The Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee yesterday started the disbursement of N26 billion Agribusiness Small and Medium Enterprises Investment Scheme (AGSMEIS) fund to the first set of beneficiaries.
The Governor of the apex bank, Mr. Godwin Emefiele, who flagged off the inauguration of the scheme in Abuja, said that the fund was set up by the Bankers Committee at its 331st meeting held on 9th February last year.
Emefiele, who recalled that as commitment to the successful implementation of the scheme, all Money Deposit Banks (DMBs) voluntarily agreed to contribute five per cent of their Profit After Tax yearly, explained that fund was specifically aimed at improving Micro, Small and Medium Enterprises’ (MSMEs’), particularly those operating in the informal sector, to affordable funding.
The seasoned banker commended the commitment of the DMBs to support the scheme, adding that by the end of next year, the disbursement rate of the fund would have risen to N60 billion.
He explained further the fund would be disbursed to youths, who had been trained on various entrepreneurship, vocational and management skills across the country by Entrepreneurship Development Institutions and Centres.
He listed some of the centres as the Fate Foundation, Lagos Business School, House of Tara and Thrive Agric.
The CBN Governor pointed out that unlike other intervention schemes in which funds were disbursed in cash, beneficiaries under the agribusiness programme would be given equipment that were commensurate to the required amount based on their trade areas.
He explained: “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 may 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 funding.
“Yet, access to funds has been an Achilles heel on entrepreneurship development in the country today. A situation often credited to financial intermediaries’ apathy to youth entrepreneurship and startups, which are usually perceived as being too risky, lacking relevant managerial skills and not possessing,’’ Emefiele stressed.
Emefiele said that the AGSMEIS would be implemented under three broad components, direct, indirect and developmental components.
Expatiating on the categories of disbursement of the scheme, the CBN Governor said that under the direct component beneficiaries could access loans to a limit of N10 million at an interest rate of five per cent per annum and a maximum tenor of up to seven years.
He explained that that there was also a moratorium period of 18 months on principal and six months on interest element, depending on the nature of the business.
The apex bank governor clarified, however, that under the indirect component of the scheme, the beneficiaries could access equity and quasi-equity investments of up to ten years with an initial lock up period of three years before divestment.
He explained that the developmental component of the scheme would be used for capacity building and technical assistance to support beneficiaries, adding that the apex bank would step up its developmental objectives so as to reduce the level of unemployment and create wealth that would support the nation’s economic growth.
Meanwhile, Emefiele also hinted that under the CBN Anchor Borrowers Programme, which was launched in November 2015, a total sum of N80 billion had been disbursed to 358,000 small holder farmers in 34 states, who are cultivating eight commodities.
A major highlight of the highlight of the AGSMEIS’ inauguration was the disbursement of materials worth N133 million to first set of 358 beneficiaries to start businesses in their chosen fields.
