Women To Get 60% of N220bn SME fund – CBN
The Central Bank of Nigeria has said that women will be given 60 percent 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 stated that two percent of the wholesale component of the fund would go to economically active disabled persons and 10 per cent provided for start-up businesses.
This was said in a circular released by the banks 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 a 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 a 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 percent of the Fund.
Adding that the 10 percent 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.
Source: https://punchng.com/women-to-get-60-of-n220bn-sme-fund-cbn/
