CBN unveils non-interest guidelines to stimulate the growth of SME

As part of concerted measures to stimulate the growth of small and medium enterprises in Nigeria,the Central Bank of Nigeria (CBN) has unveiled new guidelines for Non-Interest Financial Institutions under its various programmes.

The CBN made this known in its latest guidelines released on its website on Tuesday.

It said the 10 guidelines also included the Agri-Business, Small and Medium Enterprise Investment Scheme (AGSMEIS) and Micro, Small and Medium Enterprises Development Fund (MSMEDF), Accelerated Agricultural Development Scheme (AADS) and seven other intervention schemes in its bouquet.

The guidelines followed the Bank’s June 2020 meeting where it announced plans to unveil framework to integrate non-interest window in its intervention programmes aimed at supporting businesses and households negatively impacted by COVID-19.

In the AGSMEIS guidelines for the operations of NIFIs issued on Tuesday, the CBN would create a Fund to be known as ‘AGSMEIS Non-Interest Fund’ to be domiciled in a dedicated account with the apex bank.

The bank stated that the guidelines stipulated that each non-interest deposit Bank (full-fledged or window) was to set aside five per cent of its Profit After Tax (PAT) annually as contribution to the Fund.

It added that each non-interest Deposit Bank was also to transfer its contribution to the CBN not later than 10 working days after the Annual General Meeting (AGM) of the participating bank.

According to the CBN, eligible activities under the Scheme are businesses across the agricultural value chain, covering production, inputs supply, storage, processing, logistics and marketing.

Others included MSMEs in the real sector including manufacturing, mining and petrochemicals.

It disclosed that others were MSMEs in the service sector including information and communication technology (ICT) and the creative industry as well as other activities as the CBN may determine from time to time.

According to the guidelines, financing under the Scheme will be for start-ups, business expansion or revival of ailing companies and shall be in compliance with provisions of BOFIA (1991) as amended and the principles underpinning operations of NIFIs.

“The MSMEDF for NIFIs guidelines are aimed to channel low return funds to the MSME sub-sector of the Nigerian economy through participating Financial Institutions (PFIs) to enhance access by MSMEs to financial services.

“Similarly, the non-interest guidelines for the AADS are aimed at engaging a minimum of 370,000 youths in agricultural production across the country between now and 2023, in order to reduce unemployment among the youth in the country.

“While the specific objectives of the MSMEDF for NIFIs are to increase the productivity and output of microenterprises, job creation and engender inclusive growth, those of the AADS are to increase agricultural production towards food security, job creation and economic diversification.

“The non-interest guidelines for the AADS, which is targeted at Nigerian youth between 18 and 35 years, seek to promote interaction among state governments, the CBN and other stakeholders in the agricultural value chain in each state.

“To enhance job creation in the agricultural sector, with focus on two crops where States have comparative advantage,” it stated.

The News Agency of Nigeria (NAN) reports that other non-interest guidelines issued by the CBN were for the Anchor Borrowers’ Programme, the Credit Support for the Health Sector and Intervention in the Textile Sector.

Others were the Real Sector Support Facility (RSSF) revised guidelines (V3); the Real Sector Support Facility (RSSF) among others.

Speaking on the guidelines, CBN Spokesman, Isaac Okorafor, said the non-interest windows had opened more opportunities for eligible beneficiaries to be considered for funding under all the Bank’s initiatives.

About the author

Joseph Chukwuma Oputa

Joseph Chukwuma Oputa is the Managing Editor of Maslow Businessnews and Physicians News publications published by Maslow Business News Publications, Lagos, Nigeria.

Joseph Oputa is a proud Alumnus of the prestigious Nigerian Institute of Journalism, Lagos and Federal Polytechnic, Bida, Niger State.

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