22 March 2015, Lagos – The Central Bank of Nigeria, CBN, has put the total amount disbursed under the N220 billion micro, small and medium enterprises development and, MSMEDF, to beneficiaries at N40.3 billion.
This was revealed on Wednesday at a workshop organised by the CBN and the bankers’ committee in Lagos.
Head, Relationship Management, CBN, Abuja, Mr. Tobin Jonathan said the workshop was organised for SME officers of commercial banks because of the need to create more awareness on the fund.
“As we speak, N40.3 billion has been disbursed to state governments, commercial banks, micro FINANCE banks and financial cooperatives,” he said.
“We have disbursed to 19 states. Some of them took up to N1 billion and N2 billion and we have disbursed to the federal capital Territory and also many micro FINANCE banks,” he said.
He further explained that since 2014 when the fund was introduced, only N814 million had been assessed by commercial banks, which according to him was not good enough for just 21 projects.
He also pointed out the central bank was also looking at other participating financial institutions (PFIs), micro finance companies, among others, to help facilitate access to funds by entrepreneurs and collaborations so as to see that funds get’s out of CBN for people to use it to do business.
“In fact, micro finance banks have received about N2 billion so far, commercial banks, N814 million, micro finance institutions, N100 million and we are still processing and we believe that soon, the effect of this fund will be felt in the economy, “he said.
On reasons for relaxing collateral conditions for the fund, he explained: “PFI’s said that the collateral for the fund was an issue. Initially, it was 25 per cent for whatever they want to borrow and so, the Governor magnanimously reduced it to 15 per cent and this seems an improvement in the application level.
“Secondly, PFI claimed that the three per cent the collect from CBN is not too comfortable to cover cost of operation and again reduced it to 2 per cent so they receive fund at 2 per cent and give it out at 9 per cent and they have 7per cent spread, which is good enough to encourage a number of them to start applying”.
At the launch of the fund, the CBN had stated that it was designed to further enhance access to finance by MSMEs with the following major objectives: (i) provide wholesale financing windows for participating financial institutions (PFIs), (ii) improve the capacity of the PFIs to meet credit needs of MSMEs (iii) provide funds at reduced cost to PFIs, (iv) enhance access of women entrepreneurs to finance by allocating 60 per cent of the fund to them, and (v) improve access of NGOs/MFIs to finance.
*Chinazor Megbolu – Thisday