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Lagos, Nigeria, February, 19 2008 - President, Alhaji Musa Yar'Adua last week Tuesday, launched the N50 billion micro-credit development fund with a promise to reduce poverty level to below 20 per cent by 2015.
The N50 billion micro credit development fund is a creation of the bankers' committee and would be administered by the Central Bank of Nigeria (CBN).
Speaking during the occasion, Yar'Adua explained that with the various poverty reduction programmes being enunciated by his administration, the level of poverty in Nigeria would be reduced to below 20 per cent by 2015.
He commended the efforts of the apex bank for the proactive initiative of setting up the fund and its quest to make Nigeria's banking system as the fastest growing sector in African, adding that CBN has positioned itself towards achieving an effective micro credit system in Nigeria.
Yar'Adua said that the CBN's seminar on Banks and the Nigerian Economy" is a forum for reviewing and brainstorming on the way forward for an efficient, effective and an encompassing credit system.
He congratulated the bank for the successful conversion of community banks to Micro-Finance Banks as well as the licensing of new ones, bringing the number to 716 microfinance banks in the various parts of the country.
The President urged all stakeholders in the Nigeria project, especially the Organised Private Sector (OPS), to work towards the actualization of the Financial System Strategy (FSS) 2020.
According to him, the efforts of the CBN management, led by Professor Chukwuma Soludo is commendable especially for the restructuring of the banking and financial sector, which has resulted in the Nigerian economy emerging as the fasted growing in Africa.
He said "I must also note the commendable effort of CBN for making Nigeria. Africa 's financial hub".
The President further assured that his administration is committed to ensuring the implementation of the FSS 2020 initiative which implementation committee would soon be inaugurated.
He promised to address the infrastructural inefficiencies pervading the country and disclosed that he has mandated the Attorney General of the Federation to work with the FSS2020 implementation committee with a view to recommending legal and constitutional issues that would be addressed by the National Assembly as soon as possible.
The President charged the states and local governments to make available the one per cent of their annual budgets to the fund, which is expected to have wider distribution to the poor and vulnerable group nationwide.
Earlier in his opening address, Soludo
had told the audience, which also included some state governors, chief executives of banks and other major players in the economy that some of the benefits of the consolidation exercise included the creation of more bank branches, jobs, capital, and better international ratings for the banks and the economy.
He disclosed that the capital base of eleven banks out the 24 banks in Nigeria will hit $1 billion each by end of February, 2008, while the total assets of all the banks is currently estimated to have reached N10.431 trillion as at ending of December, 2007.
The CBN Governor further disclosed this while making his presentations on the over view of the one-day national seminar on "Banks and the Nigerian economy " and the launching of "N50 billion Micro Credit Development Fund" recently in Abuja .
He explained that there is a correlation between a sound and vibrant financial system and the development of any nation.
According to him, since 2003, the inflation rate year on year basis has reduced from 23.80 per cent in 6.60 per cent, interest rate (prime lending rate decreased from19.60 per cent to 16.46 per cent, exchange rate of the Naira has appreciated from N137.0 per Dollar to N117.97 per Dollar, external debt reduced from $32.92 to $3.63 billion, while credit to private sector has increased from N1.191 trillion to N4.941 trillion just as the Net Domestic Credit had also increased from N1.803 trillion to N2.212 trillion as at end of December, 2007.
He further added that as at end of December, 2007, only one bank had deposit size less than N50 billion, noting that people now have confidence to keep their money in the banks for longer tenure.
However, Soludo maintained that despite the fact that the Nigerian financial system has grown as it plays big roles in the transmission of the Government's finance policies to achieve economic development, alot still has to be done to improve the microeconomic environment to generate the desired investment and growth in the country.
The Nigerian banking industry, he said, is daily getting stronger and "remain the fastest growing," with cumulative shareholders' funds of about N320 billion. This is why, he explained, many of the country's banks are now among the top 1, 000 banks rated by The Banker magazine among the top 500.
Challenges facing the industry today, he stressed, included the need for adequately financing in the agricultural and mortgage sectors, as well as growing consumer credit. Nigerian banks, he said, would have to work a little harder than they are currently doing to improve on their present ratings.
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