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Nairaland Forum / Nairaland / General / Business / CBN Allows New Businesses Borrow From N220bn MSME Fund (14391 Views)
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CBN Allows New Businesses Borrow From N220bn MSME Fund by informationAggo: 12:42am On Dec 24, 2015 |
CBN Governor, Mr Godwin Emefiele The CBN also said that banks and other finance institutions that lends to business start-ups under the fund will be allowed to access the fund at zero interest rate. This was contained in the Revised Micro, Small and Medium Enterprises Development Fund (MSMEDF) Guidelines issued yesterday by the Development Finance department of the CBN. Previously, only existing businesses can borrow from the fund through their banks. The new guidelines however removed this limitation stating, “Participating Financial Institutions (PFIs) are required to fund start-up projects under the MSMEDF. To encourage Deposit Money Banks (DMBs) and Development Finance Institutions (DFIs), some incentives shall apply. “PFIs are expected to accept charge on fixed and floating assets of the financed projects as collateral for start-ups. Collateral requirement from start-ups by PFIs (DMBs and DFIs) shall be educational certificates such as SSCE, National Diploma (ND), National Certificate of Education (NCE), National Business and Technical Examination Board (NABTEB), Higher National Diploma (HND), University degree (NYSC Certificate where applicable) and a guarantor. “The start-ups to access the MSMEDF must present their Bank Verification Number (BVN). Venture Capital Firms (VCFs) that wish to finance start-ups in form of equity participation shall be eligible to access the MSMEDF at 2.0 percent for investment in start-up projects. The collateral for such facility to the VCF shall be bank guarantee. “Incentive shall be offered to PFIs that repay loans as at when due. a) Start-Ups (i) DMBs/DFIs playing in this space, shall access MSMEDF facility at zero percent interest for on-lending at 9.0 percent (all-inclusive) to start-ups. (ii) The PFIs shall qualify for a 50 percent risk shared on the net outstanding balance in the case of default. b) Other Incentives Microfinance Banks with PAR of 10 percent and below shall be exempted from providing financial assets as collateral to access facility under the MSMEDF.” In addition to the above, the CBN also reduced interest rate it charges PFIs accessing the loan from 3.0 percent to 2.0 percent. It stated, “Interest Rates All PFIs shall access funds at an interest rate of 2.0 percent per annum and on lend at 9.0 percent per annum inclusive of all charges. The interest rate chargeable under the MSMEDF may be reviewed by the Central Bank of Nigeria from time to time.” The decision to allow business start-ups borrow from the fund is aimed at boosting graduate employment by encouraging banks to lend to graduates intending to set up businesses. Recall that the CBN Governor, Mr. Godwin Emefiele while addressing the just concluded 7th annual Banker Committee Retreat had announced that the apex bank would soon introduce measures to generate one million graduate employments. He said, “In 2016, the CBN is contemplating a programme that would support SMEs at concessionary pricing to our young graduates. We need to get more people to be employed. The central bank would over the next few weeks work out the initiative to create employment for at least one million graduates in Nigeria in 2016. That would entail the support from Nigerian banks and our development partners.” Source:http://www.aggonreporters.com/2015/12/cbn-allows-new-businesses-borrow-from.html?m=0 12 Likes 5 Shares |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by higherhyte(f): 1:05am On Dec 24, 2015 |
Banks in Nigeria finance start ups?, iffa hia Good design by CBN though. 7 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by joystickextend1(m): 1:41am On Dec 24, 2015 |
Let's wait and see |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by ThundrCork(m): 6:38am On Dec 24, 2015 |
I hope the banks comply 5 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Demmocrats(m): 6:54am On Dec 24, 2015 |
CBN Governor, Mr Godwin Emefiele The CBN also said that banks and other finance institutions that lends to business start-ups under the fund will be allowed to access the fund at zero interest rate. Its a welcomed development coming from the new "Clueless One", It will help fund start ups and even give SME's a breathing ground but for a Maize to grow it doesn't only need sun light, it needs water, fertile ground and modern ways of farming so to provide funds for SME and start ups with out tackling problems in the power sector,High rate of Inflation,High exchange rate, High rate of tax imposed by different local and state governments, transportation cost, etc its good as robbing Peter to pay Paul. This country is heading to the right direction, a direction of been better but it has a potential to be great and i want to see it become great than to settle as been better, we all have to come together and say NO to corruption and work with my Sai Buhari to make this Nation great. Sai Buhari. 40 Likes 3 Shares |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by echelons(m): 6:54am On Dec 24, 2015 |
