Anchor Borrowers Scheme to boost non-oil earnings

Rita Eremiokhale, Lagos.

The Managing Director of Fidelity Bank Plc, Nnamdi Okonkwo

The Anchor Borrowers’ Scheme project unveiled by the Central Bank of Nigeria, CBN has been described as having the capacity to boost non-oil export earnings.

The Managing Director of Fidelity Bank Plc, Nnamdi Okonkwo made the statement at the 2016 Annual Conference organised by Finance Correspondents Association of Nigeria in Lagos.

“The CBN has ensured that thousands of rice farmers form the anchor borrowers. The bank lends money to farmers, but you know it is not like in the past when farmers saw such cash as government money and find it difficult to repay. What the CBN does now is give them the money in the form of inputs and improved seedlings. And the farmers have formed themselves into co-operatives to make loan repayment easy.

”When the produce is harvested, the farmers get immediate buyers for their produce. I believe that over time, Nigerians will feel the impact of the scheme,” he said.

Okonkwo also said that the Nigerian Export Import Bank and Fidelity Bank were taking measures to enhance non-oil export and create wealth for Nigerians.

The Managing Director said both lenders want exporters to explore opportunities presented by the N500 billion non-oil Export Stimulation Facility as well as the expansion of the export credit re-discounting and refinancing facilities to develop the economy, stimulate their operations, and create jobs for the people.

Access to Loans by Farmers
On accessibility of loans, Okonkwo explained that it might be difficult for borrowers to access long term loans because banks deposits were mainly short-term in nature and lending such funds to customers for long-term could lead to asset mismatch.

He said although the lenders would want the economy to grow by lending to farmers and other productive sectors of the economy, they also have to keep an eye on the stability of their institutions.

According to him, ‘‘pension funds, equity and insurance funds where long-term funds should come from have not been forth coming with such cash.”