Fastest Ways to Access New CBN’s Agricultural Fund
The Central Bank of Nigeria (CBN) has released guidelines for interest-free financial institutions as part of its agribusiness, small and medium-sized enterprise (AGSMEIS) and Micro Development Fund program, small and medium enterprises (MSMEDF).
This was released on Tuesday by the central bank via its website. The guidelines also included the accelerated agricultural development scheme (AADS) and seven other intervention schemes in its bouquet.
How AGSMEIS Works
* The CBN would create a fund called “AGSMEIS Non-Interest Fund” which will be domiciled in a dedicated account with the apex bank.
* Each interest-free deposit bank (full or window) had to set aside 5% of its after-tax profit (PAT) each year as a contribution to the Fund.
* Each interest-free deposit bank also had to transfer its contribution to the CBN no later than 10 working days after the annual general meeting (AGM) of the participating bank.
* The activities eligible under the program are enterprises in the agricultural value chain, covering production, supply of inputs, storage, processing, logistics and marketing.
* Others included MSMEs in the real sector, including manufacturing, ICT, mining, petrochemical and creative industries, as well as other activities that CBN may determine from time to time.
How to Access the Fund
The application of the Fund is classified into three main components. These are debt, equity and development components.
The debt component will constitute 50% of the fund, which will be disbursed in the form of financing to eligible companies through interest-free deposit banks.
* Assets purchased must be registered with the National Collateral Registry (NCR).
* Funding limit: 10,000,000 N
* Increase: 5% per year
* Tenor: up to 7 years (depending on the nature / gestation period of the
* Moratorium: 18 months maximum for the principal and 6 months for the increase.
* Application form duly completed.
* Bank verification number (BVN).
* Training certificate issued by a recognized entrepreneurship development institution (EDI) or proof of membership in an organized association in the private sector.
* Letter of introduction from one of the following members: member of the clergy, village chief, district chief, traditional chief, high official, etc. (for individuals, micro-enterprises only).
* Proof of the registration of the company name or the certificate of incorporation and the filing of annual reports (if applicable) in accordance with the provisions of the Companies and Related Matters Act (1990).
Last month, the CBN announced that it has unveiled a framework that will integrate an uninteresting window into all of its intervention programs aimed at supporting businesses and households that have been negatively affected by the COVID-19 pandemic.
In a statement, the apex bank said the integration will focus primarily on its borrower anchor program (ABP) as well as the targeted credit facility (TCF).
Why this is important: The program will be aimed at start-ups, business development or the revival of companies in difficulty and will be in accordance with the provisions of BOFIA (1991) as amended and the principles underlying tend the operations of IFNIs.
“MSMEDF guidelines for IFNIs aim to channel low-yield funds to the MSME subsector of the Nigerian economy through participating financial institutions (PFIs) to improve MSME access to services financial.
“Likewise, the AADS no-interest guidelines aim to engage a minimum of 370,000 young people in agricultural production across the country by 2023, in order to reduce unemployment among young people in the country”, – he added.
While the specific objectives of the MSMEDF for NIFIs are to increase the productivity and production of microenterprises, job creation and generate inclusive growth, those of AADS are to increase agricultural production towards food security , job creation and economic diversification.
* It is aimed at young Nigerians between 18 and 35 years old, seeks to promote interaction between state governments, CBN and other stakeholders in the agricultural value chain in each state.
* Improve job creation in the agricultural sector, focusing on two cultures where states have a comparative advantage.
* Others were revised guidelines from the Raised Sector Support Facility