Credit to domestic economy stands at N14trn, says CBN gov

The Central Bank of Nigeria (CBN), yesterday, said that the  total credit granted to the nation’s economy as of June 30, 2015 stood at  N14.7 trillion out of which N760.8 billion representing 5 per cent  was contributed by Development Financial Institutions (DFIs) in the country.

CBN Governor, Mr. Godwin Emefiele, who spoke while presenting a keynote address at the maiden edition of the bi-annual forum for stakeholders of DFIs, gave the sub-optimal performance of the DFIs in the area of granting credit facilities to real sector, told DFIs’ chieftains  to adopt a paradigm shift in their funding model for the institution to make more meaningful economic impact on the nation.

He also announced  that  the quest to acquire final licence for the take-off of Development Bank of Nigeria had reached  advanced stage following its collaboration with other development partners.

According to him, the  Development Bank of Nigeria would provide credit facility at tolerable interest rate for the financing of infrastructure projects, agriculture and Small and Medium Enterprises development through the retail DFIs and other participating financial institutions. Emefiele who was represented by the Deputy Governor (Financial System Stability), Dr. Okwu Joseph Nnanna,  said that given the limitation in the resources available at the disposal of DFIs, government was considering  how to make it possible for DFIs to access capital market for fund to finance critical sectors of the economy.

“The Nigerian experience has shown that government resources have been the main source of long term fund for these institutions, which is not sustainable. It is, therefore, envisaged that with time, the DFIs would be capable of accessing the capital market for funds to finance the critical sectors of the economy.  Thus, to be successful in the long term as catalysts and agents of sustainable economic change, DFIs must operate under a different philosophy that is underpinned by commercial orientation to guarantee their financial viability,” the  governor said, while challenging the DFI chief executives to think outside the box and leverage on international best practices and experiences of other countries such as Brazil and India, which, he said, offered useful lessons.

Also as part of efforts to deepen the Islamic Financial Services standards with the hosting of the fourth  technical workshop on the implementation of Islamic Financial Services Board (IFSB) standards in Nigeria, CBN yesterday declared open a workshop to dialogue with IFSB team from Malaysia and exchange ideas, experience and perspectives on developments in the area of Islamic finance and particularly how to implement IFSB standards in Nigeria.

IFSB, like the Basel Committee, is an international standard-setting organisation that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and building principles for the industry, comprising banking, capital markets and insurance sectors.