The Central Bank of Nigeria (CBN) has disbursed a total of N40.3 billion out of the N220 billion Micro Small and Medium Enterprise (MSME) development fund lunched in 2013. A breakdown of the disbursement shows that deposit money banks have accessed about N814 million, microfinance banks N2 billion, microfinance institutions, N100 million and some state governments have accessed N2 billion mark while some accessed N1 billion as first tranche.
Tobia Jonathan, head, relationship management of MSMED fund, development finance department, CBN, disclosed this at a workshop on MSME fund organized by the Sub-Committee on economic development, sustainability and gender of the Bankers’ Committee in Lagos. “We are holding meetings and discussions with them to facilitate access of this N220 billion by entrepreneurs. CBN is doing a lot of discussion, collaborations to ensure that this fund gets out of CBN and then people will begin to do business with this fund”. He noted that the CBN has reviewed the guidelines for the fund to enable many more participating finance institutions (PFIs) access the fund for on lending to MSMEs.
Consequently, the collateral required for accessing the fund has been reduced to 50 percent from 75 percent. Also the interest rates have been brought down to 2-9 percent from 3-9 percent. “We have reviewed the guidelines; for example, formerly you have to present two years exam report, now we have reduced it to one year, making easy. We are toning down the guidelines to ensure that many more MFBs access the fund”, he told journalists. \
According to him, the CBN governor has set a target that by the end of 2015, half of the fund would go out to the economy “which is why we are holding this workshop to encourage commercial banks to go out and get these SMEs, access their credit needs and bring them forward for funding under the fund”. Speaking with journalists during the workshop, Ubong Awa, project manager, International Finance Corporation (IFC), said the IFC was collaborating with the CBN to establish the national collateral registry which would be launched by June this year. He said this was important as it was part of efforts to stimulate financing to the MSME sector in Nigeria. “We are party to this because the collateral registry will form part of the infrastructure for pushing this initiative along.
We are creating awareness and enlightening operators of the bank and working with the Central bank on benefits of collateral registry”, he said. He added that “the MSME sector is important and financing in that sector is also something that needs to be attended to with some level of capacity and capabilities which we are bringing to the table because we have been involved in many projects such as this”.
