Bankers both operators and regulators as well as policy makers in the country converged in Lagos for a two-day brainstorming session at the 7th Bankers Committee Retreat on charting a new course for the Nigerian economy in 2016.
The meeting of all the chief executives of the deposit money banks and development financial institutions also had the presence of the governor of the Central Bank of Nigeria (CBN), the ministers of finance, agriculture and rural development, power, works and housing, transportation and solid minerals, Kemi Adeosun, Chief Audu Ogbe, Babatunde Fashola, Rotimi Amechi, and Kayode Fayemi.
The focus was on how to channel resources both financial and infrastructure towards the micro small and medium enterprises in making it a veritable tool for the growth of the economy of the country.
With continuously dwindling revenue arising from the crash in the international price of oil, the country is facing hard times which it could only come out of if it diversifies away from oil to raise revenue from other sources.
According to the CBN governor, Godwin Emefiele, the country needs to create an economy that is shielded away from international shocks, and the best way to do it is to help the MSMEs in the country grow.
Emefiele speaking at the end of the retreat on Friday night noted that Germany has been able to insulate itself from international shocks to an extent because of the impact of MSMEs in its economy.
According to him, SMEs represent 99.95 companies in Germany employing up to 68 per cent of its workforce and contributing over 37 per cent of the corporate turnover of the European country’s corporate turnover.
“Can we answer the same question about ourselves as a country today? Does Nigeria’s SMEs represent close to 99 per cent of the companies in Nigeria today? Does Nigeria’s SMEs employ 68 per cent of the labour force in Nigeria today. Indeed what is the per cent age of the turnover of the SMEs in Nigeria today as a per cent age of total corporate turnover in Nigeria.
“If we are to grow the economy, we need to learn from some of the examples of economies like Germany. We have a N220 billion MSME Development Fund which is meant for the SMEs we have used various means and various approaches to see how to stimulate the lending to the SMEs, I must confess that we have not made that much progress because less than half of this fund is disbursed today.”
To solve this in the coming year, Emefiele, who read the communique of the retreat said the banking industry has agreed on how to increase support for SMEs, particularly in the agriculture and manufacturing sectors.
He explained that bankers had agreed to support SMEs in agricultural value chain and stimulate increased lending to them to reduce the country’s dependence on imports and ultimately take pressure off the external reserves and the currency.
Part of the things to be done which the bank CEOs agreed to is derisking the sector, and this they hope to achieve by building capacity for these sectors by imparting on them business building skills, managerial skills and simple bookkeeping skills that will make them more appealing to the bankers.
The general consensus among the bankers was also that there was the need for improved infrastructure such as roads to link the farm to the market, silos to make sure that products are well preserved before they are taken out of the farm as well as power.
To is end, the CBN governor said the bankers had set a target to boost agricultural lending by N300 billion in 2016. Asides this, he said “the CBN is contemplating a programme that will support SMEs, particularly lending money at concessionary prices to our young graduates.
“We have so many young graduates who come out of school and don’t have jobs. We are lucky that we have jobs in banks with ties and skirts but there are some people who are unemployed and they need to be employed. If they remain unemployed, then you know what happens one day to you that is employed. It is not just about growing the economy but we need to get more people to be employed.”
This programme he said is aimed at creating at least one million jobs for young unemployed undergraduates in 2016. The details of SME programme he said would be separate from the N220 billion as he added that if the banks refused to support SMEs in employing young undergraduates “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 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 sort of our risk acceptance criteria to give support to our young graduates. In the course of the next few weeks we will be unfolding a plan of support of the CBN to create employment for at least one million young graduates in Nigeria in 2016.
“That will entail support from Nigerian banks, it will entail support from our development institutions to see how we can channel these our concessionary loans to companies that are MSMEs.”
Source:Leadership.ng
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