CBN to hold banks’ CRR funds

Governor of CBN Mr Godwin Emefiele, said the apex bank may not release funds due to banks following the reduction of the Cash Reserve Ratio (CRR) if they failed to lend to SMEs. Emefiele made the declaration at the 7th Annual Bankers’ Committee Retreat on yesterday in Lagos. The CBN reduced the CRR from 25 per cent to 20 per cent in November.
Emefiele said banks had not played active roles in terms of lending to SME operators in the country. Emefiele said that the country was entering a phase where SMEs must be given priority in the nation’s growth. He said that operators in the banking industry must change, rethink and behave in ways that banks could support the SME sector. The CBN boss said that the economies that withstood the global shocks were SME driven countries.
Emefiele said that CBN would soon unveil a scheme that would assist young graduates to unleash their potential in their chosen fields.
He said that the apex bank planned to come up with a scheme to assist young graduates with loans that would allow them work and pay back. The governor said that the scheme would be different from the existing N220 billion Micro, Small and Medium Enterprises Development Fund launched in 2013. “We need to begin to agitate our minds and consider how we can support the young minds, let’s give them a chance.
“The details of SME programme is going to be separate from the N220 billion.
“I am saying if you the banks refuse to support, your money that we would have released through the CRR, we will take that money and lend it through any channel that will give these young graduates jobs. We all need to think together and agree because there is no need to release the money to you and all you do with the money is buy treasury bills.
“It can’t continue. We need to agitate our minds; we need to think about the best ways to diversify this economy away from oil. We need to get more and more people to be employed and we would need the support of the banks to begin to see how we lower our risk acceptance criteria to give support to our young graduates.”
He said that CBN in few months would unfold plans to create employment opportunities to young graduates by 2016. The Lagos State Gov.Akinwunmi Ambode said that the state would soon complete the legislative process to inaugurate its employment trust fund board of trustees. Ambode said that fund would allow youths and entrepreneurs, particularly in the social enterprise sector, to be supported. Ambode said that state would start the funds with N25 billion in the next three years. He said that the entreprenuers had not accessed up to 20 per cent of the employment trust fund.
“I just want to say you know mine is like an intervention fund of which we believe strongly that the interest that we are going to charge will not be more than three per cent”.
The Minister of Finance, Mrs Kemi Adeosun, said that the country was going through hard moments, but would only to overcome its challenges if there was support to SME sector. Adeosun said that the sector contributed up to 50 per cent to the Gross Domestic Product (GDP).