CBN considers funding framework for youth entrepreneurs

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    The Central Bank of Nigeria (CBN) is working on instituting a framework that would enable young graduates from Nigerian universities to access low-cost loans for their own businesses.

    CBN Governor, Godwin Emefiele who broke the news yesterday in his keynote speech at the Convocation Lecture for the 51st Convocation ceremonies of the University of Lagos, said the framework on supporting youth entrepreneurship will be developed by the CBN’s development finance department in collaboration with the Nigerian universities management.

    “Our team from the development finance department at the CBN will go right to the universities and draw a framework under which this can be done because this is one aspect where we can begin to stimulate the entrepreneurship in our youths,” Emefiele said.

    Congratulating the graduating students, Emefiele urged them to take advantage of some of the bank’s intervention programs directly aimed at supporting SMEs such as the SME Credit Guarantee Scheme (SMECGS); Micro, Small and Medium Enterprises Development Fund (MSMEDF); Youth Entrepreneurship Development Programme (YEDP); Agri-business/Small and Medium Enterprises Investment Scheme (AGSMEIS); Creative Industry Financing Initiative (CIFI); Targeted Credit Facility (TCF) and the Nigeria Youth Investment Fund (NYIF).

    Speaking on the topic: “National Development and Knowledge Economy in the Digital Age: Leapfrogging SMEs in the 21st Century,” he said the young graduates can access seed capital from several youth investment-friendly programmes and interventions schemes set up by the CBN like the the N75 billion Nigerian Youth Investment Fund and  Creative Industry Financing Initiative (CIFI) to kick off their businesses.

    He said the youths will have necessary inputs to build successful SMEs and other businesses. Emefiele said that embracing the schemes will enable the new graduates to be creating jobs, not just for themselves but for others.

    “I must confess that given the population growth rate, and the large number of our graduating students, we need to begin to see how Small and Medium Enterprises (SMEs) can be incubated. The SMEs are the ones that develop and grow to large corporates, and  become great companies in the future. Going from this lecture today, we would like to see more universities, to begin to conduct sort of entrepreneurship development competition programme,” Emefiele said.

    Continuing, Emefiele told the graduates: “If you truly say you are a graduate of agriculture, are you graduating with a certificate of agriculture to begin to look for a job in a company or you are graduating with a certificate in agriculture to go into some agricultural business that will earn you revenue and profit, with which you can develop your life and country. Those are the kind of things we need today, and we would like to encourage universities to hone the entrepreneurial  skills of their students”

    Restating the profitability of agricultural businesses, the CBN boss disclosed that in Nigeria today, agriculture is one of the most profitable businesses . “We loaned as high as N10 billion to people for rice cultivation. The proceeds from the farm was used to repay the loan, and at the end of the day, they made profit of another N10 billion.”

    “If you are interested, we will share our number with you. Agriculture is profitable in Nigeria given the need for us to embrace food security. And we must achieve food security. The university community should get the students to embrace not just agriculture but entrepreneurial skill using digital technology for the good of themselves and country,” Emefiele said.

    He said the CBN also launched several youth investment-friendly programmes and interventions to empower Nigerian youths with necessary inputs to build successful SMEs and other businesses. He said the YEDP 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 N173.4 million has been disbursed to over 67 beneficiaries.

    He said 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 last year approved the sum of N75 billion for the establishment of the NYIF for the period of 2020 to 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, N2.04billion has been disbursed to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs.

    Furthermore, the Bank established the 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 N3.1 billion has so far been disbursed to 341 beneficiaries.

    Emefiele pledged the CBN’s readiness to increase its development finance interventions to further support start-ups and Small and Medium Enterprises (SMEs) in the country.

    He highlighted the critical role of vibrant and growing SMEs to the growth of the economy and the creation of jobs for Nigerian youth, noting that special consideration needed to be given to the strengthening of physical and ICT infrastructure to enable SMEs perform more efficiently and become globally competitive.

    While noting that the potential of SMEs in enhancing economic growth was hampered by limited access to finance, inadequate infrastructure and poor digital penetration, Emefiele enjoined the Government and the private sector to provide more support in addressing the challenges of SMEs in the country. Specifically, as users of new technology, he urged that policies should incentivise the adoption of innovations that will improve SMEs competitiveness and productivity. He also tasked all relevant stakeholders to deepen reforms that will improve human capital development through skills enhancement and proper linkage of research to the SME sector.

    Citing examples of other climes that have continued to harness the benefits of the knowledge economy to accelerate economic growth, through the contributions of SMEs, Emefiele charged tertiary institutions in the country to tap into the educational trends that are significant drivers of productivity in advanced and emerging markets, in order to reshape the existing curriculum, enhance the learning experience of students and foster innovation amongst the faculty and staff in Nigerian institutions.

    Emefiele further opined that enhanced collaboration between universities and players in key sectors of the economy such as agriculture, manufacturing and ICT were necessary to enable implementation of sound ideas generated from the universities.

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