Nigeria: N220b MSMEs’ Fund for Launch Today

Aug 2014
Nigeria, August, 18 2014 - The N220 billion Micro, Small and Medium Enterprises Development (MSME) Fund designed by the Central Bank of Nigeria (CBN) to support entrepreneurs will be launched today by President Goodluck Jonathan in Abuja.

CBN Director, Banking Supervision, Mrs. Tokunbo Martins, said the launch would hold at the MSMEs Finance Conference organised by the CBN.

President Jonathan will declare the conference open and kick off the disbursement, which begins tomorrow.

He would also award prizes to MSMEs, Deposit Money Banks and state governments, which distinguished themselves in Entrepreneurship Development last year.

Participants at the conference include Micro, Small and Medium Entrepreneurs (SMEs), banks, MFIs, MFBs, deposit money banks, governors, federal ministers, heads of government agencies and departments, international development agencies and captains of industries.

The guidelines for disbursement showed that a 80:20 ratio for on-lending to micro enterprises and  SMEs and request that 60 per cent of the fund, representing N132 billion, be earmarked for providing financial services to women-owned businesses.

The banking watchdog said to ensure that productive sectors of the economy continued to attract more finance necessary for employment creation and diversification of the country’s economic base, a maximum of 10 per cent of the commercial component of the fund will be channelled to trading and commerce.

CBN Governor, Godwin Emefiele said at the N220 billion MOU Signing Ceremony between the CBN and participating state governments that MSMEs are globally recognised as the critical engines of economic growth due to their potential to create jobs, boost production, generate income, and reduce poverty. Despite this recognition, MSMEs in the country do not have the adequate financing needed to play this pivotal role in its development trajectory.

A joint report by the International Finance Corporation and McKinsey, the financing gap of this critical sub-sector of the country is about N9.6 trillion as at 2010.

The N220 billion, he said, is meant to address this gap and unlock the potential of the MSMEs  as an innovative way of improving their access to finance, shoring up their potentials for job creation, and enabling them reduce poverty within the country.

“This effort is in furtherance of the bank’s earlier endeavour at establishing six Entrepreneurship Development Centres (EDCs) in each geopolitical zone to support the mandate of the 23 Industrial Development Centres (IDCs) under the purview of the Small and Medium Enterprises Development Agency (SMEDAN),” he said.

Emefiele said while the micro-loans will be administered through private or state-owned microfinance institutions, finance houses, and cooperative finance agencies, the SME loans will be disbursed through the DMBs. State governments will be able to access up to N2 billion each for lending to eligible beneficiaries through participating financial institutions in their states.

Source : The Nation

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