From Uche Usim, Abuja
Central Bank of Nigeria (CBN) Governor Mr Godwin Emefiele on Monday disclosed that a cocktail of solutions and interventions to ensure the Micro, Small and Medium Enterprises (MSMEs) attain their full potential, were being rolled out in the country.
Delivering a lecture at the University of Lagos at the weekend, Emefiele listed access to capital; poor infrastructure, weak managerial and organisational skills; low adoption of technology and innovation and poor knowledge networks as the major blights stunting MSMEs’ growth.
According to him, the CBN has unveiled massive developmental interventions in some critical sectors of the Nigerian economy, especially in agriculture, manufacturing and SMEs.
‘In terms of development finance interventions to directly support SMEs, the Bank has introduced several schemes and initiatives including the SME Credit Guarantee Scheme (SMECGS), Micro, Small and Medium Enterprises Development Fund (MSMEDF), Youth Entrepreneurship Development Programme (YEDP) and Agri-business/ Small and Medium Enterprises Investment Scheme (AGSMEIS). Others are the Entrepreneurship Development Centres (EDCs), National Collateral Registry (NCR), Creative Industry Financing Initiative (CIFI), Targeted Credit Facility (TCF) and the Nigeria Youth Investment Fund (NYIF).
‘One of the most recent schemes targeted at channelling low-interest wholesale funds to the MSME segment is the Small and Medium Enterprises Development Fund (MSMEDF). This scheme, which charges a 9% interest rate, has recorded the disbursement of over ₦83.9 billion to 216,704 beneficiaries at the end of 2020. The obligor limit ranges from ₦500,000 for micro-enterprises to ₦50 billion for SMEs financed by DMBs/DFIs. Also, the initiative offers 10% of the total loans for start-up businesses, 2% to economically active persons living with disabilities (PLWD) and 60% of the Fund’s wholesale component dedicated to women entrepreneurs or women-led MSMEs in order to promote financial inclusion.
‘Another intervention is the Agri-business/SME Investment Scheme (AGSMEIS), an initiative of the Bankers’ Committee, in collaboration with the CBN was also set up to improve access to affordable and sustainable finance by agri-businesses and MSMEs. This will enhance the creation of productive employment opportunities and boost the managerial capacity of agri-businesses and MSMEs. So far, a total of ₦111.7 billion has been disbursed to 29,026 beneficiaries.
‘Furthermore, a ₦50 billion Targeted Credit Facility was introduced in March 2020 as a stimulus package to cushion the effects of COVID-19 pandemic on households and MSMEs across the country. So far, under AGSMEIS and our targeted credit facility, over ₦111.7 billion and ₦253.4 billion have been disbursed to 29,026 and 548,345 beneficiaries, respectively.
‘The Central Bank also launched several youth investment-friendly programmes and interventions to empower Nigerian youths with necessary inputs to build successful SMEs and other businesses. One of such schemes is the Youth Entrepreneurship Development Programme (YEDP) which was launched in 2016 to enhance the deployment of the ingenuity and resourcefulness of Nigerian youths to achieve maximum economic development. Under the scheme, a total of ₦173.4 million has been disbursed to over 67 beneficiaries.
‘The target beneficiaries are members of the National Youth Service Corps (NYSC), non-NYSC (but with not more than five years post-NYSC), holders of verifiable tertiary institution certificates, and artisans with First School Leaving Certificate or a technical certificate or accredited proficiency certificate from the National Board for Technical Education (NBTE). Relatedly, the Federal Executive Council on the 22nd of July 2020 approved the sum of ₦75 billion for the establishment of the Nigeria Youth Investment Fund (NYIF) for the period of 2020 – 2023 to be funded by the CBN. The objective of NYIF is to improve access to finance for youth and youth-owned enterprises for national development. Under the scheme, ₦2.04 billion has been disbursed to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs.
‘Furthermore, the Bank established the Creative Industry Financing Initiatives (CIFI) aimed at improving access to long-term, low-cost financing to entrepreneurs and investors. It covers a wide range of sub-sectors in the creative industries, some of which include, movie and music production, fashion and ICT. Among the target opportunities is the graduate software development loan. While the disbursement is in phases, in line with the agreed milestone, a sum of ₦3.1 billion has so far been disbursed to 341 beneficiaries,’ he explained.
Emefiele noted that another area championed by the apex bank towards SMEs development relates to entrepreneurship and youth training.
‘The Bank has provided substantial support to some selected higher institutions in the country in order to enhance training and quality. This formed the basis for the construction of centres of excellence in eight Universities across the country, two of which have been completed, with others at various stages of development.
‘The Central Bank has prioritised financial inclusion as a deliberate strategy to reduce the percentage of adults excluded from financial services. This is intended to increase the access to finance for households and SMEs. To achieve increased financial inclusion, the revised strategy focuses on areas with significant gaps in inclusion rates
‘As SMEs continue to play strategic roles in strengthening national economies and creating jobs, the catalytic roles of knowledge and innovation are essential for delivering more inclusive growth. With the abundant resources at our disposal, including a large population of over two hundred million (200 million), natural resources and a favourable climate among others, extensive measures must be put in place to accelerate the development of the economy and to make it more globally competitive. In this regard, the following policy options should be considered.
‘Special consideration should be given to the strengthening of physical and ICT infrastructure to enable SMEs to perform more efficiently and become globally competitive.
‘Increase efforts towards accelerated diffusion of technology among SMEs. As users of new technologies, policies should incentivise the adoption of innovations that will improve SMEs competitiveness and productivity,’ he added.