The Central Bank of Nigeria said its N220 billion Micro, Small and Medium Enterprise (MSMEs) Fund will help participating financial institutions to support entrepreneurs.
The Director of Public Finance, Mr Paul Eluhaiwe, who said this in Abuja, noted that the fund had several components.
“The fund has the loan, guarantee, refinancing and grant components. The grant component enables us to provide capacity building for microfinance banks to strengthen them. The refinancing is where they have given out so many facilities to their clients, it will enable them to come back for refinancing at a particular discounted rate.
“This will enable them to plough back into business,’’ he said.
Eluhaiwe said that the guarantee component would enable them to obtain more credit facilities outside what the CBN offered, especially from commercial banks.
“The fund provides them the guarantee to be able to borrow more money from the outreach to their clients,’’ he added.
Eluhaiwe said that microfinance banks and non-bank micro finance institutions were qualified to access the funds. He listed the non-bank micro finance institution to include non-governmental organisations that were providing financial services and cooperative societies, among others. The guideline on the MSMEs said that participating financial institutions must satisfy conditions of CBN and NDIC.
It listed the conditions to include compliance with the prevailing prudential ratios and average deposit growth rate of 20 per cent per annum for institutions operating for over two years. It said that the participating institutions must be registered with corporate Affairs commission, have corporate profile acceptable to the managing agents, have evidence of risk management framework and sound corporate governance acceptable to the managing agent.