sector and smes. the main objective of the fund is to fast - track the development of the manufacturing sector by improving access to credit by manufacturers as well as improving the financial position of the dmbs. the types of facilities under the fund include long term loans for acquisition of plant and machinery, refinancing of existing loans, resuscitation of ailing industries, working capital and refinancing of existing leases. the loan amount for a single obligor is a maximum of n1 billion in respect of re - financing / re - structuring with an interest rate of 7 per cent payable on quarterly basis. all commercial banks and development finance institutions ( excluding boi ) had all been enlisted to participate in the scheme. as at the end of december 2010, n199. 6 billion had been disbursed to 539 beneficiaries across twelve different sectors of the economy. 23. the n200 billion small and medium scale enterprises guarantee scheme established by the cbn in 2010 aims at promoting access to credit by smes in nigeria. the scheme provides guarantees on loans by banks to the sector in order to absorb some of the risk elements that inhibit banks from lending to the real sector. the activities covered under the scheme include manufacturing and agricultural value chains ; smes, processing, packaging and distribution of primary products. the maximum amount that can be guaranteed is n100 million and is in the form of working capital, term loan for refurbishment, equipment upgrade, expansion and overdraft. the guarantee covers 80 per cent of the amount borrowed and is valid up to the maturity date of the loan, with maximum tenor of 5 years. 24. a new financing framework for agriculture, the nigerian incentive – based risk sharing system for agricultural lending ( nirsal ) is being introduced. this model of financing agriculture is different in many ways from the current model which has not yielded the desired impact of making adequate credit available in the sector. nirsal is a demand driven credit facility rather than the current supply driven funding. it would adopt a value chain approach to lending and banks would be free to choose which part of the chain they would be interested in lending. it would build the capacity of banks to engage and deliver loans by providing technical assistance, reduce counterpart risks facing banks through innovative crop insurance products, reward performance in agricultural lending and would be managed with performance based incentives. nirsal would pool the current resources in cbn ’ s agricultural financing schemes and other investor funds

sector of the economy. the four cardinal pillars of the reform are : enhancing the quality of banks, establishing financial stability, enabling healthy financial sector evolution, and ensuring that the financial sector contributes to the real economy, which is very critical to the type of growth that translates to improved welfare. 16. enhancing the quality of banks entails the initiation by the cbn of a five part programme to enhance the operations and quality of banks in nigeria. this programme consists of the following : industry remedial programmes to fix the key causes of the crisis ; risk - based supervision ; reforming the regulatory framework ; enhanced customer protection ; and internal transformation of the cbn. issues such as effective corporate governance, data quality, and financial crime have seen increased attention. more so, consumer confidence is also being tackled in the reform programme as complaint desks have been opened to ensure that financial services are delivered to customers as transparently and fairly as possible. 17. establishing financial stability entails conscious actions by the cbn, and other regulatory agencies to stem wide fluctuations in the key macroeconomic indicators. the high points of this pillar include, strengthening the financial stability committee within the cbn, establishment of macro - prudential rules, development of directional economic policy and counter - cyclical fiscal policies by the government and further development of capital markets as alternative to bank funding. it is hoped that the new macro - prudential rules would leverage on the following : limiting capital market lending to a set proportion of bank ’ s balance sheet ; prohibiting banks from using depositors ’ funds for proprietary trading, private equity or venture capital investment ; and adjusting capital adequacy and forward looking capital requirements driven by stress tests by the cbn. 18. enabling healthy financial sector evolution entails the cbn reviewing the basic one - size - fits - all model of banking. this has made possible the emergence of international, national, regional, mono - line and specialized banks such as non - interest banks, etc, with different capital requirements commensurate to the depth of their operations. 19. the fourth pillar of the reform has direct bearing on the development of the real sector as it seeks to position the banking system to contribute to the growth and development of the various sectors of the economy. the spirit of this pillar is anchored on the fact that real economic growth must be supported by actual rise in physical goods and services. this segment of the reform has sought to break from the classical orthodoxy of leaving the allocation of financial resources to the market forces. rather, the