are expected to develop and grow the depth of their core retail banking businesses to retain and amplify cheap deposits.

     

    Banks-in-liquidation

    The NDIC continued to pay depositors of banks-in-liquidation during the review. It paid N6.82 billion to 528,212 insured depositors of closed banks by December 31, last year as against N6.68 billion paid to 527,942 insured depositors the previous year. That feat was achieved in spite of the long closure of the banks and the unwillingness of many depositors to file for their claims.

     

    Risk-based-examination

    The report said NDIC, in collaboration with the CBN, conducted Risk-Based Examination of 16 deposit money banks (DMBs) during the year. The NDIC led the examination of six of the banks while the CBN led in 10. Beside, the two institutions conducted a maiden examination of Keystone Bank, Mainstreet Bank and Enterprise Bank during the year.

    While the CBN led the examination of Mainstreet Bank and Enterprise Bank, NDIC led the examination of Keystone Bank. The corporation in collaboration with the CBN also conducted the maiden examination of Jaiz Bank Plc and the Stanbic-IBTC Non-Interest window during the year under review.

     

    Capital adequacy ratio

    Furthermore, the banking industry was adequately capitalised in the year with capital adequacy ratio of 18.07 per cent compared to 17.71 per cent recorded in 2011. All the DMBs also met the minimum liquidity threshold of 30 per cent.

    The asset quality improved during the year as the ratio of non-performing loans to total loans decreased from 4.95 per cent in 2011 to 3.51 per cent last year. The improvement in the industry’s asset quality was because of the purchase of the non-performing loans of DMBs by AMCON and the enhanced credit risk management by DMBs.

     

    Fraud

    The DMBs reported 3,380 fraud cases involving N17.97 billion with expected/contingent loss of about N4.52 billion. The expected/contingent loss had increased by N455 million about 10.9 per cent, as against N4.072 billion reported in 2011.

    Notwithstanding the 43.7 per cent increase in the number of reported fraud cases from 2,352 in 2011 to 3,380 last year, it decreased by 36.4 per cent from N28.40 billion in 2011 to N18.04 billion in 2012.

     

    PMBs

    The licences of 24 PMBs, which closed shop and were unable to meet obligations to their depositors and creditors were revoked by the CBN and NDIC was subsequently appointed as liquidator.

    As at December last year, 310 out of the 323 MFBs that rendered returns had met the minimum paid-up capital of N20 million.

  • Institute to conduct common exam for bankers

    THE Chartered Institute of Bankers of Nigeria (CIBN) is to introduce a common entry examination and certification for bankers, its President, Segun Aina, has said.

    Aina said the measure would address the dearth skilled manpower in the sector.

    The policy, he said, would ensure that for a graduate to secure a job, he/she would have taken and passed the entry exams, adding that it would reduce the cost on banks’ conduct of tests.

    “While allowing banks to concentrate on their core functions, standardisation will also be ensured. This service will be in line with the responsibility of the Institute to determine the standards of knowledge and skills to be attained by persons seeking to become members of the banking profession,” he said.

    He lamented the poor quality of workforce, saying it is a major challenge in the industry.

    The desire to address this anomaly, he said, prompted the Central Bank of Nigeria (CBN) to design a Competency Framework for the industry that is meant to ensure that priority is given to the continuous enhancement of human capital and lifelong learning in the industry.

    He said the institute had established the Centre for Financial Studies (CFS) to upgrade the competencies of practitioners.

    The institute, he said, had also been appointed the sole accreditation and certification agency under the Competency Framework project, adding that it is working on attracting top talents to Nigeria’s financial services industry and develop qualified professionals to meet the Financial Sector Strategy (FSS) 2020 defined standards.

    CIBN Registrar Dr Uju Ogubunka said the objective of the Banking and Finance Industry Competency Framework (BFICF) established in 2007 is to ensure that there is clarity and standards in the understanding and use of competency to build world class talents to support the banking industry.

    He said one of the primary objectives towards building and implementing the industry’s competency framework was to support the variety of career pathways for banking professionals.

    “A strong and vibrant pathway is important towards the development of a strong talent management which is an essential part of the banking supply chain. This is necessary to ensure that right skills are put in place and also to ensure public trust – a key success factor towards building business confidence,” he said.

