Abuja - Nigeria has warned financial institutions for their alleged reluctance to grant loans to agricultural, mineral resources and small and medium enterprises sectors of the economy.
Speaking at the ongoing seventh Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN), a representative of President Goodluck Jonathan said the government might be forced to "sanction" the banks.
Dr Yerima Ngama, Minister of State for Finance, warned that unless they increased their funding to these critical sectors, government might be compelled to reduce their access to public sector deposits.
He bemoaned that the banks were getting money from the government at zero-percent interest rate but continued to deny the productive sector the required financial support.
Describing the oil sector as external to the economy because there was little it was drawing from Nigeria to create wealth, Ngama expressed desire for the banks to jointly do more to lend to agriculture, which he noted remained too low to achieve the Agricultural Transformation Agenda’s (ATA), 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 the Central Bank is that when you lend to farmers they pay back," he said.
He quipped, “So, the poor actually pay their loans, but why are the banks always eager to go and 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. As a nation, we have to look at it as our responsibility.
"We owe 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 be coming with the solution," Ngama said.
- CAJ News