The Central Bank of Nigeria has expressed its commitment to improve credit allocation in the economy. The Apex Bank stated that this was part of its long-term strategy for strengthening the Nigerian economy.
According to the CBN, it has established initiatives to resolve the underlying challenges to long-term Gross Domestic Product, economic productivity, unemployment and poverty that have pervaded the economy over the past decades.
“Hence, the CBN established the Credit Bureau and the National Collateral Registry to improve access to credit in the domestic economy” it stated. The CBN Governor, Godwin Emefiele, had earlier stated, “We believe these measures will help to instil a stronger credit culture and unlock access to finance for deserving Nigerians, including those who may not have fixed assets to provide to banks as collateral.”
To spur bank lending to high-impact sector, the bank in 2018, pledged to refund Cash Reserve Ratio to banks under certain conditions. Banks that bring proposal for funding of new projects or expansion of existing ones in agriculture and manufacturing sectors will, accordingly, qualify for Cash Reserve Ratio refund of up to 100 per cent.
“It is our expectation that banks would use this opportunity to expand credits to the real sector. “Our efforts at supporting small scale farmers and SMEs are based on our awareness of the critical role they can play in supporting our economic recovery and growth, as well as in creating job opportunities for millions of Nigerians.”
So far, the CBN said it had through its MSME fund disbursed over N100bn to the MSME sector. The CBN stated that it recognised that the greatest challenge confronting the MSMEs and local farmers was access to credit, and that to unlock the growth potential in our country, the group must access funding seamlessly.