CBN justifies investment in real sector
The Central Bank of Nigeria has given reasons for its several interventions in the real sector of the economy, saying ‘Central banking’s responsibilities, now transcends the orthodox responsibilities of monetary activities to developmental activities.’
Defending the over N1.3trillion lending facilities to sectors such agriculture, micro, small and medium enterprises, and infrastructure, CBN Deputy Governor, Corporate Services, Mr. Adebayo Adelabu, said the interventions would help stimulate the economy.
Adelabu, who represented the CBN Governor, Mr. Godwin Emefiele, at a seminar for Finance Correspondents and Business Editors, said the CBN hopes to create more opportunities for the realization of the potentials of the real sectors of the economy, so as to encourage job creation, increased GDP, export, and by extension, boost the nation’s foreign reserve.
His said, “At the CBN, our approach to real sector development is three-pronged. Our interventions centre around agriculture, micro, small and medium enterprises, MSMEs and infrastructure interventions.
“The interventions included the N300 billion Real Sector Support Facility, RSSF, the N220 billion Micro, Small and Medium Enterprises Development Fund, MSMEDF, the N213 billion Nigeria Electricity Market Stabilisation Fund, N500 billion Non-Oil Export Stimulation Facility; and the N75 billion Nigeria Incentive Based Risk Sharing for Agricultural Lending, NIRSAL.”
He said the principle behind the various interventions were to provide operators in the real sector single-interests loans of between 6-9 percent at longer tenors, with alternative collaterals, which were the major hindrances to deposit money banks’ lending to the sectors.
“The major complaints of the real sector operators were categorized into three: double –digit interest rates; shortness of the tenors of the loans from the deposit money banks; and non-availability of collaterals.
Emefiele therefore appealed to Nigerians to patronise locally made products to encourage the manufacturers to remain in business.
Speaking on the level of fraud in the banking sector, the CBN director, Banking and Payment System, ‘Dipo Fatokun, said the value of actual loss to fraud has declined substantially, despite the 11.6 percent increase in the electronic transactions.
Fatokun disclosed that electronic transaction rose to N48.93 trillion as at December 2015, up from N43.85 trillion in 2014, indicating an increase of 11.6 percent, even as volume rose by 43.4 percent to 162.59 million from 113.42 million in 2014.
He said though the volume of attempted fraud rose by 6.35 percent in 2015, the attempted value and actual loss dropped by 43.6 and 63.7 percents respectively. The value of attempted fraud in 2015 dropped to N4.37 billion compared to the 2014 value of N7.75 billion, while the value of actual loss to fraud likewise dropped to N2.25 billion in 2015 as against the N6.21 billion lost to fraud in 2014.
The CBN attributed the decline in fraud to the successful implementation of the Bank Verification Number, the two way authentication factor, as well as the beefed up security features on the electronic payment channels.