Written by Sarah NEGEDU

CBN, Banks distribute start-up kits to SMEs

At least 358 youths took delivery of materials worth N133million in the first phase of the Agribusiness Small and Medium Enterprises Investment Scheme, AGSMEIS, of the Central Bank of Nigeria.

The disbursement is part of the N26billion AGSMEIS fund arrangement of the apex bank and the Deposit Money Banks in the country, aimed at encouraging beneficiaries start up their own businesses. 

The Bankers’ Committee had at its 331st meeting in February 2017, initiated the AGSMEIS to improve access to affordable financing for MSMEs, particularly those operating in the informal sector of the economy.

The banks agreed to contribute 5 percent of their Profit After Tax, PAT, annually to finance eligible projects under the Scheme.

Speaking at the launch of the program, the Central Bank Governor, Mr. Godwin Emefiele commended the commitment of the DMBs to supporting the scheme, saying the disbursement rate of the fund would have risen to N60billion by the end of the year.

“I am therefore very delighted that we have come to this stage where we are ready to begin the disbursement of these funds to deserving beneficiaries. These beneficiaries are youths who have been trained on various entrepreneurship, vocational and management skills across the country by Entrepreneurship Development Institutions and Centres, such as Fate Foundation, Lagos Business School, House of Tara and Thrive Agric.”

Unlike other intervention schemes where the funds were disbursed in cash, the AGSMEIS provides beneficiaries with specific implements needed to practice their vocations, upon completion of their vocational training at the Entrepreneurship Development Institutions and Centres.

“In Nigeria, the challenges of youth unemployment and restiveness must be confronted with strategic innovative thinking to provide sustainable solution. No matter how daunting the challenge may seem, I believe that with unity of purpose, we can fight this scourge together.

“There is no gainsaying the fact that one of the most effective ways to tackle this scourge, is through entrepreneurship development and easy access to affordable funding. Yet, access to funds has been an Achilles heel on entrepreneurship development in the country today. A situation often credited to financial intermediaries’ apathy to youth entrepreneurship and startups, which are usually perceived as being too risky, lacking relevant managerial skills and not possessing,” he said.

Emefiele said the scheme has three broad components, direct, indirect and developmental components. Under the Direct component the beneficiaries can access loans to a limit of N10 million, at interest rate of 5% per annum and a maximum tenor of up to 7 years. There is also a moratorium period of 18 months on principal and 6 months on interest element, depending on the nature of the business. However, it is mandatory that all loan beneficiaries must have valid BVN, which shall be registered on the National Collateral Registry and used to track repayments and blacklist any defaulters.

Under the Indirect component of the Scheme, beneficiaries can access equity and quasi-equity investments of up to 10 years with an initial lock up period of 3 years before divestment. Finally, the developmental component of the scheme shall be used for capacity building and technical assistance to support beneficiaries.

He also said the apex bank would step up its developmental objectives so as to reduce the level of unemployment and create wealth that would support the growth and development of the economy.

Speaking on behalf of the Bankers’ Committee, Group Managing Director, Access Bank Plc, Dr. Herbert Wigwe said the Scheme will help create jobs for millions of Nigerian youths as part of the corporate responsibility by the banks.

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