The federal government, as a way of growing the nation’s economy, had set aside almost N1 trillion as intervention funds for businesses across all sectors of the economy.
However, the Central Bank of Nigeria (CBN), has accused commercial banks of sabotaging the objectives of the respective intervention funds by not allowing their customers access to the funds.
Although the apex bank had set up several intervention funds for small businesses, particularly in the agricultural sector, asides the intervention funds for the power, aviation and movie industries, operators in these sectors have continued to complain that they cannot access these funds.
The affected intervention funds include the Agricultural Credit Guarantee Scheme Fund (ACGSF); Commercial
Agriculture Credit Scheme (CACS) Real Sector Support Facility (RSSF); Small and Medium Enterprises Credit Guarantee Scheme (SMECGS); Power and Aviation Intervention Fund (PAIF); Micro, Small and Medium Enterprises Development Fund (MSMEDF); Nigeria Electricity Market Stabilisation Facility (NEMSF); and the Anchor Borrowers Programme (APB).
The worst hit is the N220 billion MSMEDF which is in its third year, yet less than 50 per cent has so far been disbursed. Launched in August 2013, the N220 billion MSMEDF, which has a single-digit interest rate, is designed to provide wholesale facilities, refinancing and guarantee to Micro, Small and Medium Enterprises (MSMEs).
The fund, 60 per cent of which is devoted to female entrepreneurs, was designed to provide liquidity support to microfinance banks/microfinance institutions for on-lending to MSMEs. The apex bank disclosed that as at February this year, it had disbursed over N814.945 billion through eight of its intervention funds.
Also, the CBN had, in June this year, disbursed the fourth batch of the Nigeria Electricity Market Stabilisation Fund (CBN-NEMSF), giving out N55.456 billion (out of the N213 billion set aside for it) to 24 industry participants: three electricity Distribution Companies (DISCOs), 14 electricity Generation Companies (GENCOs)- NIPP inclusive, one service provider, and six gas companies to further address the challenges of the sector.
In promoting agriculture and agriculture value-chain, a sector which contributes a substantial portion of the GDP, the CBN launched the N200 billion Commercial Agriculture Credit Scheme (CACS) which focuses on the financing of large ticket projects along the agricultural value chain. The scheme is administered at 9.0 per cent interest rate to beneficiaries for a seven-year period, beginning in 2009.
Another of such intervention funds is the N200 billion SME Restructuring and Refinancing Facility (RRF), which was established to re-finance and restructure banks’ existing loan portfolios to manufacturers at 7.0 per cent interest rate per annum. There is also the N300 billion Power and Airlines Intervention Fund (PAIF) which was to be administered at 7.0 per cent interest rate per annum.
CBN’s deputy director, Monetary Policy, Dr Ngozi Egbuna, said only a handful of commercial banks in the country had been instrumental in disbursing the intervention funds
Specifically, she said First Bank, Union Bank, Heritage Bank and a few others have been the ones disbursing the intervention funds dutifully.
She noted that banks are not encouraging their customers to access the intervention funds for selfish gains as they would rather give out high interest loans than the low interest intervention funds.
Egbuna explained that asides the fact that banks are reluctant to disburse the intervention funds, many do not have well trained staff who can effectively appraise small businesses.
The deputy director cited an instance of a bank official who wore stilettos on a field trip and ended a trawling business because she felt the ship looked rusty.
She, consequently, urged customers to write to the customer protection desk of the CBN in any event where they are denied access to the intervention funds.
LEADERSHIP reports that the CBN, in partnership with Heritage Bank, had last week, disbursed N774 million to 310 young entrepreneurs under the Youth Innovative Entrepreneurship Development Programme (YIEDP).
The CBN-YIEDP fund which was launched last year is a N3 billion fund with a three-year tenor at nine per cent interest rate, set aside by the CBN for serving National Youth Service Corps (NYSC) members and ex-NYSC members who concluded their service year by 2010, with an individual beneficiary entitled to a maximum of N3 million.
Source: LEADERSHIP
