CBN, Banks Bicker Over Loan To SMEs

By Bayo Bernard

Small and Medium Scale Enterprise, SMEs will now be able to obtain more loans from commercial banks in the country if the Central bank of Nigeria succeeds in its quest to get money banks commit more to the small business sector.

The nation’s apex bank has directed banks to raise their Bank’s Deposit Ratio to 65b per cent in its latest move to encourage the growth of SMEs in the country.

It however remains uncertain if the banks will comply with the recent directive.

Recall that the CBN had increased the LDR to 60 percent and given September 30th for banks to comply.

Many banks have not complied with the initial directive, the magazine learned from competent sources in the CBN.

The apex bank has however ratchet up it plans to make sure that the directive is not flouted according to the sources.

The banks have now been given December 31, 2019 for  full compliance, a directive from the CBN said.

According to the directive obtained by the magazine, CBN expressed reservation on the failure by the banks to meet the initial desdline, srating that it’s now more committed to follow through with it.

“The Central Bank of Nigeria has noted the appreciable growth in the level of the industry growth credit, which increased by N829.4bn or 5.33 per cent from N15.56tn at the end of May 2019 to N16.39tn as at September 26, 2019, following its pronouncement on the above initiative.

“In order to sustain the momentum and in line with the provisions of our earlier letters, the minimum Loan to Deposit Ratio target for all Deposit Money Banks is hereby reviewed upwards from 60 per cent to 65 per cent. “