CBN ‘may reduce’ CRR for SME-friendly banks
Godwin Emefiele, governor of the Central Bank of Nigeria, says the cash reserve ratio (CRR) of banks who lend a certain portion of funds to small and medium scale enterprises (SMEs) may be reduced.
Emefiele made this known on Sunday while addressing journalists at the end of the ninth Banker’s Committee retreat in Lagos.
The CRR is used to determine the minimum deposit commercial banks must hold in reserves with the CBN rather than lend out. It influences funds available at bank’s disposal to create loans.
At its last meeting in November, the monetary policy committee of the CBN agreed to hold CRR at 22.5 percent.
Emefiele said the Bankers’ Committee has agreed to relax conditions for accessing the Agri-business, SME Investment Scheme Fund (AGSMEIS).
He said the interest rate will not be more than five percent and tenor of the fund should be at a minimum of seven years so that those who access the fund would have ample time to repay.
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