- Minister says increasing disenchantment by youths could be costly
James Emejo in Abuja
The Minister of Agriculture and Rural Development, Mr. Audu Ogbeh, has tasked the Bank of Industry (BoI) to “shift focus to young people” and evolve strategies for improving financing to youths who are particularly in agro processing business and small and medium enterprises across the country.
He encouraged the bank to design a system which would allow young people access to good credit so they could “repay and also grow.”
The minister noted that a situation whereby the microfinance banks charge six per cent interest rate on monthly basis, translating to 72 per cent per annum, “can’t work”, if meaning development must be achieved.
Worse still, he said interest rates with commercial banks had remained “almost impossible in this country for 30 years, from 1986 to now.”
Speaking in Abuja during an interactive session Tuesday night with the acting Managing Director, (BoI), Mr. Rasheed Olagunju on ways to boost funding to youths in order to start a business, Ogbeh regretted that it had become extremely difficult for a young person who wants to open a hair dressing or barbing salon to access a startup capital of at least N500,000 to begin the business.
He warned that the degree of frustration and disenchantment among the growing number of youths could get out of hand unless urgent steps are taken to address their idleness.
He said: “Otherwise, the country is moving fast, the degree of frustration and disenchantment is very high and a time is coming when the disconnection will be so total that nobody is gong to listen to the other.”
He said: “We have been running a system in the commercial banking system whereby the doors are almost totally shut against beginners.
“But thank God there’s a bank like you (BoI) with the special mandate because if this economy is going to grow, we have to handwork the younger people into maturity.
“We have to handwork them like we handwork a young child, otherwise, young people simply can’t be part of growth and he the future is theirs.”
Nevertheless, Olagunju assured the minister that the bank was up to the task of addressing his concerns and providing support to the ministry.
He said it would require a memorandum of understanding (MoU) to be signed between the bank and the ministry to strengthen the proposed areas of collaboration.
He noted that the bank has had to adjust its risks assessment criteria particularly when it comes to lending to our youths, stressing that “Today at BOI, we can lend up to N10 million to our youths without relying on the conventional security arrangement.”
The BoI acting MD said: “Over the years we realized that the point of disbursement, the chief risk officer would say look, we cannot disburse base on this condition because this is what the MoU says-and we have to go back and amend the MoU, going forward and backward.
“We’ve leant from experience and that’s why we are here to listen to you today. We aim to achieve the desired impact within the shortest time possible and at the highest efficient rate attainable in this environment.”
He said: “We are conscious that we have lost several years of development in this country and most things we need to achieve is like achieving them yesterday. We are conscious that we need to hit the ground flying not only hit the ground ruining.”