The Central Bank of Nigeria (CBN) has mandated commercial banks, including Access Bank, Zenith, UBA, and others, to take charge of loan recoveries for funds granted under its various intervention schemes. The apex bank also disclosed a suspension of new loan applications under its development finance intervention funds.
The directive was conveyed through a circular addressed to bank Chief Executives and signed by Sa’ad Hamidu, the Acting Director of the Development Finance Department at CBN. The circular underscores the CBN’s decision to withdraw from direct development financing interventions after investing over N1 trillion in various schemes.
Governor Olayemi Cardoso revealed that the CBN had disbursed over N10 trillion under its intervention schemes. Notably, the Anchor Borrowers’ Programme (ABP) witnessed a disbursement of N41.02 billion between September and October 2022, benefiting agricultural projects. The ABP scheme, supporting 4.6 million smallholder farmers growing 21 commodities nationwide, received a total disbursement of N1.07 trillion.
Under the Commercial Credit (CACs), N300 million was disbursed to fund large-scale agricultural projects, with a total payment of N745.31 billion under the scheme. Additionally, the Real Sector Facility saw a disbursement of N48.30 billion to new initiatives in agriculture, manufacturing, and services, totaling N2.15 trillion to 437 projects.
The circular from CBN emphasized a shift in policy focus, aligning with its core mandate of ensuring price and monetary stability. The central bank is transitioning to limited policy advisory roles supporting economic growth. Consequently, new loan applications under existing intervention programs are no longer being accepted.
Banks have been instructed to communicate this change to their customers, emphasizing that interest rates and terms on existing facilities remain unchanged. Banks are now tasked with the responsibility of recovering outstanding balances on previously accessed facilities.
As the CBN recalibrates its approach, the Nigerian financial landscape is likely to witness changes in the dynamics of loan disbursement and recovery, with banks playing a more pivotal role in the process.