CBN plans soft loans for one million graduates


The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, on Thursday announced that a low-interest loan scheme for one million young graduates would commence next year.


The governor said the special loan scheme, which would be managed by the central bank in collaboration with commercial banks, was part of the strategy of the Federal Government to boost the Micro, Small and Medium Enterprises sub-sector and curtail unemployment among the youth.


Emefiele made the disclosure in Lagos during the opening ceremony of the seventh Annual Bankers’ Committee Retreat.

The CBN governor said, “We need to get more and more people to be employed, and we will need the support of the banks to begin to see how we lower our risk acceptance criteria to give support to our young graduates.


“In the course of the next few weeks, we will be unfolding a plan of support of the CBN to create employment for at least one million young graduates in Nigeria in 2016. That will entail support from Nigerian banks and our development institutions to see how we will channel these concessionary loans to companies that are MSMEs.”

According to the CBN boss, the MSMEs represent the engine room of growth of any economy and there is a need for Nigeria to focus on the sector in order to weather the trying times.


He said, “The drop in commodity prices is a major thing that has affected the country. What that means is that your revenue has dropped and we are facing very serious pressure on our external reserves and exchange rate. What that does is that we all need to think about how we should come together and see what we can do as a people to shield ourselves from what is happening. So, we need to do whatever we can to protect the economy.


“We are entering a phase where we believe that the SMEs must be the only priority for growth in our economy. I must say that the Nigerian banking sector has not played an active part in supporting the SMEs, but this is not without reasons. We had issues in the past where people took loans and didn’t pay.


“The SMEs are seen as drivers of growth in any economy. The CBN has a N220bn MSME facility. We have used various approaches to stimulate lending to the SMEs through that fund and I must confess that we are not doing enough on that because less than half of that fund has been disbursed today.”


Emefiele urged the bank MDs and heads of financial institutions at the meeting not to shy away from lending to the real sector, adding that the proposed loan scheme for young graduates must work.


He said, “Let’s give the young graduates a chance. The SME programme is going to be separate from the N220bn MSME fund, and I am saying if you (the banks) refuse to support, your money that we would have released through the Cash Reserve Ratio, we will take that money and lend it through any channel that will give these young graduates jobs.


“We all need to think together and agree because there is no need to release the money to you and all you do with the money is buy treasury bills. It can’t continue. We need to think about the best ways to diversify this economy away from oil.”


Meanwhile, the Minister of Finance, Mrs. Kemi Adeosun, who was also present at the opening of the retreat, disclosed that the Federal Government would be borrowing to stimulate the economy.


She said Nigeria was facing a very challenging economic situation and there was a need to focus on the SME sector to boost growth.


According to her, the government will be doing all that needs to be done on the fiscal side of the economy to ensure that the money that will be borrowed is not spent on recurrent expenditure but on capital projects.

On the 20 Jul 2012, The Federal Government released a new nationwide survey on the Small and Medium Enterprises (SMEs) sector in the country.

The survey revealed that 99 per cent of organisations that fall under the category were actually micro enterprises employing less than 10 persons.


Minister of Trade and Investment, Mr. Olusegun Aganga, who unveiled the findings of the survey at the first national SMEs retreat in Lagos, said government was surprised to find that nearly all the businesses operating in the country under the SMEs umbrella were in fact, micro enterprises, stressing that this finding should have influence the way policies driving the sector are crafted from the beginning.


The survey, which was conducted by the Federal Bureau of Statistics (FBS) across the 36 states of the federation and the Federal Capital Territory (FCT) and it showed that there were a total of 17.28 million SMEs in the country out of which 17.26 million are micro enterprises valued at less than N5 million.

This means that micro enterprises represent about 99 per cent of MSMEs in the country

Aganga said the survey also showed that only three per cent of the SMEs in Nigeria were accessing export market, a situation, which he said was adversely inimical to the development of the nation’s economy.

Aganga recommended that if we must do better, then we must improve the ability of Nigeria’s MSMEs to compete effectively in local, regional and global markets.”

The targets they must deliver are maximum benefits of employment generation, wealth creation, poverty reduction and growth to the Nigerian economy

There should also be general parameters, benchmarks and directions within which MSMEs’ programmes, interventions and initiatives will be designed, implemented, monitored and evaluated.

But where and how can they get their seed money?

Statistician-General of the NBS, Dr. Yemi Kale, showed that “an estimate of 83.2 per cent of the enterprises have initial start-up capital of below N10 million, while seven per cent of the enterprises have initial start-up capital of between N10 million and N20 million,” adding that the main source of capital is personal savings, with 54.4 per cent; followed by loan (22.0 per cent); and family source of capital (16.7 per cent).

“The source of capital of most micro enterprises are personal savings, which represents 84.6 per cent; family source (29.8 per cent), loans (9.2 per cent)

Government’s priority target areas for SMEs, according to the former minister, are Micro Cottage Food Processing Enterprises, Cottage Arts And Crafts, Mining, Textiles and Clothing, Leather and Leather Products, Basic Metal, Metal Fabrication and Engineering Enterprises.



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