Central Bank of Nigeria has disbursed a total of N40.3 billion out of N220 billion intervention funds of the Micro, Small and Medium Enterprises Development Fund (MSMED).
Head, Relationship Management MSMED Fund, Development Finance Department, CBN, Tobin Jonathan, disclosed this in Lagos at a workshop organized by the Sub-Committee on economic development, sustainability and gender of the Bankers’ Committee on the MSMED fund.
He said that the rate of assessment of the fund since it was launch last year by President Goodluck Jonathan was not good enough, adding that only N814 million has been accessed by commercial banks for only 21 projects. Giving analysis on the level of disbursement, he said “so far Microfinance Banks (MFBs) have received N2 billion and commercial banks N814 million and Finance institutions N100 million. We have some applications we are processing. It is an ongoing process. We believe very soon the effect of this will begin to be seen in the economy.”
He said that to ensure that financial institutions participated in the disbursing of the funds the Governor of the CBN has magnanimously reduced the collateral required for accessing the fund from 75 percent to 50 per cent. Jonathan also explained that three per cent at which banks access the fund from CBN to enable it lend to SMEs has been cut down to two per cent.
He however said that with the reduction on collateral requirement and interest rate for accessing the funds by banks, they have seen some improvement in the level of application as a lot of them have started applying now.
He explained that the essence of the workshop was to encourage banks to look for SMEs for them to collect the funds to increase productivity.
Speaking further he said “the CBN governor has a target that by the end of 2015 half of the fund will be out to the economy for doing business in the economy. We are looking at the productive sector of the economy, the manufacturing, entire agricultural value chain, services, these are areas of emphasis that is where we want to generate employment, production within the economy so that SMEs will begin to produce goods for export and then we begin to earn foreign exchange.
” He said that based on the CBN criteria all MFBs are eligible to apply for the funds, stressing that with the review of the guideline in February this year over 30 applications have been received from MFBs. He said that those applications are being processed by CBN to enable it release fund to them by the day.