Banking Industry, Organized Private Sector brainstorm on policies to improve relationship, economy at ACAMB’s 1st National Stakeholders Conference

Important players in the Banking Industry and Organized Private Sector (OPS) on Wednesday (yesterday) August 3 met at the 1st National Stakeholders Conference organized by the Association of Corporate Affairs Managers of Banks (ACAMB) to iron out grey areas of conflict between the bodies for a more robust economy.

The conference with the theme ‘Promoting a synergy between the banking industry and Organized Private Sector’ which held at the Chartered Institute of Bankers of Nigeria (CIBN) Building on Victoria Island, Lagos had interesting panel discussions where underlying issues that had hitherto thrown both important sectors miles apart meticulously expressed and addressed.

Speaking on the importance of the conference, President of the association, Rasheed Bolarinwa in his welcome address said: “To the extent that financial intermediaries are crucial to economic growth, there is bound to be a meeting point between OPS and the banking sector.

“From available communication research efforts, there seems to be a mutual misunderstanding between the two sectors, and all efforts to streamline this perceived gap have not been totally successful.

“The banking sector and the OPS are meant to be the main drivers of the Nation’s economy. One galvanises the credit from the surplus side and redistributing to the deficit size. The other operates principally from the productive side, creating wealth and values. Thus, the two sectors are like two sides of a coin. They are co-joined, and must function together in an economic sense. So, there is nexus; a link between the two at all time if any economy is to develop and grow.”

CBN, Banks should operate less bureaucratic system – OPS

Meanwhile, members of the Organized Private Sector (OPS) took turns to express their challenges with the banking industry at the conference.

Most prominent on their list was the alleged bureaucracy in accessing funds for their businesses from both the Central Bank of Nigeria (CBN) and Deposit Money Banks (DMBs).

During a plenary session moderated by foremost economist/consultant, Dr. ‘Biodun Adedipe which featured panelists like; Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Small-Scale Industrialists (NASSI), Nigerian Association of Small and Medium Enterprises (NASME), Lagos Chamber of Commerce and Industry (LCCl) amongst others, the OPS members accused banks of placing unrealistic demands on loan packages for business owners.

“Banks must understand that businesses have types and each type has its peculiarity and time of maturity for profit. However, banks tender to apply same criteria for businesses approaching them for loan. I am in the agro business lane and agriculture is not fast food business. It takes time to grow before you can start thinking of profit. The banks also need to introduce a sort of ‘PATIENCE CAPITAL’ package for people in these kind of businesses so that they can allow for more time for the businesses to grow before asking for a payback of the loans,” the Chairperson, Agriculture & Agro Allied Group of the LCCI, Mrs. Ediobong Akpabio posited.

CBN urges OPS to explore its intervention schemes 

While most of the OPS players present at the conference identified several disturbing bureaucratic bottlenecks to access funds from both the lender of last resort, the Central Bank of Nigeria (CBN) and Deposit Money Banks (DMBs), however, the apex bank maintained that its intervention schemes were not fully explored.

It also tasked the OPS members to always ensure that they repatriate foreign exchange (FX) proceeds back to it in order to ease FX pressure in the country.

The Deputy Director, Banking Services of the CBN, Mr. Egboagwu Ezulu disclosed this at the conference.

According to him, the various intervention schemes of the CBN can be accessed through Bank of Industry (BoI), Development Bank of Nigeria (DBN) and the commercial banks.

He said: “We are taking FX out of this country and dumping offshore; when we were told to bring them back. If Nigerians are bringing back FX, we would not be talking about challenges of FX. There is a challenge for individuals and businesses to do the right thing.

“That is why the CBN introduced the RT200 to encourage you to bring back the dollar you are saying is scarce, but in the books of the banks we see billions of dollars that have been exported out of the country and the OPS are not bringing it back, so how do we finance FX demand?”

On how OPS could get funding for output, he said: “When you talk about financing small businesses, the CBN has done a lot of funding to the sector alluding to trillions of naira and has established two entities for this purpose. Has the manufacturing sector approached the entities for the funds available rather than emphasising on the commercial banks?

“The manufacturing sector should put pressure on the Bank of Industry and Development Bank of Nigeria to source funds, and when we see a lot of pressure from those two entities, the CBN instead of going through commercial banks would push those funds to those two entities rather than going to the commercial banks who would give double-digit loans.

“I want to appeal that industrialists, as well as small businesses should approach those two entities to get funding,” he said.

On his part, the President of the Nigerian Chambers of Commerce, Ide Udeagbala said: “The organised private sector breeds a vibrant economy for sustained, inclusive economic growth and development. Therefore, there is need for the banking sector to further enhance investments by identifying and funding good business opportunities and facilitating the exchange of goods and services as a means of contributing to the growth of the private sector. For this role, you will find a worthy partner in the organized private sector.”

The National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), John Udeagbala and President, Manufacturers Association of Nigeria (MAN), Mansur Ahmed were ably represented at the conference.