The CBN Governor, Mr. Godwin Emefiele, confirmed the latest figures on Thursday in Abuja when he flagged off disbursement of N26billion Agribusiness/ Small and Medium Enterprises Investment Scheme (AGSMEIS) to beneficiaries, an initiative of Bankers’ Committee.
About 305 young beneficiaries received N115 million AGSMEIS loan scheme on Thursday. According to Emefiele, the fund is “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.” Emefiele, who expressed concern over rising unemployment among youths in the country, lauded Bankers Chief Executive Officers for setting aside 5 percent of their Profit After Tax (PAT) annually to finance eligible projects under the scheme.
He said the fund has peaked at N26billion as at Thursday and is projected to exceed N60 billion by June 2018. Emefiele said, “As we all are aware, data from the National Bureau of Statistics (NBS) shows that the rate of unemployment in Nigeria worsened somewhat marginally during the third quarter of 2017.
Reflecting the concerns and risks that this situation could pose for our collective peace and progress, we all committed, during the 2016 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 youths “.
“To give impetus to the scheme, he said 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.”
The CBN governor expressed delight about the scheme and urged beneficiaries to pay the loans to enable others benefit. Among the first set of MSMEs beneficiaries include 100 small holder rice farmers from Kebbi State trained and mentored by Thrive Agric.
The Kebbi small holder rice farmers, CBN governor explained, came together to apply for a loan to acquire a tractor with full implements. He said: “The tractor will 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 tonnes 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”.
Unlike conventional practice of giving cash loans, the AGSMEIS beneficiaries are provided with equipment of their vocations. The beneficiaries’ details including their Biometric Verification Numbers (BVN) are forwarded to the deposit money banks to confirm that they are their customers before accessing the fund.
Shedding light on the scheme, Emefiele said AGSMEIS has been designed to be implemented in three three broad components – Direct, Indirect and Developmental components. Under the Direct component of the AGSMEIS, beneficiaries can access loans to a limit of N10million, at interest rate of 5% per annum and a maximum tenor of up to 7 years.
There is also a moratorium period of 18 months on principal and 6 months on interest element, depending on the nature of the business. The governor said it is mandatory that all loan beneficiaries must have valid BVN, which shall be registered on the National Collateral Registry and used to track repayments and blacklist any defaulters.
“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 might 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 financing. Yet, access to finance 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 adequate collaterals acceptable for conventional credit”.
“There is a common cliché that describes a banker as “someone who lends an umbrella when the sun is shining and takes it back when it rains. I will like to assure you all that under the AGSMEIS, no bank will lend a beneficiary an umbrella and take it back during the rainy season”, Emefiele added.
