CBN to stop banks’ CRR funds over failure to support SMEs


For falling to give credits to to lift small businesses and support the economy more, Godwin Emefiele, the Governor of CBN, has threatened to stop funds due to banks on the reduction of the Cash Reserve Ratio (CRR).

SMEs currently contribute up to 50 per cent to the Gross Domestic Product (GDP) and support to them will make them do better.

With the bankers’ failure, a scheme is in the works at the apex bank to assist young graduates unleash their potential in their chosen fields. The scheme, different from the SMEs development fund launched in 2013, will assist young graduates with loans that would allow them work and pay back.

The CBN had in November reduced the CRR from 25 per cent to 20 per cent to create a large pool to support the growing SMEs sector.

Emefiele at the 7th Annual Bankers’ Committee Retreat said banks had not played active roles in terms of lending to SME operators at a time the country needed the SMEs to give a lift to the economy.

Warning the banking industry to change, rethink and behave in ways to support the SME sector, the CBN boss noted that only the economies that support the SMEs had been able to survive the global shocks.

“We need to begin to agitate our minds and consider how we can support the young minds, let’s give them a chance.

“The details of SME programme is going to be separate from the N220 billion.

“I am saying if you the banks refuse to support, 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 all need to think together and agree because there is no need to release the money to you and all you do with the money is buy treasury bills.

“It can’t continue. We need to agitate our minds; we need to think about the best ways to diversify this economy away from oil.

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 our risk acceptance criteria to give support to our young graduates.”

He said that CBN in few months would unfold plans to create employment opportunities to young graduates by 2016.

Governor Akinwumi Ambode of Lagos said that the state would soon complete the legislative process to inaugurate its employment trust fund board of trustees.

Ambode said that fund would allow youths and entrepreneurs, particularly in the social enterprise sector, to be supported.

Ambode said that state would start the funds with N25 billion in the next three years.

He said that the entreprenuers had not accessed up to 20 per cent of the employment trust fund.

“I just want to say you know mine is like an intervention fund of which we believe strongly that the interest that we are going to charge will not be more than three per cent”.

Comments are closed.