States can access up to about N2billion from the fund.
The Central Bank of Nigeria, CBN, says Micro, Small and Medium Enterprises MSMEs have the potentials to boost production, create jobs, reduce poverty and ensure inclusive economic growth and development in the country if adequately funded.
The CBN governor, Godwin Emefiele, said this at the signing of Memorandum of Understanding, MoU with the 36 State governments on “MSMEs Development Fund’’ in Abuja on Thursday.
Mr. Emefiele said that in spite of global recognition, MSMEs in Nigeria had not received adequate financing required to play their pivotal roles in national development.
He said a joint report by the International Financing Corporation, IFC, and McKinsey indicated that financing gap of the critical sector of the Nigerian economy was N9.6 trillion as at 2010.
The governor said the CBN initiated the funds as an innovative way of improving access to finances at single digit interest rates by MSMEs in order to unlock their potentials and unleash them for growth.
He said the state governments would be able to access up to N2 billion each for on-lending to eligible beneficiaries through participating financial institutions in their states.
The CBN, Mr. Emefiele assured, would ensure that the funds got to people at the bottom of the country’s economic and social pyramid at a maximum of nine per cent interest rate.
He also said 60 per cent of the funds would be given to women, who often turn out better yields than their men counterparts.
According to him, the CBN would be committing considerable human and material resources to monitoring the disbursement and utilisation of the funds in a robust and verifiable manner.
“Participating financial institutions will be required to submit periodic returns on disbursement as well as analysis of the social impact of these funds on our people’’, he said.
He implored the state governors to assist the CBN to achieve its goals by ensuring that the funds were deployed in an efficient manner to beneficiaries.
Akwa Ibom State governor, Godswill Akpabio, who spoke on behalf of the other governors, commended the CBN for initiating policies that bordered on poverty reduction in the country.
Mr. Akpabio, however, stated that the N220 billion set aside for the initiative was relatively small, considering the size of the country, the rate of unemployment and its economic potentials.
He urged the CBN to review the procedures involved in the disbursement of the fund to enable it get to the targeted population without difficulties.
Oyo State Governor, Abiola Ajimobi, on his part urged the CBN to carry out needs assessment of the states to establish their real needs, adding that the number of MSMEs varied from state to state.
Mr. Ajimobi said there was need to disburse the funds according to the size and needs of the MSMEs in various states of the federation.
For Emmanuel Uduaghan of Delta State, the funds should be channelled through the states owned microfinance banks to allow easy access by the people.
Mr. Uduaghan said if microfinance banks were encouraged to handle the funds, more jobs would be created at the grassroots and more people involved in economic activities at the local level.
Governor Rauf Aregbesola of Osun State said the best way to address the country’s economic challenges was by empowering the MSMEs and creating opportunities for the youths.
The governor stated that if about 50 million youths in the country were involved in economic activities, the country’s earning would be increased.