Counting the gains of CBN’s funding interventions for MSMEs

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The gains of the Micro, Small and Medium Enterprises Development Fund (MSMEDF) driven by the Central Bank of Nigeria, CBN, in pursuance of its development financing function under its overall macroeconomic growth support strategy are already being counted as part of the post COVID-19 economic performance scorecard.

Figures available to Vanguard showed that as at first quarter of this year 447,671 beneficiaries had been supported under the apex bank’s targeted credit facility across the country, with 58,229 businesses and 389,442 households affected by COVID-19 pandemic stimulated job retention across the real sector.

In the MSMEDF segment of its intervention, CBN financed 488 MSME projects nationwide, comprising 120 state projects and 368 private sector projects in agriculture, manufacturing, services, renewable energy and trading with 216,706 direct and indirect jobs created across the country.

There were also 55,422 budding entrepreneurs trained under the Entrepreneurship Development Centres established under the intervention.

The data presented by the bank’s director in charge of development finance, Philip Yila Yusuf, at a seminar for Business Editors and Finance Correspondents organised by the CBN, show that 28,961 agribusiness and artisanal projects were financed across the country, while 107,932 direct and indirect jobs were created under its Agribusiness Small and Medium Enterprises Investment Scheme (AgSMEIS).

Yusuf said CBN has financed 395 youth-owned projects in various sectors of the economy in line with its resolve to support entrepreneurial aspirations of youth MSMEs.

According to the CBN, the objective of the Fund is to channel low cost funds to the MSME sub-sector of the Nigerian economy through Participating Financial Institutions (PFIs) to enhance access by MSMEs to financial services; Increase productivity and output of microenterprises; Create jobs; and Engender inclusive growth.

The eligible enterprises under the Fund include: enterprises in the agric value chain, cottage industries, artisans, services, renewable energy/energy efficient product and technologies, as well as trade and general commerce.

Commenting on the efficacy of the initiatives so far in addressing the challenges of small businesses and their contribution to economic growth, Chairman, Nigeria Association of Small and Medium Enterprises, Abuja, Abiodun Ihebuzor, says the initiative is laudable.

He stated: “It is actually a timely intervention looking at the effects of Covid-19 on SMEs. It has provided a high-level succour, this is a facility that comes to small business owners at less than 9 percent, precisely 5 percent but when you add up other charges in terms of processing and management fee it still sits at below one digit of 9 percent.”

In recognition of access to finance as a key limiting factor to innovation and development of the global economy in Nigeria, the CBN introduced a number of developmental finance programmes and schemes to facilitate the attainment of its economic development mandate.

Specifically, in addition to the MSMEDF, the interventions were in Agribusiness Small and Medium Enterprises Investment Scheme (AgSMEIS), Creative Industry Financing Initiative (CIFI), Targeted Credit Facility (TCF), and the Nigeria Youth Investment Fund (NYIF).

National Spread

As progress report rolls out there has been some misgivings that the statistics seem to tilt in favour of certain sections of the country.

But CBN’s policy had thrown the opportunities open to all states of the federation equally, though some states appear to be less keen at taking the opportunities made available to them.

In response to this situation, CBN had launched a nationwide sensitisation programme to bring the citizens of all the states into the scheme through aggressive awareness campaign.

In one of such sensitisation programme held in Awka, Anambra state, the state’s Branch Controller of CBN, Mr. Onyewuchi Ihekweazu, noted that the fund was in recognition of the role states governments play in driving economic activities where the majority of end users of the funds reside.

According to Mr. Ihekweazu, CBN has mapped-out a window in the guidelines for all states to access the funds, which is of two components namely; social and commercial; and would monitor its usage to sanction anyone who might likely divert or abuse it.

In a remark, the state’s Governor, Willie Obiano, represented by the Commissioner for Agriculture, Chief Nnamdi Mekoh, re-affirmed that CBN has contributed a lot to development of the state especially in agriculture, and advised farmers and other benefitting individuals to endearvour to utilize the loans religiously as more would be given to them in nearest future.

Contributing at the event Mr. Dominic Ajibo of Onitsha Chamber of Commerce and Hon. Bridget Obi, reiterated the needs for information dissemination, segmentation, proper training and retraining of benefitting individuals through existing communal financial institutions and other available means so as to effectively achieve its objectives efficiently.

Commenting on the alleged lopsided distribution of the fundings, the CBN governor, Godwin Emefiele, in Port Harcourt, River State, where he commissioned projects sponsored under the apex bank’s intervention scheme, said that the apex bank has been working to boost economic activities in all parts of the country, without neglecting any region.

He said, “So far, our developmental finance initiatives at the Central Bank of Nigeria have been focused on creating an enabling environment that will drive both public and private sectors participation in the real sector with strategic deliverables around price stability, job creation, financial inclusion, import substitution and accretion to foreign reserve among others.

“Our interventions seek to improve access to credit for households and businesses which will enhance productivity and create value across a wide range of economic activities. Our interventions have cut across key sectors such as agricultural, manufacturing, health, and infrastructure. So far, the sum of N333.196 billion has been disbursed to various projects in the South-South region covering activities in these different economic sectors.

“Land development has been identified as a major constraint to increase in agricultural activities in the Southern parts of the country due to its topography. As a result, the CBN has partnered with several States Governments in the Region under the Accelerated Agricultural Development Scheme (AADS).

“The sum of N7.436 billion has been accessed by four States in the South-South regions to open up more land for cultivation, create access roads to agricultural lands, and provide infrastructure among other support services in the region. These measures are helping to induce greater activity in the agricultural sector and are enabling the movement of goods from farm to factories, and to the markets.”

Mr. Emefiele added that funds have been made available for States governments in the region that want to use the bank’s facilities to clear agricultural lands for their farmers, given the difficulties of the environment.

In his address , the Governor of Rivers state, Barr. Nyesom Wike, challenged Rivers state indigenes to utilise the apex bank’s facility in productive economic activities.

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