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CBN, banks to boost agric with N300bn

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CBN Gov Emefiele's wife reportedly kidnapped, N200m ransom demanded

The Central Bank of Nigeria (CBN) and commercial banks in the country have agreed to make available the sum of N300 billion next year to be granted as loans to the agricultural sector next year.

The plan was announced weekend at the end of the Bankers’ Committee seventh retreat in Lagos.
CBN Governor, Godwin Emefiele, who is chairman of the committee, said the plan was to get banks to use some of their liquidity to grant new loans to the agricultural sector and its value-chains.

The CBN boss said although there were other intervention funds in the agricultural sectors, which have been substantially disbursed, the N300 billion is a new lending plan.

“That is why we are talking about removing risk elements along the value-chain, so that banks can lend more to the agric sector. This is a new initiative, and we believe that based on the need to de-risk the value-chain, the loans will be repaid, and jobs will be created for the people,” he said.

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Emefiele said the Bankers’ Committee also felt that monetary and fiscal authorities must work together in collaborative manner to achieve the objective of improving local production of specific agricultural products, such as rice, tomatoes, fish and sugar among others.

Such practice, he said, would create reduction in demand for foreign exchange that will help conserve foreign reserves and, by extension, strengthen the local currency.

“We agreed to increase lending to the agricultural sector. Banks know that there is need to improve the level of infrastructure in various sectors, for instance, build more FADAMA roads, provide more power in the various sectors of agriculture, build more silos and warehouses to receive final produce so that products don’t get destroyed right at the farms,” he said.

“Banks, therefore, set a target to boost agricultural lending, not only to Small and Medium Enterprises, but also to large scale farming and companies by up to about N300 billion in 2016. The banks realised that there is a need to have a paradigm shift, in the feeling that SMEs are a danger sector to lend money,” he said.

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