AGSMEIS fund supports developmental projects, says Wigwe

As a response to the argument that Nigerian banks are silent on developmental projects, Herbert Wigwe, group managing director/CEO, Access Bank plc, explains that the reason for the Agriculture and Small and Medium Enterprises Investment Scheme (AGSMEIS) is to support developmental projects.   

The AGSMEIS was established in 2016 by the Central Bank of Nigeria (CBN) and the Bankers Committee to improve access to affordable financing for MSMEs, particularly those operating in the informal sector of the economy and to support the Federal Government’s efforts and policy measures to promote sustainable economic development and employment generation.

Speaking at the 7th German Nigeria Business Forum in Lagos, Wigwe explained that banks sterilised five percent of their Profit after Tax (PAT) annually to finance eligible projects under the Scheme.

“The reason for that AGSMEIS fund is to help to support developmental projects. Upon all the money which we have raised so far, which was N26 billion as of last year, not up to N2 or N3 or N4 billion has been spent”, he said.

On the issue of high interest rates, he said if some structural problems in the country are addressed, some structural problems in the country are addressed; the amount of interest rates being charged by banks would reduce.

Some of the structural problems are infrastructure, power, and communication problem, among others. “We also need to look at the issue of infrastructure. Resolving power alone can bring down our cost of production by as much as 40 per cent. So, once some of those variables are resolved in the economy, interest rate will come down”.

He emphasised the need for Nigerians to look inwards and consume what is produced in the country, saying that there is no need to continue to import everything because “when you do that, you have imported inflation”.

“So, if we basically consume what is produced in Nigeria, what you see is that all of these variables would start coming down,” he added.

Wigwe explained the reason for setting up German desk in Access Bank. “What the German desk sets to do is to put Nigerian businessmen who seek to do business in Germany or buy German products, in touch with their German counterparts.

“Secondly, it puts German businessmen in touch with the appropriate Nigerian businessmen who intend to do business in Germany. The third thing it does is that it provides financing at affordable rates to both parties to continue to do their business,” he said.

“What we have done is to start to strengthen the relationship Nigerian businesses and German businesses”, Wigwe added.