- CBN to Grow Agribusiness Intervention Fund to N60bn
The Central Bank of Nigeria, in collaboration with the Bankers’ Committee, on Thursday commenced the disbursement of N26bn Agribusiness/Small and Medium Enterprises Investment Fund to the first set of beneficiaries.
The fund was set up by the Bankers’ Committee at its 331st meeting held on February 9, 2017 to improve access to affordable ﬁnancing for Micro, Small and Medium-scale Enterprises, particularly those operating in the informal sector of the economy.
As a commitment to the successful implementation of the scheme, all Deposit Money Banks voluntarily agreed to set aside and contribute five per cent of their proﬁt after tax annually to ﬁnance eligible projects under the scheme.
Speaking at the inauguration of the scheme at the apex bank’s headquarters in Abuja, the CBN Governor, Mr. Godwin Emefiele, said the fund was designed to support the Federal Government’s efforts to promote sustainable economic development and employment generation.
He commended the commitment of the DMBs to supporting the scheme, saying the disbursement rate of the fund would have risen to N60bn by the end of next year.
The governor said the fund would be disbursed to youths who have been trained in 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.
He stated that unlike other intervention schemes where the funds were disbursed in cash, beneficiaries under the agribusiness programme would be given equipment that would be commensurate with the required amounts based on their trade areas.
Emefiele said, “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 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 intermediaries’ apathy to youth entrepreneurship and start-ups, which are usually perceived as being too risky, lacking relevant managerial skills and not possessing.”
He added that the AGSMEIS scheme would be implemented under three broad components of direct, indirect and developmental components.
Under the direct component of the AGSMEIS, the CBN governor said beneﬁciaries could access loans to a limit of N10m at an interest rate of five per cent per annum and a maximum tenor of up to seven years.
He added that there was also a moratorium period of 18 months on the principal and six months on the interest element, depending on the nature of the business.
Under the indirect component of the scheme, the CBN governor said beneﬁciaries could access equity and quasi-equity investments of up to 10 years, with an initial lock-up period of three years before divestment.