The Deposit Money Banks have begun the disbursement of the more than N26 billion enterprise development intervention fund under the Agriculture and Small and Medium Enterprises Investment Scheme (AGSMEIS) by the Bankers’ Committee.
The bankers at their yearly reteat in Lagos, last December, agreed to put the funds in the hands of Micro Small and Medium Enterprises’ across sectors starting January 1, 2018, regretting that such a huge amount pooled together since last year had remained idle.
The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, assured: “We are going to be disbursing small loans like N100,000; N200,000; and N500,000 at not more than five per cent.”
The disbursements, is targeted at small businesses owned by “weak and vulnerable” entrepreneurs, who cannot kick off their bankable projects due to funding, and they include barbers, hairdressers and small agribusiness owners,
The bankers also expanded the scheme to incorporate those who want to learn tiling, mason and house interior decorations, among others, offering to train and equip, as well as take them through the daily management of such enterprises.
Emefiele, said the move to support artisans and increase their number, is targeted at creating about 100,000 jobs in the first quarter of this year.
The tenor of the facility is long enough for small businesses, with a minimum of seven years and moratorium, so that those who accessed the fund can do so at low pricing and at a tenor that would give them ample time to repay.
“We are going to get people who will train them in those various skills taking into consideration the various geo-political zones. After training them, like we do in Anchor Borrowers Programme, where we buy seedlings, fertilisers, herbicides for them, we will buy equipment and deliver to them.
“When we cost their project, we will also deliver to them some kind of working capital, in case they need to rent a store and those kind of things to make them operational,” he said.
On the part of the CBN, its entrepreneurial development centres across the six geo-political zones of the country may now serve as a training place for people that would benefit from the scheme.
To get banks committed fully to the initiative, the committee agreed that as it takes off this January, while it must be a non-profit maximisation goal, there must be professional and transparent management process, to give everybody comfort.
Meanwhile, other incentives that would serve as a morale booster for banks’ participation may soon be unveiled, to keep the agreements binding as the funding takes off.
These include risk sharing modal, involving the borrowers, the apex bank’s use of differential Cash Reserve Requirement and possible participation of Development Finance Institutions.
“Currently on the agriculture side, the CBN has an institution known as the Nigeria Incentive-based Risk Sharing for Agricultural Lending. That is working, but the committee feels that CBN can create a Nigeria Incentive-based Risk Sharing for SME Lending still under the same NIRSAL.
“We give ourselves the target that once we resume in January, it is going to be all work to make sure that those who require credit and the help of the banking system to create jobs that would grow the economy, will get them seamlessly.