CBN’S, banks’ N26b entrepreneurship scheme kicks off

Beneficiaries get five per cent rate deal yearly

THE much-talked about N26 billion Agribusiness/small and Medium Enterprises Investment Scheme (AGSMEIS), packaged by the apex bank and commercial banks has commenced disbursements to the micro, small and medium entrepreneurs.

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, who flagged off the disbursement of funds to the first set of beneficiaries, last week, in Abuja, noted that the challenges of youth unemployment and restiveness must be confronted with strategic innovative thinking to provide sustainable solution. The fund, which CBN and the nation’s deposit money banks, under the aegis of Bankers Committee pooled together from their respective profits declared, is set to exceed N60 billion by middle of this year.

Addressing over 300 beneficiaries at the flag-off ceremony held at the Head Office of the CBN in Abuja, Emefiele, who led the four Deputy Governors of the bank and Chief Executive Officers of all Deposit Money Banks (DMBS) in Nigeria, said the disbursement was in fulfilment of the commitment jointly made by the Bankers’ Committee during its 2016 Retreat.

He said the committee agreed to design and fund a suitable scheme aimed at reducing the huge financing gap for Micro , Small and Medium Enterprises (MSMES), adding that the Fund was also aimed at job creation, financial inclusion and inclusive growth for Nigerians, particularly the teeming youth population.

Further to the 2016 commitment, he recalled that the Bankers’ Committee at its 331st meeting held on February 9, 2017, came up with the AGSMEIS as an initiative 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.

To ensure the successful implementation of the Scheme, he recalled that all deposit money banks in the countr y voluntarily agreed to set aside and contribute five per cent of their Profit After T ax yearly to finance eligible projects under the scheme, which currently stands at about N26 billion and is expected to exceed N60 billion by June 2018.

According to him, the first batch of beneficiaries were youth who had been trained on various entrepreneurship, vocational and management skills across the countr y by Entrepreneurship Development Institutions and Centres, such as Fate Foundation; Lagos Business School; House of Tara and Thrive Agric.

Unlike practices where physical funds were disbursed to beneficiaries, Emefiele said that this set of beneficiaries, upon completion of their vocational training, are being provided with the specific implements needed to practice their vocations, procured under the scheme.

He said the beneficiaries’ details, including their Biometric V erification Numbers (BVN), were equally forwarded to the deposit money banks to confirm that they were their customers before accessing the fund.

Citing recent employment statistics from the Nigerian Bureau of Statistics (NBS), he said the unemployment challenge was one that could be adequately tackled with unity of purpose from all stakeholders. While disclosing that beneficiaries under the three components of the AGSMEIS, namely Direct, Indirect and Developmental components would access the Fund at the rate of five per cent per annum, he said no bank would be allowed shortchange beneficiaries.

He disclosed that under the Direct component of the AGSMEIS, beneficiaries would be able to access loans to a limit of N10 million, at a maximum tenor of up to seven years. However, he said it was mandatory that all loan beneficiaries must ha ve valid BVN, which shall be registered on the National Collateral Registr y and used to track repayments and blacklist any defaulters.

Similarly, he said under the Indirect component of the Scheme, beneficiaries would be able to access equity and quasi-equity investments of up to 10 years with an initial lock up period of three years before divestment, while under the developmental component of the scheme would be used for capacity building and technical assistance to support beneficiaries.

Furthermore, the Governor stressed that the interest rate of 5% per annum being offered under the AGSMEIS further attested to the unflinching commitment of the deposit money banks to support entrepreneurs to actualize their dreams and ensure that the twin goals of increased emplo yment and poverty reduction are attained.

Recalling his pledge on assumption of office in June 2014, to create a professional and people centered Central Bank, with a focus on Development Financing, and the CBN acting as financial catalyst by targeting predetermined sectors that can create jobs on a mass scale and significantly reduce Nigeria’s import bills, he asserted that much had been achieved by the Bank in the past three years, besides the initiatives of the Bankers’ Committee.

He said the Anchor Borrowers’ Programme (ABP) had so far achieved tremendous success in terms of outreach and coverage, making the scheme one of the most successful CBN Development Finance initiatives to date, adding that about N80 billion had been disbursed to over 358,000 small holder farmers in 34 states, cultivating eight commodities.

He also expressed optimism that the National Collateral Registry (NCR), which was introduced to unlock access to credit, would have tremendous impacts on MSME lending in Nigeria in the foreseeable future, particularly in the implementation of the AGSMEIS.

Emefiele therefore urged all beneficiaries and indeed all youths in Nigeria to key into the Scheme, to take advantage of the opportunities made a vailable to them and to utilise the funds judiciously, according to the terms of the loan agreements.

CBN Governor, Emefiele