Stories by Kayode Tokede
Guaranty Trust Bank Plc, Zenith Bank Plc and two other banks contributed N15.8 billion to Central Bank of Nigeria (CBN) Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS).
The other two banks are Access Bank Plc and Sterling Bank Plc.
The four totally reported N418.9 billion profit for the period ended December 31, 2017.
The investment scheme aimed at supporting the federal government’s effort at promoting agriculture businesses as well as Small and Medium Enterprises.
It is an initiative of the Bankers’ Committee in which Banks are required to set aside five per cent of their Profit After Tax for investment in qualified players.
The fund is domiciled with the apex bank.
Specifically, GTBank with second highest profit in 2017 after Zenith Bank contributed N6.3 billion out of N170.5 billion profit after tax reported in 2017.
Zenith Bank with N177.9 billion profit in 2017 deposited N5.69 billion for the investment in AGSMEIS while Access Bank contributed N3.2 billion out of N61.99 billion profit reported in 2017.
Sterling bank, with N8.5 billion profit in 2017 contributed N259 million to the AGSMEIS.
The Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee early in the month commenced disbursement of N26 billion AGSMEIS fund to the first set of beneficiaries.
The Governor of CBN, Mr. Godwin Emefiele had said that the main purpose was to improve access to affordable funding for Micro, Small and Medium Enterprises (MSMEs), particularly those operating in the informal sector of the economy.
He recalled that as commitment to the successful implementation of the scheme, all Money Deposit Banks (DMBs) voluntarily agreed to contribute five per cent of their Proût After Tax annually.
He said Banks contribution was to be used to fund eligible projects under the scheme.
Emefiele had commended the commitment of the DMBs to support the scheme, adding that by the end of next year, the disbursement rate of the fund would have risen to N60 billion.
He also said the fund would be disbursed to youths, who had been trained various entrepreneurship, vocational and management skills across the country by Entrepreneurship Development Institutions and Centres.
According to him, the centres are the Fate Foundation, Lagos Business School, House of Tara and Thrive Agric.
He said unlike other intervention scheme where the funds were disbursed in cash, beneficiaries under the agribusiness programme would be given equipment that were commensurate to the required amount based on their trade areas. “In Nigeria, the challenges of youth unemployment and restiveness must be confronted with strategic innovative thinking to provide sustainable solution.
“No matter how daunting the challenge may seem, I believe that with unity of purpose, we can fight this scourge together.
“There is no gainsaying the fact that one of the most effective ways to tackle this scourge, is through entrepreneurship development and easy access to affordable funding.
“Yet, access to funds has been an Achilles heel on entrepreneurship development in the country today. “A situation often credited to ûnancial intermediaries’ apathy to youth entrepreneurship and startups, which are usually perceived as being too risky, lacking relevant managerial skills and not possessing,’’ he said.
Emefiele said that the AGSMEIS scheme would be implemented under three broad components, direct, indirect and developmente components.
Under the direct component of the AGSMEIS, the CBN governor said beneûciaries could access loans to a limit of N10 million at an interest rate of five per cent per annum and a maximum tenor of up to seven years. In addition, he said that there was also a moratorium period of 18 months on principal and six months on interest element, depending on the nature of the business.
Under the indirect component of the scheme, the CBN governor said beneûciaries could access equity and quasi-equity investments of up to ten years with an initial lock up period of three years before divestment. He explained that the developmental component of the scheme would be used for capacity building and technical assistance to support beneûciaries. Emefiele said also that the apex bank would step up its developmental objectives so as to reduce the level of unemployment and create wealth that would support the growth and development of the economy.