ASSETS & FINANCIALS

CBN directs banks to remit 5% of PAT into Agro/SME investment scheme

CBN directs banks to remit 5% of PAT into Agro/SME investment scheme
Central Bank Of Nigeria building

The Central Bank of Nigeria (CBN) has directed banks to remit five per cent of their profit after tax (PAT) for investment in the Agricultural/Small and Medium Enterprises Investment Scheme.

Director/Financial Policy and Regulation Department, CBN, Mr. Kelvin Amugo, gave this directive in a circular issued to all banks titled: “Guidelines for the Operations of the Agricultural/ Small and Medium Enterprises Investment Scheme (AGSMEIS)”.

He stated: The Bankers Committee at its 331st meeting held on February 9, 2017 approved the Agri-Business/Small and Medium Investment Scheme (AGSMEIS) to support the federal government’s efforts at promoting agricultural business/ Small and Medium Enterprises (SME) as a vehicle for sustainable economic development and employment generation.

“All deposit money banks (DMBs) pursuant thereof, are hereby required to set aside and remit to the designated account domiciled in the CBN, five per cent of their annual profit after tax (PAT) for equity investment in permissible activities as stipulated in the scheme guidelines. Each bank is also required to nominate a representative to the Project Review Committee, which shall have the responsibility for recommending investment of the funds in eligible enterprises.”

According to the guidelines of the scheme, each bank is supposed to transfer the five per cent of its PAT to the CBN and warehoused in an account opened for the scheme, within 10 working days after the annual general meeting of the bank.

Among other things, the guidelines stated that the objectives of the scheme are to: Ensure access to finance Small and Medium Enterprises (SMEs) as these enterprises are the engine of growth of the Nigerian economy; Generate much-needed employment opportunities in Nigerian; Develop agricultural value chain and ensure sustainable agricultural practices; Boost the managerial capacity of Agribusiness/SMEs as pipelines of growth.

“The amount investable in any enterprise shall be limited to a maximum  of N2 billion. Investment in excess of the maximum allowable amount shall be subject to the approval of the CBN. Investment under the scheme which could be for start-ups, expansion of established companies or reviving of ailing companies, shall be through equity in the form of fresh injection of capital.

“Investment shall be made for a maximum period of 10 years. There shall be a lock-up period before exit in order to encourage value creation and boost managerial capacity of the SMEs unless there is material adverse event. The scheme shall be operated for a period of 10 years in the first instance and be reviewed after five years of its operations.”

mms plus

Copyright MMS Plus. All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from Kings Communications Limited.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
× Get News Alert