Micro, Small and Medium Enterprises Development Fund (MSMEDF) was launched by Central Bank of Nigeria (CBN) on August 15,
2013, the funds totaling N220 billion is designed to be accessed directly from Participating
Financial Institutions (PFIs) by MSMEs. The Fund prescribes 50:50 ratio for
on-lending to micro enterprises and SMEs respectively by PFIs. In addition, 2%
of the wholesale component of the Fund shall go to economically active persons
living with disabilities (PLWD) and 10% provided for start-up businesses. The
broad objective of the fund is to channel low interest funds to the MSME
sub-sector of the Nigerian economy through Participating Financial Institutions
(PFIs) to: Enhance access by MSMEs to financial services; Increase productivity
and output of microenterprises; Create jobs and Engender inclusive growth.
The PFIs through which MSMEs will access
the fund include; all Microfinance Banks, Non-Governmental
Organizations-Microfinance Institutions (NGO-MFIs), Financial Cooperatives
Finance Companies, Development Finance Institutions (DFIs) and Deposit Money
Banks (DMBs). The Bank of Industry (BOI) and Deposit Money Banks (DMBs) shall participate
only under the SMEs window.
Micro enterprises shall have a maximum loan
tenor of one (1) year while SMEs shall have loan tenor from one (1) to five (5)
years while moratorium will be negotiated. Principal and interest repayment for
MSMEs loan shall be annually. The interest rate will be 9% per annum.
According to Development Finance
Department of CBN, “Collateral requirement from start-ups by PFIs (DMBs and
DFIs) shall be educational certificates such as SSCE, National Diploma (ND), National
Certificate of Education (NCE), National Business and Technical Examination
Board (NABTEB), Higher National Diploma (HND), University degree (NYSC
Certificate where applicable) and a guarantor. The start-ups to access the
MSMEDF must present their Bank Verification Number (BVN)”.
The structure and limits of loans that
can be borrowed from PFIs are shown below;
|
Enterprise
|
%
|
Maximum
Loan Limit (
|
|
Micro
|
50
|
500,000
|
|
SMEs
(financed by NFBs & FCs)
|
50
|
5,000,000
|
|
SMEs
(financed by DMBs & DFIs)
|
50
|
50,000,000
|
Eligible
Enterprises
The following are eligible activities
under the Fund:
Microenterprises
·
Agricultural
value chain
·
Cottage
Industries
·
Artisans
·
Services
·
Renewable
energy/energy efficient product and technologies
·
Trade
and general commerce
·
Other
economic activities as may be prescribed by the CBN
Note: Nigerian Agricultural Insurance
Corporation (NAIC) Insurance is compulsory for primary agricultural production.
Small
& Medium Enterprises (SMEs)
·
Manufacturing
·
Agricultural
value chain activities
·
Services
·
Renewable
energy, energy efficient product and
·
Technologies
·
Other
economic activities as may be prescribed by the CBN
Equally, Special schemes or programmes
on economic empowerment and grassroots development shall be eligible to access
the Fund through PFIs.
It is important that borrower utilize
the funds for the purpose for which it is granted, adhere strictly to terms and
conditions of the fund and make record available for inspection.
Forward your complaint against Financial
Institutions to cpd@cbn.gov.ng
Leave your comments and complaints below!!!