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CBN lifts SMEs with N289bn

By on September 9, 2014

A total sum of N288.98bn has been released by the Central Bank of Nigeria to the Bank of Industry in the last four years to finance 573 projects under the Small and Medium Enterprises Restructuring Refinancing Fund.

The figure was contained in a report of the sector prepared by the Development Finance Department of the CBN, obtained by our correspondent on Friday in Abuja.

It stated, “The N200bn SME Restructuring/Refinancing Fund was established by the CBN in March, 2010 to re-finance and restructure banks’ existing loan portfolios to manufacturers to achieve double-digit growth in line with the FSS 2020 SME financing target of 20 per cent of total credit to the economy.

“No fund was released to the BOI in the month of July, 2014. The total sum of N288.98bn has been released to BOI, and disbursed to 573 projects from inception to date.”

The report also showed that 1,540 people out of a target of 1,500 persons had been trained under the Entrepreneurship Development Programme of the CBN.

This scheme was said to have been initiated to unleash the entrepreneurial spirit of youths to set up their businesses, create employment and reduce poverty.

This, it added, represented 102.67 per cent of the target.

It noted that out of the 1,540 entrepreneurs so far trained, 882, representing 57.27 per cent, were males, while the remaining 658 or 42.73 per cent were females.

Cumulatively, the report explained that from inception, 7,288 people had been trained with 1,514 accessing a total of N126.57m as loans for their businesses.

This, according to the report, has helped the economy to create 3,734 jobs.

Of the 7,288 people so far being trained, it said 4,650 were males while 2,638 were females

It highlighted the challenges facing the initiative as keeping to the timeline and securing stakeholders’ buy-in; keeping to the timeline in selecting consultants to operate the centres as well as identifying the financing products for the EDC graduates.

Going forward, it said there was a need to engage the would-be host state governments to operate under a tripartite agreement.

It also stressed the need for continued sensitisation of the national, state and community leaders on the effective advocacy and prudent use of the funds.

The CBN Governor, Mr. Godwin Emefiele, last month, said that the financial gap of the SMEs, estimated at N9.6tn, was one of the major reasons why the apex bank intervened in the sector.

He said since the cost and access to credit had continued to be an inhibiting factor to the growth of many MSMEs in the country, the CBN would be working with relevant stakeholders to establish a secured transaction and a national collateral registry to facilitate the registration and acceptability of movable property as loan collateral.

Emefiele added that the bank would encourage venture capital companies to fund the MSMEs as well as set up a national credit scoring system to improve access to information on borrowers to positively influence credit decisions.

“We would also enhance the operations of credit reference bureaus. We believe that this effort will improve the information available to potential lenders or persons seeking loans and therefore help to isolate bad borrowers from credible ones,” he said.

He said, going forward, the CBN’s focus would remain on sectors that could create jobs on a mass scale as well as reduce the country’s import bill and conserve the foreign exchange.

 

[Punch]