As MSMEDF, YEDP, AGSMEIS, others gather momentum

By Emeka Anaeto, Business Editor

One of the major concerns in the development finance programme of the Central Bank of Nigeria, CBN, has been the inflationary impact of the huge funding operations.

But recent developments in the consumer price index appear to have assuaged this fear. The July 2021 report of the Nigerian Bureau of Statistics, NBS, has indicated a fourth consecutive month of deceleration in the country’s inflation rate, indicating that this major macroeconomic index has stabilised in the positive trajectory after several month-on-month upward trend.

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Most economy analysts are in agreement that with this development the CBN’s expansionary development finance programme has turned a win-win for all elements of the macroeconomic profile of the country.

Basically the programme was targeted at stimulating the economy which was forced into recession by the impact of the COVID-19 Pandemic in the first quarter of 2020. The apex bank had rolled out a battery of intervention funding for several sectors of the economy estimated at about N1.1 trillion.

Some of the programmes include Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Youth Entrepreneurship Development Programme ((YEDP), the Agri-Business Small and Medium Enterprise Investment Scheme (AGSMEIS) among others.

The gains of the MSMEDF driven by the CBN, in pursuance of its development financing function under its overall macroeconomic growth support strategy, are already being counted as part of the post COVID-19 economic performance scorecard of the Federal Government.

Figures available to Vanguard Public Finance Report showed that as at first quarter of this year 447,671 beneficiaries had been supported under the apex bank’s targeted credit facility across the country, with 58,229 businesses and 389,442 households affected by COVID-19 pandemic stimulated job retention across the real sector.

In the MSMEDF segment of its intervention, CBN financed 488 micro, small and medium enterprises, MSMEs, projects nationwide, comprising 120 state projects and 368 private sector projects in agriculture, manufacturing, services, renewable energy and trading with 216,706 direct and indirect jobs created across the country.

There were also 55,422 budding entrepreneurs trained under the Entrepreneurship Development Centres established under the intervention.

The data presented by the CBN’s director in charge of development finance, Philip Yila Yusuf, show that 28,961 agribusiness and artisanal projects were financed across the country, while 107,932 direct and indirect jobs were created under its Agribusiness Small and Medium Enterprises Investment Scheme (AgSMEIS).

Yusuf said CBN has financed 395 youth-owned projects in various sectors of the economy in line with its resolve to support entrepreneurial aspirations of youth MSMEs.

According to the CBN, the objective of the Fund is to channel low cost funds to the MSME sub-sector of the Nigerian economy through Participating Financial Institutions (PFIs) to enhance access by MSMEs to financial services; Increase productivity and output of microenterprises; Create jobs; and Engender inclusive growth.

The eligible enterprises under the Fund include: enterprises in the agric value chain, cottage industries, artisans, services, renewable energy/energy efficient product and technologies, as well as trade and general commerce.

Commenting on the efficacy of the initiatives so far in addressing the challenges of small businesses and their contribution to economic growth, Chairman, Nigeria Association of Small and Medium Enterprises, Abuja, Abiodun Ihebuzor,  says the initiative is laudable.

He stated: “It is actually a timely intervention looking at the effects of Covid-19 on SMEs. It has provided a high-level succour, this is a facility that comes to small business owners at less than 9 percent, precisely 5 percent but when you add up other charges in terms of processing and management fee it still sits at below one digit of 9 percent.”

In recognition of access to finance as a key limiting factor to innovation and development of the global economy in Nigeria, the CBN introduced several developmental finance programmes and schemes to facilitate the attainment of its economic development mandate.

In addition to the MSMEDF, the YEDP and the AGSMEIS, the apex bank also introduced the Creative Industry Financing Initiative (CIFI), Targeted Credit Facility (TCF), and the Nigeria Youth Investment Fund (NYIF).

The CIFI  intervention scheme has fostered CBN’s efforts in increasing access to finance by operators and professionals in the nation’s creative industry.

In addition to improving access to low-cost and sustainable financing and boosting job creation,  other objectives of the CIFI include harnessing the entrepreneurial potentials of the youths within the Nigerian creative and IT sub-sectors for economic development, and complementing other development finance initiatives of the CBN to accelerate financial inclusion.

As part of its response to the COVID-19 pandemic, the CBN has released N253 billion to 548,345 recipients in its Targeted Credit Facility (TCF) as at first quarter of this year. The beneficiaries included 470,969 families and 77,376 SME’s affected by the COVID-19 economic shocks.

As part of its drive to improve access to finance for youth and youth-owned enterprises for national development; generate the much needed employment opportunities to curb youth restiveness; boost the managerial capacity of the youth and develop their potentials to become future large corporate organizations, the CBN launched the Nigeria Youth Investment Fund, NYIF. The NYIF has begun to financially empower Nigeria youth to generate at least 500,000 jobs between 2020 and 2023. The NYIF is funded with an initial take-off seed capital of N12.5 billion.

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