The Sun News On-line|Money Market

The governor of the Central Bank of Nigeria, Prof. Ckukwuma Soludo has commended the Lagos State Government and the management of FirstBank Nigeria Plc on the floating of a microcredit partnership scheme. This was disclosed at the formal launching of the CBN sponsored Entrepreneurial Development Centre (EDC) in Lagos.

Soludo said one thing is to have finance while another is to know what to do with the money, saying that was where the issue of skills become very critical. He said the essence of EDCs is to match skills with money, that is why I commend the partnership between Lagos State and FirstBank for providing microcredit to Lagosians. More so, the partnership is also keying into the EDC initiative."

The CBN governor stressed that those who go through the programme and acquired the prerequisite basic business management skills would have finance available to them on graduation. Added to the microcredit made available by FirstBank and Lagos State, is the N50billion microcredit scheme initiative of both the federal government and banks.

Soludo explained that the N50billion microcredit fund is available for on-lending to state governments as matching fund to about 1 per cent of the state’s budget which the states and local governments are expected to contribute annually to create a pool of fund for microcredit financing. "The states and microfinance banks are expected to on-lend this fund to micro entrepreneurs at single digit interest rate. So if Lagos State devotes XNaira as loans facility to micro entrepreneurs, the banks are ready to lend this same amount at single digit to micro entrepreneurs," he said.

He called on the states in the South West Zone and others in the federation to take full advantage of the initiative just like Lagos State, which is already keying into the initiative. Speaking on the EDC pilot project, the CBN boss emphasized, "what we are doing with the EDCs is to provide a prototype which every state and local governments in the federation can easily adapt to fit their peculiar environment."
Continuing he said, "So, each local government can have at least one of this EDC replicated all over the nation, this is to make the EDCs accessible to more Nigerians. If all states and local governments would devote 1 per cent of their annual budget to provide microcredit to graduates from these EDCs. This would go a long way to empower millions of Nigerian graduates who are looking for finance to start a micro business."

He advised that the states and local governments should also mainstream the setting up of microfinance banks. He revealed that all the over 800 microfinance banks owned by private entrepreneurs; saying "there are still opportunities for local and state governments to help mobilize their communities and indigenes to set up microfinance banks."
The governor noted that the whole essence of the EDCs and the microfinance banks is to demonstrate how to effectively engage millions of Nigerian youths who are unemployed, miss-employed or under-employed.