The Central Bank of Nigeria has expressed its commitment to improving credit allocation in the Country. 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.
Godwin Emefiele, CBN Governor disclosed that the CBN established the Credit Bureau and the National Collateral Registry to improve access to credit in the domestic economy”
“We believe these measures will help to instill 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.”
In a move to spur bank lending to the high-impact sector, the apex bank in 2018, pledged to refund Cash Reserve Ratio to banks under certain conditions. It gathered that banks that bring the proposal for funding of new projects or expansion of existing ones in agriculture and manufacturing sectors will, accordingly, qualify for Cash Reserve Ration refund of up to 100 percent.
“It is our expectation that banks would use this opportunity to expand credits to the real sector, Emefiele said.
“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.”
The CBN Governor revealed that so far, it had through its MSME fund disbursed over N100bn to the MSME sector.
The CBN stated that it acknowledged that the greatest challenge confronting the MSMEs and local farmers was access to credit and that the bank is perfecting efforts to ensure access to funding is seamless.
