Africa Press-Nigeria:
Thriving economies always have two things in common. First is access to affordable and sustainable finance. Next is easy access to financial services at all levels of the society- especially at the grassroots.
Although these issues are still not fully realised in Nigeria, the country has made steady and sustained efforts at getting funding to key sectors of the economy and ensuring that more people are included in the financial services net.
According to the Central Bank of Nigeria (CBN), financial inclusion is achieved when adult Nigerians have easy access to a broad range of formal financial services that meet their needs at affordable costs.” The services include but are not limited to, payments, savings, credit, insurance, pension and capital market products.
That explains why the CBN has launched intervention schemes aimed at increasing access to finance by non-interest financial institutions.
A circular that was signed by the apex bank’s Director in charge of the Financial Policy and Regulation Department, Kevin Amugo, listed some of the schemes as Accelerated Agriculture Development Scheme (AADS), N50 billion cash for the textile sector, Agri-business, Small and Medium Enterprise Investment Scheme (AGSMEIS), Non-oil Export Stimulation Facility, Anchor Borrowers’ Programme, the non-interest version of the Creative Industry Financing Initiative among others.
Amugo said the overall objective of these interventions is to promote financial inclusion in the country.
He explained that each of these intervention schemes has various purposes and objectives. The AADS, for example, is aimed at reducing unemployment in Nigeria by funding agriculture production initiatives that will engage as much as 370,000 youths over the next three years.
It required that average financing size of N250,000 per hectare for arable crops; N500,000 per unit for livestock; and N1.5 million for plantation crops like cocoa, cashew and oil palm.
Similarly, the Non-Interest Guidelines for Intervention in Textile Sector is intended to resuscitate Nigeria’s textiles industry by providing “a N50 billion special mechanism for the restructuring of existing facilities and provision of further facilities for textile companies with a genuine need for intervention.”
The fund will be administered by Bank of Industry (BOI) at 4.5 per cent interest rate using any of the CBN- approved non-interest financing instruments for refinancing of existing projects, long term financing for the acquisition of plant and machinery and working capital for the beneficiaries.
The apex bank said the fund will be used to resuscitate ailing textile sector, restructuring of existing facilities and provision of further facilities for textile companies with a genuine need for intervention.
According to the apex bank, the seed fund which is a one-off intervention will terminate by December 31, 2025, with the maximum financial amount pegged at N2 billion for a single obligor in respect of new facilities and N1 billion for refinancing.
The regulator disclosed that the plan to turnaround the textile sector was perfected after a meeting between the CBN Governor, Godwin Emefiele and owners of textile mills in Nigeria.
“The resolutions reached at the meeting were that the Textile Mills articulate the status of their Bank of Industry (BOI) Cotton Textile and Garment (CTG) Loans stating their outstanding loan balances, tenure, interest rate, interest payment and the assistance being sought from CBN,” Amugo said.