Good initiative. The problem is that we don't have credible credit rating system in the country and the bank's will never be comfortable lending (or giving Bank Gauranty) to Start ups. If this us strictly monitored and adequately implemented, the SME sector of the economy will be adequately stimulated. Young Entrepreneurs should come together and put together profitable and sustainable ideas that can win them the facilities. I wish we had Emefiele as CBN governor all these while, not this Northern King we had that turned the bank as a political party and propaganda unit. 13 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by veekid(m): 6:54am On Dec 24, 2015 |
Borrow borrow |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by emmabest2000(m): 6:54am On Dec 24, 2015 |
Nigerians should be well prepared these days , To avoid.... 3 Likes
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Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by lampardizik(m): 6:55am On Dec 24, 2015 |
Cbn this Cbn that |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by geesilver(m): 6:55am On Dec 24, 2015 |
Make I rush go borrow before e finish I hope no be dasuki they in charge of the money o 12 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Afrocatalyst: 6:55am On Dec 24, 2015 |
I hope so. |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by princebaby(m): 6:56am On Dec 24, 2015 |
Nah bubu cause am |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Aitee1: 6:56am On Dec 24, 2015 |
Really Time to start my palm kernel oil drilling business then! 1 Like |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by lordsharks(m): 6:56am On Dec 24, 2015 |
Great news 1 Like |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Rawani: 6:57am On Dec 24, 2015 |
This is a welcome catalyst to encourage more Nigerians to explore entrepreneurship while simultaneously minimizing unemployment among young graduates. For a long time, costly capital financing had been the the barrier limiting young budding Nigerian entrepreneurs, aiming to transform their brilliant ideas into valuable products and services, that would exploit our huge market potential. The generous incentives given to PFI's and venture capitalists (angel investors) will hopefully motivate them into positive action. This policy which gives one confidence in the export focus of this new administration, will inject some vibrancy and dynamism into the ailing economy. Well done PMB. 4 Likes 3 Shares |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Nobody: 6:57am On Dec 24, 2015 |
E don happen Click like if you think Godwin Emefiele should be allowed to complete his term as CenBank Gov. God bless PMB and Osinbajo 13 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Icecomrade: 6:58am On Dec 24, 2015 |
This is one the good initiative of the GEJ administration. Whats new here .? The condition given by CBN TO DMB which customers must meet before accessing these funds is quite stringent This present administration should do review if they lack fresh initiative 4 Likes 1 Share |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by lordsharks(m): 6:58am On Dec 24, 2015 |
Pass with ease via my signature |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by tbaba1234: 7:00am On Dec 24, 2015 |
This is good for those with great business ideas but lack funding...What better way to stimulate the economy that to help the small businesses start up. Zero interest loans reduces the burden on start-ups. I hope the process is well managed so that only those with great business plans get the loans. There is no doubt that it will be a competitive process though... |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by AmakaDNBStories(f): 7:00am On Dec 24, 2015 |
Nice |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Nobody: 7:00am On Dec 24, 2015 |
.. end time space booking.. the poster before me is an end time space booker.. end time CBN end time |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by UrbanMystique: 7:00am On Dec 24, 2015 |
How is it gonna be? |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by iteleaye(m): 7:00am On Dec 24, 2015 |
Only God knows how that fund will be appropriated |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by lonelydora: 7:01am On Dec 24, 2015 |
How? Someone please send me phone number of the person in charge. Change is here indeed. 6 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by Mackson01: 7:01am On Dec 24, 2015 |
That is the only way the economy can grow itself. Not the hype & scam of largest economy of Jonathan & iweala 8 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by illuminatic: 7:01am On Dec 24, 2015 |
how much is the maximum one can borrow? |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by simplemach(m): 7:01am On Dec 24, 2015 |
Can i borrow to pay for the hair my girlfriend made this christmas...? 2 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by elujah1(m): 7:01am On Dec 24, 2015 |
we always hear of these programs from the top, when you get to the banks, you hear another story. The requirements will send you off! 2 Likes |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by kingstylo01(m): 7:02am On Dec 24, 2015 |
veekid:make me rich |
Re: CBN Allows New Businesses Borrow From N220bn MSME Fund by UTMOST10(m): 7:02am On Dec 24, 2015 |
Nigeria with the issue of borrowing! Let's change for better for once. God bless Nigeria |
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