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CBN to review guidelines for accessing N220bn MSME Development Fund

by Editor

December 1, 2014 | 3:34 pm
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The Central Bank of Nigeria (CBN) says it will soon review the guidelines for accessing the N220 billion Micro, Small and Medium Enterprises (MSME) Development Fund to ensure easy access.

The Acting Director, Development Finance Department of CBN, Mr Mudashir Olaitan, said this at a workshop organised by the Nigeria Deposit Insurance Corporation (NDIC) for business editors and finance correspondents in Kastina.

The theme of the workshop is: “Recent Development in the Nigeria Banking System”.

Olaitan, who spoke on “Framework for the N220 billion MSMEs Development Fund”, said that five commercial banks had already signed Memorandum of Understanding with the CBN on the way forward.

According to him, the banks are United Bank for Africa (UBA), Skye Bank, Guaranty Trust Bank, Zenith Bank and Fidelity Bank.

Olaitan said the commercial banks were, however, “foot-dragging” because the small volume of the lending under the fund and the little profit margin from their intermediation role.

The News Agency of Nigeria (NAN) reports that the CBN gave out the loan at three per cent interest rate but commercial, micro finance and development banks want nine per cent.

He added that the CBN launched the fund to close the financing gap of the sub-sector estimated at N9.6 trillion as at 2010.

Olaitan said that the bank recognised that access to finance remained the most critical challenge to MSMEs development and could not play their roles effectively.

He said the MSMEs globally served as engine of economic growth, vehicle for job creation, drivers of production and income generation as well as tools for poverty reduction and wealth creation, among others.

The assistant director said that 60 per cent of the fund had been earmarked to provide financial services to women for their peculiar financial exclusion circumstances.

Olaitan said the CBN wanted a ratio of 50:50 for on-lending to micro enterprises and Small and Medium Enterprises (SMEs).

He added that the 20 per cent of the wholesale component of the fund was meant for economically active persons with disabilities.

He also said that eligible enterprises in agricultural value chain activities, services, artisans, cottage industries, trade and general commerce and any other income generating projects could benefit.

“The MSMEDF is to provide long-term affordable funding for the MSMEs.

“This will require the commitment of all stakeholders to achieve the desired objectives of the real sector growth of the Nigerian economy.

“The fund disbursed is to be repaid while the CBN has put in place a robust strategy to ensure compliance with the guidelines for operations of the fund.”
(NAN)

Routine


by Editor

December 1, 2014 | 3:34 pm
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