Stories by Amaka Ifeakandu
Lagos
Managing Director/Chief Executive of Fidelity Bank, Mr Nnamdi Okonkwo, has commended the Central Bank of Nigeria (CBN), Anchor Borrowers’ Scheme, saying that the project has the capacity to boost the country’s non-oil export earnings. Okonkwo who made this statement while interacting with financial Journalist in Lagos said the apex bank has through its anchor borrower lend money to farmers
According to him, “The CBN has ensured that thousands of rice farmers form the anchor borrowers.
The CBN lends money to the farmers, but you know it is not like in the past when the farmers saw such cash as government money and find it difficult to repay. What the CBN does now is to give them the money in the form of inputs and improved seedlings. And the farmers have formed themselves into co-operatives to make loan repayment easy. And when the produce are harvested, the farmers get immediate buyers for their produce. I believe that over time, Nigerians will feel the impact of the scheme,” he said.
The Fidelity Bank boss also listed lack of right framework as being responsible for local banks not lending long term funds to Small and Medium Scale Enterprises (SMEs).
He lamented on the problem of lack of infrastructure, such as lack of power, roads network, adding that his bank with about 248 branches generate private electricity to power its operations, the level of power that can serve Lagos state as a whole.
He regretted that a lot of banks collapsed in the past because of assets mismatch. “When there is a run in the system, the owners of the short term funds will come for their money and you have to pay them. And if you pay them, the people you gave long-term loans cannot pay up. Then you begin to have distress in the system,” Okonkwo said.
He disclosed that the Nigerian Export Import Bank (NEXIM Bank) and his bank are taking measures to enhance non-oil export and create wealth for Nigerians. He said both banks want exporters to explore opportunities presented by the N500 billion non-oil Export Stimulation Facility as well as the expansion of the export credit Re-discounting and Refinancing Facilities (RRF) to develop the economy, stimulate their operations, and create jobs for the people.
He said Fidelity is always at the forefront of financial services solutions and lending, stressing that supporting SMEs goes beyond funding.
Also speaking, Group Head, Agric Finance, Heritage Bank Limited, Olugbenga Awe said in as much as banks would want to lend to non-oil sectors of the economy, the bank always lookout for customers’ history of previous transaction to ensure that the loans would be repaid.
He said the bank, can also consider the export volume, frequency of export, payment methods and transaction cycle.
He said that banks are also confronted with the problems of inadequate export finance resources, inadequate infrastructure to control products quality and lack of dependable source of local product prices and supplier information among others.