    He said in today’s fast changing world, driven by rapid change in business models, consumer demands, and increased regulation, the industry is not spared from the need to change and align to business realities.

    Individuals seeking to succeed in the world of banking and finance, he said, must be re-skilled to remain relevant to clients and consistently deliver their value propositions successfully.

    “The industry is one that is diverse and requires different skill sets, aptitudes and competencies. It is also important that bank professionals leverage on their core competencies and clearly define the service lines across a variety of core competencies they feel they will do best in, be it in credit, operations, sales, risk, compliance, internal audit, or support services,” he said.

    He said the the BFICF WAs now being used as a tool and resource to provide guidance for those seeking to pursue a career in public practice as well as help bank professionals already in this business arena to keep pace with the developments.

    “The development of a flourishing banking sector must also be underpinned by a robust professional qualification and training and this guide demonstrates how the banking qualification provides a sound framework that ensures our members are not only fit for business but are also fit for the future,” he said.

     

    Chief Executive Officer of the Institute of Bankers, Malaysia Mr Tay Kay Luan said the CIBN should, going forward, describe the skills, knowledge and to some degree the behaviours needed by practitioners in their line of work as done in Malaysia.

  • CBN explains N220b fund

    CBN explains N220b fund

    The Central Bank of Nigeria says its N220 billion Micro, Small and Medium Enterprise (MSMEs) Fund will help participating financial institutions to support entrepreneurs.

    The Director, Public Finance, Mr Paul Eluhaiwe, said the fund has several components such as loan, guarantee, refinancing and grant.

    “The grant component enables us to provide capacity building for microfinance banks to strengthen them.

    “The refinancing is where they have given out so many facilities to their clients, it will enable them to come back for refinancing at a particular discounted rate.

    “This will enable them to plough back into business,” he said.

    Eluhaiwe said the guarantee component would enable them to obtain more credit facilities outside what the CBN offered, especially from commercial banks.

    “The fund provides them the guarantee to borrow more money from the outreach to their clients,’’ he added.

    The CBN boss stressed that microfinance banks and non-bank micro finance institutions were qualified to access the funds.

    He listed the non-bank micro finance institution to include non-governmental organisations that were providing financial services and cooperative societies, among others.

    The guideline on the MSMEs said that participating financial institutions must satisfy conditions of CBN and NDIC.

    It listed the conditions to include compliance with the prevailing prudential ratios and average deposit growth rate of 20 per cent per year for institutions operating for over two years.

    It said the participating institutions must be registered with Corporate Affairs Commission, have corporate profile acceptable to the managing agents, have evidence of risk management framework and sound corporate governance acceptable to the managing agent.

  • CBN’s action stirs anger

    Criticisms are trailing the Central Bank of Nigeria’s decision to raise the Cash Reserve Requirement (CRR) on public sector funds.

    The policy quarantined N520 billion, about 38 per cent of the estimated N2.6 trillion government deposit in the system.

    The Chief Executive Officer, Economic Associates, Ayo Teriba, said the policy is destablising the sector, adding that it also showed that the CBN could be unpredictable.

    He said in more developed countries, the CBN would have carried the banks along in the scheme of things.

    “In a more civilised environment, the CBN would have carried the banks along. It was an impulsive decion which may place some banks ahead of others in terms of deposit mix and balance sheet size,” he said.

    He said what the CBN had done might have altered the equation, to put some banks ahead of others in terms of deposit mix and competition.

    Afrinvest West Africa Plc said the policy has affected its market and rate performance.

    It said last week’s decline in the All Share Index (ASI) by 280 points was attributed to attractive yields in the money market due to the CBN’s policy.

    In the firm’s weekly report, it said the policy has led to a switch by investors in favour of the money market instruments, saying that the Nigeria Interbank Offered Rate (NIBOR) rates surged by an average 600 points in the last two weeks.

    It said the call rate gained the most, with 820bps to 18.9 per cent last Friday. This was followed by the seven-day and 60-days tenor with about 700bps average increase. This increase in money market rates can be associated with the recent increase in CRR on public sector funds, creating liquidity shrink at the inter-bank.

    However, the firm said it expects a marginal decline in rates in the coming weeks as the market gradually absorbs and normalises the disequilibrium.

