The Bankers’ Committee of the Central Bank of Nigeria on Thursday agreed to set aside five per cent of the profit after tax of the banking sector to finance the agricultural sector as well as non-oil exports.

The committee, at its meeting held at the headquarters of the CBN in Abuja, said that based on the balance sheet size of the banking sector for the 2016 financial year, about N25bn was expected to be pooled into the fund annually.

The Director, Banking Supervision Department, CBN, Mr. Ahmed Abdulahi, who addressed journalists shortly after the meeting, said that the decision to set aside the fund was to support the agricultural sector and import substitution policy of the Federal Government.

Abdulahi was joined at the briefing by the Managing Director, First Security Discount House, Mr. Hamda Amban; Managing Director, Guaranty Trust Bank Plc, Mr. Segun Agbaje; Director, Shared Services, CBN, Mr. Chidi Umeano; and Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okoroafor.

Apart from the new funding initiative for the agricultural sector, others issues discussed at the meeting, according to Abdulahi, are the reactivation of the cashless policy as well as its extension to the remaining 30 states, Ponzi schemes and the emerging threat of virtual currencies.

Providing more insight into the new funding mechanism for the agricultural sector, Abdulahi said the fund would be used to finance eligible bankable projects meant to support the export drive of all import substitution products.

He explained that the move was borne out of the conviction that the agricultural sector as well as the promotion of non-oil exports held the key to the diversification of the economy.

He said the money would not be given out to businesses in the sectors as loans, but would be provided by banks as equity contribution to such companies.

This, he noted, would allow the banks to have equity stake in such businesses for a maximum of 10 years, adding that rather than charging interest, the banks would be entitled to dividend during the period of their investments.

Umeano, who spoke on the cashless policy, said it would help drive financial inclusion, the Sustainable Development Goals of the country and improve security in bank transactions.

He said the committee’s plan was to have a gradual reintroduction of the scheme to the 30 states starting from May this year

The cashless policy, since it was introduced in 2012, according to him, has been implemented in six states.

Banks Set Aside 5% of Profit for Agriculture, Exports