Respite is expected for Nigeria’s over 17 million micro small and medium scale businesses as President Goodluck Jonathan finally flags off the disbursement of the long-awaited N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) on Monday.
The fund’s official flag off will be commemorated at the Central Bank of Nigeria’s 8th annual Micro, Small and Medium Enterprises (MSMEs) finance conference which begins Monday, in Abuja.
The CBN notes in a mail that the president will also at the two-day event, award prizes to MSMEs, deposit money banks and state governments who had distinguished themselves in entrepreneurship development in 2013.
MSMEDF was launched since last year to primarily provide for the wholesale funding requirements of microfinance banks and microfinance institutions for on-lending to the MSMEs at not more than 9 percent interest rate. The policy stipulates 80:20 prescription for on-lending to micro enterprises and SMEs, respectively, with up to 60 percent (N132.00 billion) of the fund set aside for women to help boost their access to financial services by at least 15 percent annually. Additionally, 2 per cent of the wholesale component of the fund shall go to the economically active persons with disabilities (mental disabilities not inclusive).
The CBN, in July signed a Memorandum of Understanding with states on the disbursements which will allow each of them access up to N2 billion for on-lending to small businesses through the microfinance banks.
CBN governor, Godwin Emefiele, had, however, signaled that the N2 billion could be raised as implementation progresses, even though some state governors are already clamouring that this amount be raised to at least N3.5 billion or N4 billion for each state. “We are starting with N220 billion and I can assure you that once this amount is fully applied we would seize opportunity to increase it,” Emefiele had stated.
As contained in its operating guidelines, the MSMEDF has two major components- the social/developmental objectives/grants and the commercial objectives.
CBN notes that 10 percent or N22 billion of the fund has been earmarked for social and developmental objectives in grants (5% or N11.0 billion; interest drawback programme (3% or N6.60 billion) and managing agent’s operational expenses (2% or N4.4 billion).