5 Banks Contribute N245.8bn To Cbn’s Real Sector Support Facility
5 Banks Contribute N245.8bn To CBN’s Real Sector Support Facility
In a move to towards increasing credit to priority sectors of the nation’s economy, Zenith Bank Plc, United Bank Plc and three other commercial banks invested N245.8 billion to Central Bank of Nigeria (CBN) Real Sector Support Facility (RSSF).
The other three banks are Access Bank, Diamond Bank Plc and Stanbic IBTC Holdings Plc. The N300 billion RSSF introduced by CBN in January 2016 and was meant to unlock the potential of the real sector to engender output growth, value added productivity and job creation.
Commercial banks were to contribute five per cent of total naira deposits and the Facility will be used to support large enterprises for startups and expansion financing needs of N500 million up to a maximum of N10 billion.
According EYES OF LAGOS findings, Zenith Bank in 2016 contributed N80.6 billion towards the special intervention reserve held by CBN while United Bank for Africa contributed N54.7 billion.
Access Bank Plc and Diamond Bank Plc contributed N49.6 billion and N39.9 billion towards the RSSF in 2016 respectively while Stanbic IBTC Holdings added N20,8 billion towards the special intervention fund last year. The CBN said in 2016, the sum of N2.25 billion was released to two projects under the RSSF, bringing the number of projects to four valued at N6.85 billion from inception in 2014.
In a circular issued by the director, Development Finance Department early 2016, the objectives of the Facility include, “Improve access to finance by the agricultural value chain, manufacturing, mining, solid minerals activities and other strategic sub-sectors of the Nigerian economy.
“Increase output, create jobs, diversify the economy, increase accretion to foreign reserves and provide inputs for the industrial sector on a sustainable basis.”
According to the circular, Loans granted shall have a maximum tenor of 10 years depending on the complexity of the project. “Each project tenor shall be determined in relation to its cash flow and life of the underlying collateral.
“Working capital facility of one year with a maximum rollover of one year subject to approval and the Facility allows for moratorium of one year in the loan repayment schedule,” the circular explained.
Hitherto, the CBN said some banks, which accessed the funds at one per cent interest rate for lending at nine per cent yearly, are not doing so. The CBN said it had suspected that some banks are not only diverting the loans, but also delaying the quarterly repayments remittance from beneficiaries. According to CBN Governor, Mr. Godwin Emefiele, the RSSF is expected to support large enterprises for start-ups and expansion of the financing of up to N10 billion.
Czar Owolabi Marcus
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