The Central Bank of Nigeria (CBN) is to meet operators of Finance Companies (FCs), Microfinance Banks (MfBs) and Designated Non-Financial Businesses and Professions (DNFBPs) tomorrow to finalise the guidelines for the disbursement of the N220 billion Micro, Small and Medium Enterprises Development Fund.
The meeting, the fourth to be held at the CBN headquarters, is meant to rejig the initial disbursement guidelines released by the apex bank after the fund was launched last year.
Stakeholders are expected to finalise the guidelines to enable participating institutions to access the revolving loan.
The stakeholders met last week but could not agree on key issues, such as allowing Deposit Money Banks (DMBs) to have access to the fund, hence tomorrow’s follow-up.
The 80:20 ratio for on-lending to micro enterprises and Small and Medium Enterprises (SMEs) and the request that 60 per cent of the fund, amounting to N132 billion, be earmarked for providing financial services to women-owned businesses, are also being discussed.
The clause that participating financial institutions can only finance agricultural value chain activities, trade and general commerce, cottage industries and artisans, among others, are also on table for review.
The banking watchdog said to ensure that productive sectors of the economy continue to attract more financing necessary for employment creation and diversification of the country’s economic base, a maximum of 10 per cent of the commercial component of the fund would be channelled to trading and commerce. This clause, the source said, is also under review.
CBN Governor, Godwin Emefiele, said at the N220 billion MoU Signing Ceremony between the CBN and participating state governments, that MSMEs are globally recognised as the critical engines of economic growth due to their potential to create jobs, boost production, generate income, and reduce poverty.
Despite this recognition, MSMEs do not have the adequate financing needed to play this pivotal role in its development trajectory.
A joint report by the International Finance Corporation and McKinsey, stated that as at 2010 the financing gap of this critical sub-sector is about N9.6 trillion.
The N220 billion, he said, is meant to address this gap and unlock the potential of the MSMEs as an innovative way of improving their access to finance, shoring up their potentials for job creation, and enabling them reduce poverty within the country.
