CBN Supports SMEs With N500m

The Central Bank of Nigeria (CBN) has released N500 million to the Enugu State Government to finance 1,600 micro enterprises as part of its commitment to supporting small and medium enterprises (SMEs) in the eastern region of Nigeria.

The micro, small and medium enterprises (MSMEs) were recommended by the Enugu SME center under the state micro, small and medium enterprise development programme (MSMEDP).

This was disclosed by the special adviser to the governor on SMEs, Mr Anayo Agu, in a statement, who said the funds represented just the first tranche of over 3,500 potential beneficiaries of the Enugu State-CBN micro, small and medium enterprise development fund (MSMEDF).

The second tranche will be comprised of SME borrowers and is expected before the end of the month. This development is sequel to the memorandum of understanding (MoU) signed between the CBN and 12 states, including Enugu, on the platform of the CBN N220 billion MSMEDF.

In the course of the past five months, the state prospected for borrowers through outreaches held in local councils, major commercial towns and religious groups in the state. The statement noted that all enterprises within the state could apply for the loan regardless of political and religious affiliations. The key criteria for deciding what enterprises get the loans would be the programme’s guidelines, and once they are met, applicants, including farmers, cooperative societies, and non-governmental organisations (NGOs) may borrow at least N100,000 for one year under a micro venture or a maximum of N50 million for five years to build a small or medium cottage industry.

The state has also undertaken the risk for the loan from the CBN by paying the three per cent interest to the apex bank and waiving it, such that the burden is heavily reduced on potential borrowers, thus making the loan soft. The state has also insisted that the participating micro-finance banks take no more than six per cent as administrative charge or interest rate per annum; this is inclusive of all bank charges for the three categories of loans under the fund. The growing support for SMEs in Nigeria is indicative of an understanding of the big role they play in developing the economy, driving productivity and reducing unemployment. As funding becomes less of an issue for SMEs, it will be useful to ensure the 

 

Source: Leadership