The Central Bank of Nigeria today announced the take off of the Agri-business, Small and Medium Enterprises Investment Scheme (AGSMEIS).
The scheme, which is an initiative of the Bankers’ Committee approved at its 331st meeting held in February this year, is targeted at start-ups and expansion of established companies or reviving of ailing companies is expected to further enhance job creation and agri-business towards sustainable economy.
The AGSMEIS was designed to support the Federal Government’s efforts and policy measures for the promotion of agricultural business and small and medium enterprises (SMEs) as vehicle for sustainable economic development and employment generation.
According to a statement sourced from the apex banking institution, indicates that the scheme’s operation requires all banks in the country should set aside 5% of their profit after tax (PAT) yearly for equity investment in Agri-business and SMEs.
According to the CBN, so far the scheme has garnered the sum of N26.87 billion from 21 banks to be invested in projects approved by the Board of Directors of the scheme.
On the Agri-business and SME activities to benefit from the scheme, the apex bank listed these to include, agricultural investments which such as production, storage, processing, logistics and marketing.
It clarified further: “While SMEs in the real and services sectors which are backward integrated into manufacturing, agriculture, mining and modular refineries would benefit from the scheme. Also included are technological endeavours such as local initiatives in information and communication technology (ICT) and any other activities as may be determined by the Bankers; Committee from time to time.”
In addition, the CBN stated that the AGSMEIS, which sets maximum investment in a single project to the tune of N2.0 billion, shall be operated for a period of 10 years (not exceeding 2027) in the first instance subject to review after 5 years of its operations.
Similarly, it pointed out that there shall be an initial 3-year lockup period before exit in order to encourage value creation and boost managerial capacity of the SMEs unless there is a material adverse event.
However, a Special Purpose Vehicle (SPV) named Bankers’ Fund Managers Limited, shall manage the scheme, while the Board of Directors (BoD) shall monitor its implementation.
In the interim, the apex bank stated that a Project Review Committee (PRC) with membership comprising seven Deposit Money Banks had been constituted to perform the function of the SPV. The Committee was inaugurated last August 17.