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CBN, state Governors sign MoU on MSMEs fund

By BusinessNews Staff on July 26, 2014

The Central Bank of Nigeria (CBN) yesterday signed a Memorandum of Understanding (MoU) with the Executive Governors of Delta, Osun, Oyo, Akwa-Ibom and Borno States on the operation and administration of the N220 billion Micro, Small and Medium Enterprises (MSME) development fund which was launched last year.

It also emerged that the actual disbursement of the fund is expected to be performed by President Goodluck Jonathan, during the forthcoming annual MSME conference schedule to hold in August.

Speaking at the signing ceremony in Abuja, the CBN Governor, Mr. Godwin Emefiele, described the MSME sector as a critical engine for economic growth and having the potentials to create jobs as well as reduce poverty.

He, however, lamented that the sector which had a financing gap of about N9.6 trillion had never been adequately financed in the country.

He noted that the CBN MSME fund was intended to improve access to finance for small enterprises at single digit interest rate, in order to reduce poverty, adding that no bank would be allowed to charge above nine per cent interest rate on the fund.

He said all states were currently eligible to access N2 billion which would be administered by commercial banks.
Emefiele said without such intervention by government, it would be difficult to reduce poverty and create the kind of jobs that would lead to economic development.

He noted that the CBN would among other things deploy specialised teams to monitor the effective use of the fund by all beneficiaries.

Following a collective plea by the state governors, Emefiele said the CBN would work towards minimising the obstacles and processes required to get the funds to beneficiaries.

However, the state governors unanimously commended the new CBN Governor for adopting an all-inclusive approach in the administration of the fund to all the states of the federation.
They, however, demanded that the fund be increased to accommodate more entrepreneurs. They also sought to limit the bureaucracy in getting the funds to the beneficiaries.

Specifically, Governor Godswill Akpabio of Akwa Ibom State commended the CBN governor for introducing an all-inclusive approach to funding, noting that many states had never been given such an opportunity to participate in any intervention.

He said given the magnitude of work to be done in the states to create jobs, it was important for the CBN to increased the amount which states can access to about N4 billion. He added that there was the need to remove all hurdles and give money directly to Microfinance banks for onward lending to beneficiaries.

Also, Governor of Oyo State, Mr. Abiola Ajimobi, described the fund as a good step in the right direction and praised Emefiele for trying to close the existing developmental gap in the country.

But he said the fund should be administered according to the needs of states, adding that prior assessment should be conducted to ensure that states are not given amounts they don’t need.

On his part, Governor of Delta State, Mr. Emmanuel Uduaghan, said unemployment posed a greater challenge to leaders globally, stressing that the MSME fund was the “low hanging fruit” which small entrepreneurs needed to develop the economy. He said there was need for increased interventions in order to develop the sector, adding that the state government would join hands with the CBN initiative to create more jobs.

Also speaking at the ceremony, Governor of Osun State, Mr. Rauf Aregbesola, said there was no better way to solve the country’s problem than supporting the MSME sector.

He said there was need to engage the over 50 million youths who are without gainful employment, so they could commit their energies to productive purposes rather than crime.

[This Day]

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