GTB, Zenith, Access lift CBN Agric scheme with N15.5bln


Guaranty Trust Bank Plc (GTBank), Access Bank Plc and Zenith Bank Plc have contributed N15.5 billion to agricultural businesses as well as Small and Medium Enterprises (SMEs) initiatives introduced by the Central Bank of Nigeria (CBN) this year.

This will grow investible funds which farmers and small medium entrepreneurs could access to enrich and grow their businesses.

Commercial banks operating in Nigeria are to contribute five per cent of their profits to CBN’s Agricultural Businesses Small and Medium Enterprises (AGSMEIS) scheme.

The move by bankers’ committee is to improve on local productions as financial institutions are meant to contribute needed funds to support Federal government and CBN drive to diversify the nation’s economy from oil dependent.

The contributed N15.5 billion by the above Tier-I banks is domiciled with the CBN for investment by qualified players in the Agricultural Businesses and those in SMEs business segment.

The breakdown by INSIDEBUSINESS ONLINE revealed that GTBank contributed the highest of N6.34 billion, followed by Zenith Bank, N5.96 billion and Access Bank, N3.2 billion.

GTBank for the half year audited results ended June 30, 2017 announced 16 per cent increase in profit after tax to N83.7billion as against N71.8billion reported in prior half year results of 2016, the highest in the banking industry in Nigeria.

Also, Zenith Bank’s N75.3 billion profit represents 112.4 per cent increase over N35.5 billion in half year of 2016 while Access Bank’s PAT rose by 17 per cent from N33.6 billion in half year of 2016 to N39.5 billion in half year of  2017.

In 2016, GTBank’s loans exposure to Agriculture dropped to one per cent as against four per cent in 2015 while manufacturing sector continued to dominate GTBank loan exposure, at 18 per cent for the second consecutive year.

Director/Financial Policy and Regulation Department, CBN, Mr. Kelvin Amugo, had in a circular to all banks titled: “Guidelines for the Operations of the AGSMEIS”, asked commercial bank to live up to their commitments at the Bankers’ committee’s meeting of February this year.

He stated, “The Bankers Committee at its 331st meeting held on February 9, 2017 approved the AGSMEIS to support the federal government’s efforts at promoting agricultural business/ Small and Medium Enterprises (SME) as a vehicle for sustainable economic development and employment generation.

“All deposit money banks (DMBs) pursuant thereof, are hereby required to set aside and remit to the designated account domiciled in the CBN, five per cent of their annual profit after tax (PAT) for equity investment in permissible activities as stipulated in the scheme guidelines. Each bank is also required to nominate a representative to the Project Review Committee, which shall have the responsibility for recommending investment of the funds in eligible enterprises.”

According to the guidelines of the scheme, each bank is supposed to transfer the five per cent of its PAT to the CBN and warehoused in an account opened for the scheme, within 10 working days after the annual general meeting of the bank.

He explained further that, “Among other things, the guidelines stated that the objectives of the scheme are to: Ensure access to finance SMEs as these enterprises are the engine of growth of the Nigerian economy; Generate much-needed employment opportunities in Nigerian; Develop agricultural value chain and ensure sustainable agricultural practices; Boost the managerial capacity of Agribusiness/SMEs as pipelines of growth.”

It would be noted that the CBN has in the last one year intervened in the Agric sector especially in rice production with its Anchor Borrowers Scheme (ABS) in line with the federal government’s efforts to grow the sector to make it creator of jobs and foreign exchange earners.

Government efforts are paying off with the export this year of yam tubers to the United Kingdom in a move to deepen the country’s foreign exchange earnings and leave more money in the farmers’ pockets.