A former president, Chartered Institute Bankers of Nigeria (CIBN), Prof. Olusegun Ajibola, has lauded the CBN for establishing the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) for Small and Medium Enterprises (SMEs).
The ex-CIBN chief gave the commendation in an interview with the News Agency of Nigeria (NAN) on Friday in Lagos.
Ajibola said the five per cent interest rate to the entrepreneurs would eradicate the dearth of working capital that had retarded the growth of the SMEs.
NAN reports that CBN said the loan would be issued at five per cent and with no collateral to SMEs through the NIRSAL Micro Finance Bank (MFB).
The CBN Governor, Mr Godwin Emefiele, said this at the tour of NIRSAL MFB in Gwagwalada, a satellite town in Abuja on Wednesday.
He said the loan would be issued under the Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS), an initiative of the Banker’s Committee.
Emefiele said the loan would run for tenure of seven years with two years moratorium.
The NIRSAL MFB was incorporated as a Private Limited Company in 2018 with license from the CBN and unveiled in February, 2019 as National Micro Finance Bank with planned branches in the country’s 774 Local Government Areas.
“The new financial institution is a product of a tripartite partnership among the Bankers’ Committee, NIRSAL and Nigerian Postal Service (NIPOST).
“The Bankers’ Committee provided the set-up equity capital and owns 50 per cent of the bank, while NIRSAL and NIPOST own 40 per cent and 10 per cent, respectively.”
Ajibola said extending such a loan to SMEs would trigger positive reactions especially the creation of more jobs in the economy.
He said the companies would contribute significantly to Gross Domestic Product (GDP), food security and promote proper flow of money across the economy.
He added that with the establishment of NISRAL MFB, there would be significant growth in the manufacturing sector and the agricultural sector because of the flow of cheap credits to farmers. (NAN)