Banks Sabotage N800bn CBN Intervention Funds

Godwin Emefiele, CBN Governor

The federal government has set aside almost N1 trillion as intervention funds as a way of growing the nation’s economy, for businesses across all sectors of the economy.
However, the Central Bank of Nigeria (CBN), has accused commercial banks of sabotaging the objectives of the respective intervention funds by not allowing their customers access to the funds.
Although the apex bank had set up several intervention funds for small businesses, particularly in the agricultural sector, asides the intervention funds for the power, aviation and movie industries, operators in these sectors have continued to complain that they cannot access these funds.
The affected intervention funds include the Agricultural Credit Guarantee Scheme Fund (ACGSF); Commercial Agriculture Credit Scheme (CACS) Real Sector Support Facility (RSSF); Small and Medium Enterprises Credit Guarantee Scheme (SMECGS); Power and Aviation Intervention Fund (PAIF); Micro, Small and Medium Enterprises Development Fund (MSMEDF); Nigeria Electricity Market Stabilisation Facility (NEMSF); and the Anchor Borrowers Programme (APB).
The CBN had, in June this year, disbursed the fourth batch of the Nigeria Electricity Market Stabilisation Fund (CBN-NEMSF), giving out N55.456 billion (out of the N213 billion set aside for it) to 24 industry participants: three electricity Distribution Companies (DISCOs), 14 electricity Generation Companies (GENCOs)- NIPP inclusive, one service provider, and six gas companies to further address the challenges of in the power sector.
Another of such intervention funds is the N200 billion SME Restructuring and Refinancing Facility (RRF), which was established to re-finance and restructure banks’ existing loan portfolios to manufacturers at 7.0 percent interest rate per annum. There is also the N300 billion Power and Airlines Intervention Fund (PAIF) which was to be administered at 7.0 per cent interest rate per annum.
The deputy director of CBN, Monetary Policy, Dr Ngozi Egbuna, said only a handful of commercial banks in Nigeria had been instrumental in disbursing the intervention funds
Specifically, she said First Bank, Union Bank, Heritage Bank and a few others have been the ones disbursing the intervention funds dutifully.
She noted that banks are not encouraging their customers to access the intervention funds for selfish gains as they would rather give out high-interest loans than the low-interest intervention funds.
The CBN-YIEDP fund which was launched last year is a N3 billion fund with a three-year tenor at nine per cent interest rate, set aside by the CBN for serving National Youth Service Corps (NYSC) members and ex-NYSC members who concluded their service year by 2010, with an individual beneficiary entitled to a maximum of N3 million.

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