Economy
13 States Yet to Benefit from SMIEIS
Banks 'still render false reports'
By Ayodele Aminu
Thirteen states out of the 37 states in the country are yet to benefit from the Small and Medium Industries Equity Investment Scheme (SMIEIS).
The sub-committee of the scheme, which made this known through the report it presented yesterday at Bankers' Committee meeting in Abuja, also observed that some banks were still rendering false SMIEIS report to the Central Bank of Nigeria (CBN).
It also noted that some banks are not complying with the scheme's guidelines on sectoral allocation of the funds set aside.
The Bankers' Committee is an association of the chief executives of banks and selected financial institutions, which meets bi-monthly to discuss the state of affairs in the industry. The Governor of the CBN usually chairs the meeting.
Banks and the CBN on the other hand established the SMIIES about three years ago to jump-start the growth of the real sector of the economy, regarded as the engine of growth. Under the scheme, banks set aside 10 per cent of their pre-tax profit. As at April 30, 2004, about N22.29 billion had been pooled by 83 banks.
The SMIEIS sub-committee- an arm of the Bankers' Committee listed the 13 States that are yet to benefit from the scheme as at April 30, 2004 to include Adamawa, Balyesa, Borno, Ebonyi, Jigawa, Katsina, Kebbi, Kogi, Niger, Osun, Taraba, Yobe and Zamfara.
It however noted that 24 States (including Abuja) have benefited from the scheme with Lagos State maintaining the lead with 107 projects or 58 per cent of the entire projects valued at N5.47 billion or 56 per cent of the value of the project.
Ogun State trailed with 13 projects or 7 per cent worth N474.5 million or per cent, Abia and Kaduna States registered 7 projects each, Edo and Kano States accounted for 6 each while other States ranged from 1 to 5 projects.
"Some banks are still rendering false returns to the Central Bank of Nigeria despite repeated reminders on this. Banks are reminded that the implementation of SMIEIS should be carried out with the same degree of diligence as they would in the normal course of banking transactions.
"The secretariat has been mandated to refer proven persistent false returns to the appropriate arm of the CBN for sanctions," the report stated.
The sub-committee also noted that some banks are not complying with the scheme's guidelines, which pegs investment in the Real Sector, Services Sector and Micro-enterprises at 60, 30 and 10 per cent.
"It is however pertinent to mention that some individual participating banks are not complying with the minimum 30 per cent limit for the services sector, thus concentrating their investments in that sub-sector.
"We also observed that a few other banks have attempted to empty their whole set aside fund with either indigenous or international Micro-Finance Institutions (MFIs) contrary to the specified limit of 10 per cent. Banks are reminded that only 10 per cent of the set-aside fund under the SMIEIS can be allowed as a micro-investment," the report warned.
During the period under review, the sub-committee disclosed that 53 participating banks reported a cumulative investment in185 projects valued at N9, 753,199,327.36. Compared with the preceding month when a cumulative of 67 projects worth N8.71 billion was recorded, this indicates a net increase of 18 projects valued N1.042 billion.
Sectoral distribution of these investments, according to the report, shows that investment in the Real Sector had so far recorded 133 projects valued at N6.567 billion, representing 72 per cent and 67 per cent in terms of number and value respectively, while the Service-related enterprises accounted for the remaining 52 projects or 28 per cent valued N3.177 billion or 33 per cent.
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