FG yesterday threatened to withdraw funds over poor agric lending

FROM ISAAC ANUMIHE, Abuja
Federal Government yesterday threatened to reduce commercial banks’ access to public sector deposits if their poor lending to agriculture and mineral resources sectors of the economy was not improved.
Issuing the threat at the opening of the 7th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, President Goodluck Jonathan also said the banks were not doing enough to support the real sector despite several policies and measures that had been put in place to create enabling environment for them to thrive over the years.
According to him, for the Central Bank of Nigeria’s (CBN’s) intervention through financial intermediation support such as the Commercial Agricultural Credit Scheme (CACS) and Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) the agricultural sector would have totally lost the funding support it needs to grow and play its roles in national development.
The president who spoke through the Minister of State for Finance, Dr. Lawan Yerima Ngama, also noted that the banks get money from the government at zero interest rate but continue to deny the productive sectors the required funding support.
He warned that if the banks fail to play their roles, the government might withdraw all its deposits in the banks and put substantial part of the fund to support productive sectors, while describing the oil sector as external to the economy because there is little it is drawing from Nigeria to create wealth.
Jonathan said he would particularly want banks to do more in agricultural lending, which has remained too low to achieve the Agricultural Transformation Agenda’s (ATA’s) goals of making Nigeria a net exporter of food and catalyst for job creation in the economy.
“The banks have to come together and see how they can put funds together to really support the farmers. The statistics we have coming from central bank is that when you lend to farmers they pay you. I think we have First Bank’s experience where the percentage of the non-performing agric loans to performing is less than 1.5 per cent. So, the poor actually pay their loans but why are the banks always eager to lend to the riskier businesses than this safe agricultural businesses?
The issue is with our psyche. We think that maybe they are not high tech or maybe there is too much documentation based on a loan of N50,000 or N100,000. But as a nation, you have to look at it as your responsibility. We own this nation, we have to rise to that challenge and see that the banking sector should come together with a solution and no longer wait for the central bank to come with the solution. But if we want to believe that the banking sector is not innovative, is not ready to come with solution and they are always looking for government and they are always looking for the central bank to do the magic, I am saying that time is running out and people are not patient,” Jonathan, further warned.
Earlier, the President of the CIBN, Mr. Segun Aina, re-assured the government of the institute’s readiness to partner government in its various initiatives aimed at deepening banking knowledge and improving delivery of top class financial services to the economy.