    The policy raised cash reserve ratio on public sector deposits from 12 per cent to 50 per cent.

    Its implementation began on August 7, when the the apex bank debited banks’ accounts.

    This policy has drained liquidity from the system. Now banks are scrambling for funds/accounts outside the public sector.

     

  • CBN okays use of movable collaterals for MSMEs

    CBN okays use of movable collaterals for MSMEs

    The Central Bank of Nigeria (CBN) has approved the use of movable collaterals for Micro Small and Medium Enterprises (MSMEs) to secure credits from financial institutions from next year.

    Addressing reporters at the end of the MSME’s financing conference and D-8 workshop in Abuja over the weekend, CBN’s Director, Development Finance, Paul Eluhaiwe, said the apex bank wants a situation where MSMEs would use movable collateral, adding that the regulator was working with the International Finance Corporation (IFC) on modalities for its implementation.

    He said: “If this is done, operators will be able to operate because there would be funds and capacities that would be built to create sustainability in the sector. The entrepreneurs themselves who are supposed to benefit with movable collateral will have access to more financial services,” adding that most banks were not ready to support SMEs with facilities because they feel they do not have the collaterals and banks depend only on fixed collaterals in the country.

    He said by next year, the apex bank would start the disbursement of the N220 billion MSME development fund.

    “We know that before December, we would have worked out all the issues to make it work for us as a country because we know that it is required for us to move forward,” he said.

    Eluhaiwe said the CBN believes that by “building capacity, providing resources, things will work in that sector in addition to the regulatory framework”.

    Also speaking, the CBN ‘s Deputy Governor, Economic Policy, Mrs Sarah Alade, said collateral for entrepreneurs to access Microfinance (mfbs) services, particularly loans was debated at the conference and that the bank has put some guidelines in place to guide the operation of the N220billion MSMEs fund.

    She said the CBN has done some interventions in agriculture sector in the past, saying that once the disbursement starts, it will be monitored to make sure that they are given to the right people.

    The components of the fund include grants for Microfiance banks, credit, guarantee and the refinancing.

    On rating of mfbs, she said the CBN has expressed the desire to see that “institutions that are rated in Nigeria would have increased substantially. That’s very important to us”.

    The Rural Finance Institution Building Programme (RUFIN) an organisation of IFAD and CBN has been rating for mfbs,she said, and that about 32 of them had been rated through them.

     

     

  • CBN, Bankers’ Committee plans biometric database for customers

    CBN, Bankers’ Committee plans biometric database for customers

    The Central Bank of Nigeria (CBN) is collaborating with the Bankers’ Committee to set up a biometric database for bank customers.

    In a statement the banking watchdog said the platform, when completed, would help operators and regulators of the financial system address issues of Know Your Customer (KYC), anti-money laundering (AML), and access to credit.

    This will help fast-track use of channels, such as biometric Automated Teller Machines (ATMs) and Point of Sale (PoS) terminals, among others.

    The CBN said it is also planning a Consumer Complaints Management System that will make it possible for it to monitor banks’ breaches in customers’ accounts.

    When completed, the platform will enable the regulator see which customer complaints are being treated, and which are not being considered. The CBN is expected to with the platform, see the complaints by bank customers and track the turnaround time of their resolution.

    It said the role of consumer protection is not limited to the CBN alone, but remains a collective responsibility of everyone. It said the Consumer Protection Unit of the CBN is mandated to educate consumers and defend their interest, detect money laundering and combat financial terrorism as well as enhance awareness on these issues.

    The apex bank is also reviewing the framework on consumer protection to ensure that all complaints by customers are promptly addressed.

    Also, where any of the cases is proved, the affected bank will be required to make necessary amends and where financial obligations are involved, will be required to refund the money. The measures are aimed at encouraging good banking habits and promoting efficiency in the delivery of financial services as well as boosting public confidence in the system.

    The Consumer Protection unit of the CBN is meant to ensure that banks’ customers enjoy not only quality services but also protection from excessive charges and outright loss of funds. Also, the apex bank has also established a Help Desk at its headquarters where all the consumer complaints in respect of any services are directed to.

