Banks to Pool N25bn Annually to Support Export, Import Substitution

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*CBN may not have foreclosed on use of bitcoin, others

*Implementation of cashless policy to resume countrywide

James Emejo in Abuja

The banking industry has committed to contribute five percent of its profit-after-tax (PAT) towards the support of eligible and bankable export and import substitution projects.

Based on the industry profit and loss account in the past three years, and given average five percent VAT charge for the period, it is estimated that about N25 billion will be realised from their annual contributions.
While the scheme will commence in 2017, it will be bankrolled from banks’ 2016 financials initially.

Addressing journalists in Abuja shortly after the regular meetings of the Bankers’ Committee, Director, Banking Support Department, Central Bank of Nigeria (CBN), Alhaji Ahmed Abdullahi said the new initiative for funding agriculture and small and medium enterprises (SMEs) will boost federal government’s diversification efforts.

He said the fund will be made available to any firm or entrepreneur who aims to boost export drive or promote import substitution like processing of raw materials locally to reduce importation of finished items.

The funding pattern will be based on equity partnership arrangement and not loan and with no interest charge- and will run for a 10-year maximum duration.

Indications also emerged yesterday that the apex bank may not have foreclosed the use of virtual currencies in the run as it is still weighing the benefits and consequences which could result from the eventual adoption.

Speaking on the issue which also formed part of deliberations during the meeting, Managing Director, Guarantee Trust Bank (GTB), Mr. Segun Agbaje said the CBN, like other central banks around the world, is currently considering the potentials of virtual currencies before coming up with a definite resolution.

He said the banking industry was also concerned over the growing menace of ponzi schemes to ensure that people do not continue to fall prey while others get rich quickly.

He said: “We are beginning to look at the impact of bitcoin, digital currencies and trying to understand it better before coming up with regulation either to support it or prevent it.
“So I think we are at the very early stages in Nigeria and the CBN which is the regulator has to study it properly to come out with policy statement and directions.”

CBN acting Director, Corporate Communications, Mr.. Isaac Okoroafor said it was regrettable that some people didn’t heed to warnings from regulatory authorities not to patronise wonder banks given that many persons still got their fingers burnt.

Meanwhile, CBN Head, Shared Services Department, Mr. Chidi Umeano said the committee also resolved to resume the implementation of the cash policy across the country.
Implementation had been suspended in 2014, two years after the initial commencement in six states.

He said having realised that the payment infrastructure had improved nationwide, the committee agreed on a gradual re-introduction beginning with 10 states in May, August and October this year.
He added that measures had been taken to protect vulnerable individuals during the deployment.