… N267b still trapped in 18 Nigerian Banks …Citibank, Ecobank record zero default
By Baron Ike
Top rate Nigerian banks have defaulted in their promise to be used as vehicle by the apex bank to disburse N605.9 billion to customers involved in agribusiness in Nigeria under the Commercial Agriculture Credit Scheme (CACS).
Access, UBA, Zenith, First Bank, GTB, FCMB, Heritage, are among other “big” banks that are currently on default lane as huge sums are still trapped in their vaults or customers kitty.
Armadanews.com learnt that about N267.5billion meant for the CACS are still trapped in 18 Nigerian banks out of 20 banks that their customers benefited as the Central Bank of Nigeria (CBN) economic report for the first quarter (Q1) of 2019 has revealed.
CBN Governor, Godwin Emefiele
Hubert Wigwe , GMD, Access Bank
Ebenezer Onyeagwu, GMD, Zenith Bank
Adesola Adedotun, GMD First Bank
The CBN and Federal Ministry of Agriculture (FMA) established the CACS to fast track the development of the agricultural sector in Nigeria by giving loans support to agribusinesses.
As at March 20, 2019, the total amount released since inception by the CBN under the CACS to the participating banks for disbursement, amounted to N605.9 billion for 586 projects, while total amount repaid only stood at N338.4billion.
The huge portion of unpaid Commercial Agriculture Credit facility in 18 banks represents 44.15 per cent of the total about disbursed, this news medium can confirm.
.Segun Agbaje, GMD, GTBank
Ifie Sekibo, MD, Heritage Bank
The apex bank is yet to release the report for the second-quarter (Q2) but its data on disbursement and repayment as at March 20, 2019 shows banks that gained most and those with more of such funds in their customers’ hands.
Out of N36.66billion disbursed from the CACS since inception to customers of Access Bank Plc, only N29.26billion has been repaid as at Q1’2019.
It implies that N7.4billion of the CACS facility is yet to be repaid by the bank’s customers.
The N3billion that was disbursed to Citibank Plc was repaid in full, according to CBN report.
The customers of Diamond Bank, a former lender that combined its business with Access Bank Plc got N4.85billion but only N3.95billion has been repaid as at Q1’19, representing N900million unpaid CACS facility.
Like Citibank, another international lender, Ecobank Plc has zero record of default rate in the CACS as its customers received N6.38billion and paid back same.
Meanwhile, FCMB disbursed N18.53billion but only N9.22billion has been repaid, remaining N9.31billion.
Fidelity Bank Plc disbursed N23.67billion to its customers but only N12.98billion has been repaid.The bank’s customers are yet to repay N10.69billion.
First Bank of Nigeria disbursed N50.52billion but only N35.50billion has been repaid, remaining N15.02billion.
Another Tier-1 lender, GTBank Plc which disbursed N39.85billion to its customers recorded repayment of only N17.53billion in the review first-quarter, remaining N22.32billion.
Heritage Bank disbursed N6.81billion but only N2.36billion has been repaid by the beneficiary customers. About N4.45billion are still in Heritage Bank’s customers hands.
The scheme is aimed at fast tracking the development of the agricultural sector by providing credit facilities to large scale enterprises with a minimum asset size of N50 million at a single digit interest rate of 9percent.
In 2018, CBN amended the CACS guidelines. As part of the efforts by the apex bank to deepen access to finance and reduce exclusion rate, it revised the earlier existing CACS guidelines to include Non Interest Financial Institutions (NIFIs).
According to the CBN data out of N30.05billion disbursed by Keystone Bank to its customers only N3.97billion has been repaid, remaining N26.08billion.
Meanwhile, none of the N2billion disbursed by Jaiz Bank Plc has been paid as at Q1’19, the data obtained by Armadanews.com has shown.
Polaris Bank Plc which disbursed N13.77billion recorded repayment worth N11.73billion, remaining N2.04billion.
Further details show that customers of Stanbic IBTC Bank are yet to pay N9.22billion.
The bank disbursed N28.10billion but only N18.88billion has been repaid.
For Sterling Bank Plc which disbursed N72.17billion, only N25.29billion has been repaid, remaining N46.88billion.
Meanwhile, Union Bank Nigeria Plc has received only N51.52billion as repayment of the CACS facility out of a total N83.06billion the bank disbursed. It remains about N31.54billion.
For United Bank for Africa (UBA) Plc it disbursed N28.91billion but recorded N19.11billion as repayment for the facility, remaining N9.8billion.
Unity Bank Plc gave out N29.80billion CACS loan but only N12.95billion has been repaid, remaining N16.85billion.
Out of the N3.24billion which Wema Bank Plc disbursed to its customers, only N1.30billion has been repaid, remaining N1.94billion.
Zenith Bank Plc which disbursed N122.66billion as CACS loan had seen only N73.23billion repaid, remaining N49.43billion.
One of the newest entry into the banking sector, Suntrust Bank Limited has already given out N1.85billion as CACS loan, but only N250million has been repaid, remaining N1.6billion.
An analyst told Armadanews.com that the high rate of default may be connected to the manner the loans were disbursed.
Either they gave the loans to themselves or their friends or relatives, she said.
“Talk of giving the facility to close ones who may not see the need to repay the loans, you may not be wrong. Unfortunately, most banks in the country have not learnt anything from the risks from uncollateralized loans,” the analysts said.
Meanwhile, CBN economic report for first-quarter (Q1) shows that the Agricultural Credit Guarantee Scheme (ACGS) guaranteed a total of N654.9 million to 6,281 farmers in the first quarter of 2019.
The amount represented a decline of 23.2 percent and 20.7 percent, below the levels in the preceding quarter and the corresponding period of 2018, respectively.
Sub-sectoral analysis showed that food crops got the largest share of N377million (57.6percent), guaranteed to 4,999 beneficiaries, followed by the livestock sub-sector, N110.5million (16.9percent), guaranteed to 448 beneficiaries.
Also, the sum of N71.9 million was disbursed to cash crops (11percent), guaranteed to 382 beneficiaries, while fisheries, mixed crops, and ‘Others’ got N51.4 million (7.9percent), N24.8 million (3.8percent) and N19.3 million (3.0percent), guaranteed to 160, 201, and 91 beneficiaries, respectively.
Analysis by state revealed that 27 states and the Federal Capital Territory (FCT) benefited from the Scheme in the quarter under review, with the highest and lowest sums of N97.9 million (15percent) and N0.5 million (0.1percent) guaranteed to Plateau and Bayelsa states, respectively.