Banks target N56b equity contribution in 2018

• Slash interest rate to five per cent
The deposit money banks have ended the 2017 Bankers’ Committee retreat with a resolve to grow their equity contribution pool to the agriculture enterprise initiatives to more than N56 billion in 2018 from the N26.4 billion recorded this year.

But in another radical resolution, the bankers agreed to reduce to five percent the nine percent interest rate earlier fixed for the borrowers of the funds, as well as incorporate road side businesses into the beneficiary list.

The banks had in December 2016 edition of the retreat, agreed to set aside five per cent of their respective profit after tax for a collective pool, which would serve as their own contribution in making available cheap funds for the acclaimed risky segment of the economy.

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, while unveiling the communique of the retreat in Lagos yesterday said the bankers admitted that it was failure on their part to have pooled N26.4 billion together without giving a dime out, although some targeted borrowers were not forthcoming.

According to him, about 50 per cent of the funds is now reserved for people who want to go into hair cutting and hair dressing businesses as well as others who want to acquire rice harvesting machine and implement for agriculture that are cheap.
Emefiele said the disbursement of the funds would start January 1, 2018.

“These machines can be procured at very low prices not more than N250 to N500,000 and people can earn a living with that. In fact, we are going to bring in those interested in tiling, train them and buy them equipment for the tiling.

“We feel these are the weak and vulnerable people that need assistance that may not even have the opportunity of working at the bank and that will need to open a channel through which they can bank and access facilities from the bank.

“At the time, they are being giving the equipment. They will sign an agreement, like a loan agreement, that specifies the amount and of course specify the pricing at not more than five percent for a seven-year period, with pay back period starting after six months or nine months or one year. They may be paying not more than N5000 monthly,” he said.