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Funds pooled by the commercial lenders under the Agribusiness/Small and Medium Enterprises Investment Scheme (AGSMEIS) is already in excess of N26 billion, and is expected to exceed N60 billion by June 2018, CBN governor, Godwin Emefiele, said as disbursements of the funds began in Abuja, last week.
The flag off saw the disbursement of about N118 million to 358 beneficiaries under the scheme that seeks to reasonably cut the present high unemployment rates in the country.
The 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.
The Bankers’ Committee had, at its meeting on February 9, 2017, came up with the AGSMEIS to improve access to affordable financing for MSMEs, particularly those operating in the informal sector of the economy, and to support the Federal Government’s efforts and policy measures to promote sustainable economic development and employment generation.
As a commitment to the successful implementation of the scheme, all deposit money banks, voluntarily agreed to set aside and contribute 5 percent of their profit after tax (PAT) annually to finance eligible projects under the scheme.
Quoting data from the National Bureau of Statistics (NBS), Emefiele said the rate of unemployment in Nigeria worsened marginally during the third quarter of 2017, and that this raised concerns and risks for the collective peace and progress across the nation.
He noted that one of the most effective ways to tackle this scourge was through entrepreneurship development and easy access to affordable financing, which according to him, has been a huge challenge to entrepreneurship development in the country today.
He regretted the financial intermediaries’ apathy to youth entrepreneurship and start-ups, which are usually perceived as being too risky, lacking relevant managerial skills and not possessing adequate collaterals acceptable for conventional credit.
He said the situation therefore led the Bankers’ Committee Retreat, to design and fund a suitable scheme that will not only reduce the huge financing gap for Macro Small and Medium Enterprises (MSMEs), but also fully commits to the pursuits of job creation, financial inclusion and inclusive growth for Nigerians, particularly the teeming youth population.
The AGSMEIS has been designed to be implemented in three 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 5 percent per annum and a maximum tenor of up to seven years. There is also a moratorium period of 18 months on principal and six months on interest element, depending on the nature of the business.
He also noted that the flag off ceremony would not be the usual symbolic handing over of large cardboard cheques, but physical distribution of equipment as required by beneficiaries to kick start their businesses.
The governor, stressed, however, that it was mandatory that all loan beneficiaries must have valid BVN, which would be registered on the National Collateral Registry and used to track repayments and blacklist any defaulters.
Some of the first set of beneficiaries was 100 smallholder rice farmers from Kebbi State trained and mentored by Thrive Agric, who came together to apply for a loan to acquire a tractor with full implements.
Emefiele said the tractor would replace the traditional farming practices, which involve the use of hoes and cutlasses for land preparation, harrowing, ridging, bedding and harvesting.
“This will increase efficiency and double their production yield of rice paddy from currently about 3 Metric Tonnes per Hectare to 6 metric tons per hectare on the same piece of land, thereby increasing wealth of the farmers.
“Another fine example, I dare say, are the young men and women who have been trained and mentored in fashion designing, photography and cosmetology by House of Tara and Fate Foundation and who will be receiving their first set of photography equipment, sewing and embroidery machines and make-up starter kits today.”
Emefiele said the beneficiaries’ details including their BVN were forwarded to the deposit money banks to confirm that they were their customers before accessing the fund.
He added that the scheme would significantly, reduce youth unemployment and restiveness, increase social cohesion and drive inclusive economic growth.
“Under the AGSMEIS, no bank will lend a beneficiary an umbrella and take it back during the rainy season,” Emefiele assured.
Also at the meeting, Emefiele said the CBN and the banking sector were 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.
He said the 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.
Emefiele also said that the Anchor Borrowers’ Programme has so far achieved tremendous success in terms of outreach and coverage since its launch in November 2015, making the scheme one of the most successful CBN Development Finance initiatives to date.
He said currently, about N80 billion has been disbursed to over 358,000 smallholder farmers in 34 states, cultivating eight commodities.
“The success of the programme has culminated in wealth creation for the small holder farmers, who hitherto had been crowded out of the formal financial system, deepening of markets and value addition along the value chain of the various commodities.
Meanwhile, the National Collateral Registry introduced to unlock access to credit, have registered 26,899 financing statements valued at over N540 billion, involving 410 financial institutions since the commencement of live operations in May 2016.
The governor expressed optimism that the Collateral Registry would have tremendous impacts on MSME lending in Nigeria in the foreseeable future, particularly in the implementation of the AGSMEIS, as all equipment financed under the Scheme must be registered on the platform.
Herbert Wigwe, managing director of the Access Bank, who spoke on behalf of the bank CEOs, said the AGSMEIS was one of several schemes by the Bankers’ Committee to contribute substantially to the economy through youth empowerment and job creation.
He, however, urged the beneficiaries to ensure they pay back the loans as at when due to enable other people benefit.
Representatives of Thrive Agric, House of Tara and Faith Foundation who trained the beneficiaries and spoke at the event said the scheme is a dream come true, both for them and the entrepreneurs.
They equally urged the beneficiaries to stick to the business ethics, which they have been taught in order to sustain their businesses and also ensure they repay the funds.
