The Central Bank of Nigeria (CBN) has signed a Memorandum of Understanding (MoU) with about 11 state governments to enable the states access the N2 billion available to them under the N220billion Micro Small and Medium Enterprise (MSMEs) Development Fund.
CBN governor, Godwin Emefiele, in his remark during the signing ceremony, yesterday in Abuja, explained that the MoU was to facilitate the states’ access and disbursement of the N2 billion available to each state of the federation under the scheme.
The governors of Akwa Ibom, Delta, Osun and Oyo States were present in person to sign the MoU, while the governors of Bayelsa, Bornu, Gombe, Enugu, Zamfara, Ondo and Benue were represented.
Each of the state governments would be able to access up to N2 billion each for on lending to beneficiaries through participating financial institutions in their states.
Emefiele further explained that the main intermediate objective of the apex bank was to ensure that the funds got to the people at the very bottom of the Nigeria’s economic and social pyramids at single digit interest rate.
He pointed out that though MSMEs are recognised globally as the critical engines of economic growth, due to their potential to create jobs, boost production, generate income and reduce poverty, the MSMEs in Nigeria have never received the adequate financing needed to play this pivotal role in the country’s development trajectory, a situation which resulted in a financing of gap of N9.6 trillion as at 2010, as revealed by a joint report by the International Finance Corporation (IFC) and McKinsey.
“In order to bridge this gap and unlock the economic potential of the sector, the CBN initiated the N220billion Fund as an innovative way of improving the access to finance at single digit interest rate shoring up their potential for job creation and enabling them to reduce poverty within the country,” he said.
Commenting on the development, Governor Godswill Akpabio of Akwa Ibom State, while commending the CBN for the initiative urged the apex bank to ensure that the process of accessing the fund was made very simple to enable the beneficiaries to have access to the fund.