The agricultural and manufacturing sectors can now get loans from commercial banks in Nigeria with a single fixed interest rate of 9 percent. This was part of the agreement reached during the Bankers Committee meeting held in Lagos yesterday.
The Central Bank of Nigeria (CBN) through its Director of Banking Supervision, Ahmed Abdullahi disclosed that the idea is to stimulate job creation and while moderating interest rates downwards. He said the idea is for commercial banks to get refunds through their Cash Reserve Ratio (CRR) for engaging in a new project or an existing one in the agriculture or manufacturing sector as a way of utilising the CRR.
“So anytime a bank lends to manufacturing or agriculture at the rate the CBN has prescribed, it would have its CRR refunded up to the amount it has lent. The guidelines are coming up any moment from now, and once it is out the policy will take off.”
Abdullahi also said banks can apply to provide loans to other job-creating sectors for the apex bank’s consideration.
In addition, the Managing Director of Guaranty Trust Bank Plc (GTBank), Segun Agbaje said the loans are long-term loans of seven years and a two-year moratorium on principal. He also said access to credit on fixed interest rate by manufacturing and agricultural sectors would ease their fear for all kinds of risks.
Prior to this, CBN had approved a N14.9 billion credit facility to the Northeast Commodity Association (NECAS). The National President of NECAS, Alhaji Sadiq Deware said under the programme, 27,000 farmers would benefit while 75,000 hectares of land would be cultivated in the four participating states.
The beneficiaries of the credit facility, according to Deware, are farmers mainly affected by the insurgency in Taraba, Bauchi, Gombe, Adamawa and Yobe states. Borno State was not included as a result of the insecurity in the state.
The credit facility would cover all the commodities that the Northeast have comparative advantage of producing which include rice, maize, millet, sorghum and even small ruminants amongst others.