House of Reps to revitalise Bank of Industry, others --- Dogara

*Yakubu Dogara

(Nigeria) Concerned about the dwindling efficiency of development financial institutions in the country such as Bank of Industry and Bank of Agriculture, the House of Representatives has began processes to revitalise them to serve as catalyst for development of Micro, Small and Medium Enterprises, MSME and Agro based businesses.

Disclosing this when he delivered a speech at a public hearing organised by the House of Representatives Ad-hoc Committee on investigation of activities of federally owned development finance banks, DFIs,  speaker of the House of Representatives, Mr Yakubu Dogara, added that the House of Representatives had resolved to use its legislative power to reposition the DFIs to live up to their responsibilities of assisting  development of middle-level manpower, and to ensure that the MSME’s have access to cheaper and long term funds which hitherto could not be accessed through Commercial banks. 

He said this became imperative because the DFIs, which are in vantage position to stimulate  the economy and trigger wealth creation at this time that Nigeria is dealing with a recession, have become weighed down by several challenges that have made them unable to deliver on their mandates.

He noted that " Development Finance Institutions are established to serve as catalyst for development of MSME and Agro based businesses. In most developing countries, the Development Finance Institutions have been the spring-board on which such countries became economy giants."

 Some of the Federal Government owned DFIs include the Bank of Industry (BOI) Limited, the Bank of Agriculture, the Federal Mortgage Bank of Nigeria, FMBN, Limited, the Nigerian Export-Import Bank, NEXIM, Limited, the Infrastructure Bank and the National Economic Reconstruction Fund, NERFUND, credit delivery Scheme.  

The speaker noted that these federally owned FDIs were set up to assist the development of middle-level manpower, and to ensure that the MSME’s have access to cheaper and long term funds which hitherto could not be accessed through Commercial banks and are very important in an economy because of their favourable lending conditions such as low interest rate charges, long term repayment period, minimal collateral requirements, and diversified product offered to MSMEs.

"There is no doubt that these institutions if adequately harnessed are enough to propel this country into appreciable level of technological and economic advancement," he noted, while commending President Muhammadu Buhar for pledging the recapitalisation of Bank of Industry and Bank of Agriculture with N15 Billion Naira in his 2017 Budget presentation.

He expressed regret that despite the huge resources committed into these Institutions, their impact are yet to be felt by the majority of our people, "this is because the financial conditions of many development banks have deteriorated over the years owing to a number of factors such as prevalence of macro-economic instability, low repayment rates by clients, significant shortage of investible funds."