In a move to towards increasing credit to priority sectors of the
nation’s economy, Zenith Bank Plc, United Bank Plc and three other
commercial banks invested N245.8 billion to Central Bank of Nigeria
(CBN) Real Sector Support Facility (RSSF).
The other three banks are Access Bank, Diamond Bank Plc and Stanbic
IBTC Holdings Plc. The N300 billion RSSF introduced by CBN in January
2016 and was meant to unlock the potential of the real sector to
engender output growth, value added productivity and job creation.
Commercial banks were to contribute five per cent of total naira
deposits and the Facility will be used to support large enterprises for
startups and expansion financing needs of N500 million up to a maximum
of N10 billion.
According EYES OF LAGOS findings, Zenith Bank in 2016 contributed N80.6
billion towards the special intervention reserve held by CBN while
United Bank for Africa contributed N54.7 billion.
Access Bank Plc and Diamond Bank Plc contributed N49.6 billion and
N39.9 billion towards the RSSF in 2016 respectively while Stanbic IBTC
Holdings added N20,8 billion towards the special intervention fund last
year. The CBN said in 2016, the sum of N2.25 billion was released to two
projects under the RSSF, bringing the number of projects to four valued
at N6.85 billion from inception in 2014.
In a circular issued by the director, Development Finance Department
early 2016, the objectives of the Facility include, “Improve access to
finance by the agricultural value chain, manufacturing, mining, solid
minerals activities and other strategic sub-sectors of the Nigerian
economy.
“Increase output, create jobs, diversify the economy, increase
accretion to foreign reserves and provide inputs for the industrial
sector on a sustainable basis.”
According to the circular, Loans granted shall have a maximum tenor
of 10 years depending on the complexity of the project. “Each project
tenor shall be determined in relation to its cash flow and life of the
underlying collateral.
“Working capital facility of one year with a maximum rollover of one
year subject to approval and the Facility allows for moratorium of one
year in the loan repayment schedule,” the circular explained.
Hitherto, the CBN said some banks, which accessed the funds at one
per cent interest rate for lending at nine per cent yearly, are not
doing so. The CBN said it had suspected that some banks are not only
diverting the loans, but also delaying the quarterly repayments
remittance from beneficiaries. According to CBN Governor, Mr. Godwin
Emefiele, the RSSF is expected to support large enterprises for
start-ups and expansion of the financing of up to N10 billion.
