Banks to loan manufacturing, agric sectors at 9% interest

Banks to loan manufacturing, agric sectors at 9% interest

The Central Bank of Nigeria (CBN) on Thursday said it will support lenders to enable them to give loans to players in the manufacturing and agricultural sectors at a single digit interest rate.

The Director, Banking Supervision at CBN, Ahmed Abdullahi, told journalists after the CBN Bankers’ Committee meeting, that the loans will only be available for job creation and expansion plans.

Abdullahi said the idea is to have job-creating activities in the economy and also to bring interest rates down within the economy.

He said, “Although agriculture and manufacturing are the initial sectors that are being considered, a bank can apply if there is a job-creating sector that the bank is operating in, it may be considered. The whole idea is: bring down interest rates, create jobs.

“For Cash Reserve Ratio (CRR) refund, that is part of the idea. At the moment, banks funds are held under CRR and they are not being used.

“The idea came up that we can refund the CRR to a bank that has engaged in lending for a new project or for the expansion of an existing one in the agricultural or manufacturing sector as a way of utilizing the CRR.

“Anytime a bank lends to manufacturing or agricultural business at a rate that the CBN has prescribed, it will have its CRR refunded to it, up to the amount that it has lent.”