     

  • Kudos to CBN Governor on dud cheques

    Whenever the history of the banking industry in Nigeria is written in future, the tenure of the present Central Bank Governor, Mallam Lamido Sanusi Lamido, would go down as one with a remarkable difference when compared with the previous holders of the office. He has taken steps in the past to check the rot in the banking system and his latest directive, as broadcast during the 9.30pm news hour on the Murhi International Television on Monday, 5th August, 2013, to the effect that all banks in the country should compile the list of issuers of dud cheques and forward same to the Economic and Financial Crimes Commission (EFCC) for necessary action. It is indeed another milestone in the string of laudable achievements recorded by him since his taking over the control of the Apex bank in 2008.

    It would be recalled that a day after this directive, the case, among several ones previous reported in the newspapers, was that of a 29-year-old hairdresser, Mrs. Joy Jegede, who was sent to prison in Ilorin over issuance of a dud cheque to the tune of N620,000, as reported on page 3 in the P.M. News edition of Tuesday,06 August, 2013.

    There is no doubt that this is the first time that this nefarious action that has continued to add to the already dented image of our country is being brought to the limelight and addressed. The Central Bank Governor is, however, enjoined to nip in the bud any possibility of circumventing or frustrating this laudable directive by providing a means through which victims of issuance of dud cheques can reach him directly. By doing so, the room for any cover up or collaboration with any bank customer by any of the banks in the country would have been closed. In addition, the directive should cover the period the last five years since he began the cleansing of banks nationwide. He should borrow a leaf from the Inspector General of Police, Mohammed Abubakar, who out of an act of exemplary leadership, volunteered the direct email address through which he can be reached by the public all in a bid to sanitise the Nigeria Police Force, an effort that is no doubt yielding good results.

    The CBN Governor is also advised to go a step further by publishing the names of issuers of dud cheques in the newspapers as was done in the past when the identities of chronic bank debtors, bank directors and defaulting companies that wrecked some Nigerian banks were unmasked to the public at the beginning of his tenure in office. In addition, any branch of any bank that is found to have compromised the directive in any way should equally be exposed to the public and sanctioned accordingly.

     

    Odunayo Joseph

    Tel: 08053488121

    Email: odunayo_ joseph2006@yahoo.com

  • CBN sets operating rules for N220b MSME fund

    CBN sets operating rules for N220b MSME fund

    The Central Bank of Nigeria (CBN) yesterday set up guidelines for the management of the N220 billion Micro, Small and Medium Enterprises (MSME) Development Fund it launched on Thursday.

    In a circular, the CBN said the fund will be managed by a Special Purpose Vehicle (SPV). However, the CBN will commence the management of the fund pending the establishment/appointment of the SPV or managing agent.

    It said a large number of un-served and under-served clients exist in the Nigerian MSME sub-sector. It said to address the funding requirements of this critical segment of the economy, 80:20 ratio for on-lending to micro enterprises and Small and Medium Enterprises (SMEs) respectively has been designed.

     The CBN said women’s access to financial services should increase by 15 per cent annually in order to eliminate gender disparity. It also said to achieve this, 60 per cent, N132 billion, of the fund has been earmarked for providing financial services to women.

    The regulator said in operating the fund, special consideration will be given to institutions that will provide financial services to graduates of the Central Bank of Nigeria’s Entrepreneurship Development Centres (EDCs).

    Also, 10 per cent of the fund will be earmarked for social and developmental objectives  as grants, N11 billion;  Interest Drawback Program, N6.60 billion; Managing Agent’s (MA) Operational Expenses N4.4 billion. However, MA is expected to generate income from its operational activities to fund its future expenses on a sustainable basis.

    The CBN explained that  N6.6 billion earmarked for Interest Drawback will be used to settle the rebates to financial institution’s customers under the fund who repay their loans as and when due while the N11.0 billion for grants will fund programmes that are aimed at developing the MSME sub-sector.

    However, 90 per cent of the fund, amounting to N198 billion, will be utilised for the provision of direct on-lending facilities to participating financial institutions.

    It said participating financial institutions can only finance agricultural value chain activities; trade and general commerce; cottage industries; artisans, among others.

    The banking watchdog said to ensure that productive sectors of the economy continue to attract more financing necessary for employment creation and diversification of the country’s economic base, a maximum of 10 per cent of the commercial component of the fund will be channelled to trading and commerce.