It would appear that President Goodluck Jonathan considers banks as being stumbling blocks to his determination to diversify the Nigerian economy and thus position it as one of the 20 largest in the world by 2020. There has been widespread criticism of banks over the years over their lackadaisical attitude towards financing agriculture, solid minerals and the small and medium enterprises. Since he came to office, Jonathan has initiated a number of policies aimed at catapulting these sectors into a position that will rival oil and gas. But his patience is running out.

In an address he sent to the opening of 7th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, Jonathan threatened to withdraw public sector deposits from their vaults unless they had a change of heart and begin to immediately lend to the agriculture, solid minerals and SMEs.

But for the Central Bank of Nigeria (CBN) that has over the years initiated such intervention schemes like the Commercial Agricultural Credit Scheme (CACS) Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and others before them, the agricultural sector would have been totally lacking in the funding support it needs to grow and play its role in national development.

Represented by the Minister of State for Finance Yerima Ngama, Jonathan lamented that banks were getting money from government at zero interest rate but continued to deny the productive sector the required funding support.

He charged the banks to do away with their stereotypes and begin lending to agric since “statistics we have coming from the Central Bank is that when you lend to farmers they pay you. I think we have First Bank’s experience where the percentage of the nonperforming agric loans to performing is less than 1.5 per cent. So, the poor actually pay their loans, but why are the banks always eager to go and lend to the riskier businesses than this safe agricultural businesses? “The issue is with our psyche, we think that maybe they are not high tech or maybe there is too much documentation based on a loan of N50,000 or N100,000. Banks have to come together and see how they can put funds together to really support the farmers.”