The Central Bank of Nigeria (CBN) has announced the disbursement of over N130 billion to the Bank of Industries (BOI) for onward release to the small and medium scale enterprises (SMEs) through designated banks to boost the real sector capacity.
CBN Governor, Sanusi Lamido Sanusi, told visiting Vice President, Global Industries, of the International Finance Corporation (IFC), Jyrki Koskelo, that the central bank is already perfecting strategies that would help encourage Nigerian banks to invest in SMEs in the country.
He said the amount is part of the N500 billion allocated by the federal government under the infrastructure development fund meant to assist the real sector of the Nigerian economy. On the whole, Mr Sanusi said a total sum of N200 billion would be disbursed to the SMEs before the end of the year.
Bidding for the banks
Recently, BOI said that it has screened and approved 130 firms to draw from the fund, stating that the CBN would go through the approval and release of the funds. On the 10 troubled banks, Mr Sanusi said discussions are on with investors, adding that bids for prospective core investors of the banks have already been submitted, with July 31, 2010 fixed as deadline for submission of the bids by prospective investors. “These bids would be properly handled by the apex bank as they would go through due diligence at the end of which a preferred as well as a reserved bidder would be declared,” he said.
Mr Sanusi also maintains that CBN is working with the IFC to reduce the strain on the yet to take off Assets Management Company. He restated that no bank has been put out for sale contrary to speculations making the rounds, adding that the 10 affected banks and others are re-strategising to boost their capital base, by either merging or acquiring one or the other for better performance.
While lauding CBN’s reforms, Mr. Koskelo noted that banks in every country needs support from institutions such as the IFC, adding the Corporation would continue to work with the CBN and banks to ensure that the sector maintains a balance on the long run. “Our role is to support what the CBN is doing,” he said. “We are going to engage in other transactions in the Nigerian economy to especially strengthen the banks and have a strong economy in Nigeria.
One important thing is to fix the banks and the CBN is doing that very well, I must admit, we will encourage the banks to invest more in SMEs, power, health, agribusiness and infrastructure.
We are sponsoring risk management, good corporate governance and we will have to encourage the private sector to invest in power because the CBN or government alone cannot do it, there must be a policy in place for that as well.
There is need to grow the capital market so as to boost growth, we would support CBN’s clean up exercise in terms of the reforms and this is a road with several steps.”