The Central Bank of Nigeria (CBN) has issued a directive to all deposit money banks to fulfil remittances of five per cent profit after tax (PAT) for investment in the Agricultural/Small and Medium Enterprises equity Investment Scheme.
This development was made known via a circular issued to all banks by the Director/Financial Policy and Regulation Department, CBN, Kelvin Amugo, on “Guidelines for the Operations of the Agricultural/Small and Medium Enterprises Investment Scheme (AGSMEIS)”.
“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”, the statement read.
He stated that the decision was reached at The 331st Bankers Committee meeting held on February 9, 2017 and that the Agri-Business/Small and Medium Investment Scheme (AGSMEIS) is to support the federal government’s efforts at promoting agricultural business/Small and Medium Enterprises (SME) which is regarded as a vehicle for sustainable economic development and employment generation.
The guidelines of the scheme categorically stated that each bank will transfer the five per cent of its PAT to a dedicated account, opened for the scheme with the CBN within 10 working days after the annual general meeting of the bank.
The guidelines further stated that the scheme will ensure adequate access for the financing of Small and Medium Enterprises (SMEs), to generate the much-needed employment opportunities in Nigeria, develop agricultural value chain and ensure sustainable agricultural practices, amongst others.
Accordingly, the guideline revealed that the amount to be invested by any enterprise shall not exceed a maximum of N2 billion; which, Investment in excess of the maximum amount shall be subject to the approval of the CBN.
“The scheme shall be operated for a period of 10 years in the first instance and be reviewed after five years of its operations”, the statement added.
By Akin Obakeye
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