Sun. Oct 25th, 2020

Reference Daily News

Nigeria best news source

Women To Receive About 60% Of N220bn SME Fund – CBN

2 min read
558 Views

The Central Bank of Nigeria has revealed that women will receive 60 per cent of the N220bn Micro, Small and Medium Enterprises Development Fund as part of its developmental role and mandate of promoting a sound financial system.

It also said that two per cent of the wholesale component of the fund would go to economically active persons living with disabilities and 10 per cent provided for start-up businesses.

The banks said this in a circular on, “Guidelines for micro, small and medium enterprises development fund for non-interest financial institutions,” which was signed by the Director, Development Finance Department, CBN.

The circular said, “The sub-sector is characterised by huge financing gap which hinders the development of MSMEs.

“Section 6.10 of the Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria, stipulates that ‘a Microfinance Development Fund shall be set up, primarily to provide for the wholesale funding requirements of MFBs/MFIs’.

“To fulfil the provisions of section 4.2 (iv) of the policy, which stipulates that women’s access to financial services to increase by at least 15 per cent annually to eliminate gender disparity, 60 per cent of the Fund has been earmarked for providing financial services to women.”

It added that this informed the decision of the CBN to establish the MSMEDF, which has a take-off seed capital of N220bn.

The fund prescribes 50:50 ratio for on-financing to micro enterprises and SMEs respectively by Participating Financial Institutions.

The commercial component will constitute 90 per cent of the Fund which to be disbursed in the form of wholesale funding to the PFIs.

It added that the objectives of wholesale funding were to provide facilities to eligible PFIs for on-financing to MSMEs; improve the capacity of the PFIs to meet credit needs of MSMEs; and reduce the rate of financing to the PFIs and the beneficiaries.

The developmental component, it added, made up the remaining 10 per cent of the Fund.

The CBN said it would be earmarked for developmental programmes in form of grants.

It added that the 10 per cent grant would be utilised for the general development of the MSME sub-sector in the areas of capacity building, development of appropriate regulatory regime for MSMEs financing, financial literacy and entrepreneurship development.

Others are mobilisation, training and linkage of MSMEs to financial services, research and development of MSMEs-friendly financial innovations and products, business development and advisory services and building of financial infrastructure to support the growth of MSMEs.

Leave a comment

You may have missed

Copy Protected by Chetan's WP-Copyprotect.