CBN, banks differ on payout of N30b for young entrepreneurs

Lack of synergy between the Central Bank of Nigeria (CBN) and other banks has stalled disbursement of the seed funds for start-ups.

In its bid to reduce dependence on white-collar jobs, government in 2014, approved a seed fund of N30 billion to be accessed by young school leavers with sound business plans.

But two years down the line, there is yet to be any strong indication that the funds have been reasonably disbursed to supposed beneficiaries, though  officials cite some bottle necks for the delay.

By the programme, to access the scheme, a potential young entrepreneur is to receive between N3 million to N10 million, depending on the weight of his business proposal, and is to start refunding after two years.

Aimed at fighting high rate of unemployment in the country, it is designed such that each entrepreneur will be able to employ a minimum of five workers.

As at last check, CBN, commercial banks and community banks officials were blaming one another over the delay in effective take-off of the programme, which from all projections should have gone half way to full execution by the end of the year.

CBN said the programme is still awaiting prospective applicants that have been endorsed by mainly community or other banks before qualifying for the loan.

Read also: CBN directs banks to extend dollar loans

The loan, almost interest-free at about 5 per cent, will have some incentives to ensure success in use.

But most banks approached said they were yet to be given proper guidelines on how to process applications without paying the price of failure by applicants.

“All banks are strictly for business, so it is not possible for a young school leaver to just walk up to a bank, without collateral, and expect to be endorsed for a loan from any quarters, including from the government,” said Mr. Gideon Achua, of ABC Microfinnace.

He insisted that for such an applicant to convince the bank for endorsement, his business plan must have been handled by a professional, adding that all of that are not provided for by the terms handed down for the endorsement of the fund by CBN.

But a spokesman of CBN said there were series of workshop on the programme involving all stakeholders, where the details were spelt out.

Some of the prospective young entrepreneurs interviewed claimed not being fully informed of the development, while some said they had already fallen victims of con men.

“I was contacted by email to forward my loan application with some payment, thinking it was really CBN portal, I did and in the process, I lost N25, 000 to fraudsters,” lamented Ms Mary Uche.

Others said there are some stringent conditions by CAC before a company could be registered including tax clearance of two years, which a young venture without profit can ill afford.

Still, CBN said some successful applicants have been given the loan and are being monitored through the banks that endorsed them.

 

 

 

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