The Central Bank of Nigeria (CBN) yesterday commenced the disbursement of N26 billion Agribusiness/Small and Medium Enterprises Investment Scheme (AGSMEIS) fund contributed by all deposit money banks to finance eligible projects, CBN Governor, Godwin Emefiele said.
Speaking at a ceremony to commence disbursement of the fund, he said lenders contributed five per cent of their annual Profit After Tax (PAT) annually to the AGSMEIS fund which is expected to exceed N60 billion by June this year.
He said: โI 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,โ he said.
Emefiele said that upon completion of their vocational training, the specific implements needed to practice their vocations, are procured under the scheme. The beneficiariesโ details including their Biometric Verification Numbers (BVN) are forwarded to the deposit money banks to confirm that they are their customers before accessing the fund.
He said the commencement of funds disbursement under the AGSMEIS continues a tradition of voluntary initiatives by the Bankersโ Committee to promote developmental programmes for sustainable economic growth.
โIn designing the AGSMEIS, the Bankersโ Committee engaged with key stakeholders and relied on anecdotal evidence and lessons learnt from the implementation of the SMEEIS. Pivotal to such lessons, is that during a business life cycle, different types of financing are required, at the birth of the business, initial growth stage, expansion and mature operations phases,โ he said.
In line with this, AGSMEIS has been designed to be implemented in three (3) broad components, namely Direct, Indirect and Developmental components. Under the Direct component of the AGSMEIS, beneficiaries can access loans to a limit of N10 million, at interest rate of five per cent per annum and a maximum tenor of up to seven 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 Bank Verification Number, which shall be registered on the National Collateral Registry and used to track repayments and blacklist any defaulters.
He said the five per cent per annum being offered under the AGSMEIS further attests to the unflinching commitment of the deposit money banks to support entrepreneurs to actualize their dreams and ensure that the twin goals of increased employment and poverty reduction are attained.
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 three years before divestment.
Emefiel said the challenges of youth unemployment and restiveness in Nigeria must be confronted with strategic innovative thinking to provide sustainable solution.
โNo matter how daunting the challenge might 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 financing. Yet, access to finance has been an Achilles heel on entrepreneurship development in the country today.
A situation often credited to financial intermediariesโ apathy to youth entrepreneurship and startups, which are usually perceived as being too risky, lacking relevant managerial skills and not possessing adequate collaterals acceptable for conventional credit,โ he said.
He said the CBN and the banking sector are collaborating on a national Shared Agent Network programme, designed to ramp up access to basic financial services, such as cash-in, cash-out, funds transfer, bill payments, airtime purchase and government disbursements to an estimated 50 million persons who are currently either under-banked or unbanked. This initiative in partnership with licensed mobile money operators and super agents, is expected to roll out about 500,000 Shared Agent Networks within two years through the use of mobile technology.
