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Tackling terrorism, unemployment with CBN entrepreneurship programme

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From Uche Usim, Abuja

For a country battling home-grown terrorism, high poverty rate, ballooning unemployment figures and other social blights, experts say the challenges must first be addressed from the economic front and not only military interventions.

They insist that tackling hunger and social service deficits will go a very long way to reduce insurgency, banditry, kidnapping, cultism and other crimes that spring from poverty and unemployment.

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From available statistics, over 600,000 graduates, on a yearly basis, flood the saturated unemployment market with various educational certificates but zero entrepreneurial skills and finance to turn their dreams to reality.

Unfortunately, a good percentage of these graduates end up frustrated and heartbroken after years of fruitless job search.

Eventually, they find solace in criminality in their struggle to earn a living in a depressed economy.

This dangerous development, experts reckon, finds expression in the crimes listed above which are perpetrated by the youths.

To arrest the worrisome situation and equip the youth, especially those in higher institutions for future leadership roles, the Central Bank of Nigeria CBN Governor, Mr Godwin Emefiele, has assembled a cocktail of interventions.

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One of them is the Tertiary Institutions Entrepreneurship Scheme (TIES) aimed at addressing the dual challenge of youth unemployment and underemployment in Nigeria. The programme is driven by 11-member Body of Experts (BoE) that supervises it.

The unveiling of the scheme was preceded by the release of the TIES implementation guidelines in October 2021 and the subsequent opening of the portal for submission of applications.

Eligibility covers applicants with a first degree (or its equivalent) and NYSC discharge certificate or exemption, valid mobile phone number linked to National Identity Number (NIN); Biometric Verification Number (BVN), Tax Identification Number (TIN), a  valid email address, evidence of business registration and corporate bank account number of business.

Emefiele further said that TIES draws inspiration from the need to bridge youths financing gaps and enhancing access to low-cost credit to drive development of business is a task that can only be addressed by an innovative financing model that correlates with the complexity and dynamics of these small businesses.

The Scheme, developed in partnership with Nigerian polytechnics and universities, is also designed to harness the potential of graduate entrepreneurs by creating a paradigm shift from the pursuit of white-collar jobs to a culture of entrepreneurship for economic development and job creation.

The idea was first mooted at the 51st convocation of the University of Lagos, in July 2021, where Emefiele delivered the convocation lecture titled, ‘National Development and Knowledge Economy in the Digital Age: Leapfrogging SMEs into the 21st Century’.

At that event, he promised that the Central Bank will seek fresh collaboration with the nation’s tertiary institutions to develop entrepreneurship programmes, and to support, through the provision of access to finance, graduates and undergraduates who have bankable ideas, to bring them to fruition.

Thereafter, engagements began between the Central Bank and the leadership of some of our tertiary institutions regarding the framework for an innovative financing model that will support entrepreneurship development among our graduates and undergraduates.

The CBN Governor at the event wooed the youths to drop their arms and tap into various intervention programmes championed by the apex bank.

He reckoned that thousands of students graduating yearly from Nigerian tertiary institutions without the commensurate employment opportunities in both the public and private sectors, makes it imperative that government, at all levels, puts in place policy measures to support entrepreneurial development among the youth.

Such measures, he emphasized, would create an enabling business ecosystem that supports innovation and enables the youth to unleash their entrepreneurial potential, by redirecting their focus from seeking white-collar jobs to a culture of entrepreneurship development.

For Emefiele, the ecosystem should provide support in re-orientating, training, and providing a financing model apt to the peculiarity of the sector within which the businesses operate.

He said: “With an estimated population of 213 million, out of which two-third are youth, aged under 35 years, the nation is faced with a historic opportunity, particularly as the demography continues to create clear evidence of their relevance to economic development, as accentuated by the global recognition of Nigerian tech start-ups and continued growth of businesses in the technology space owned by the youth.

“In realization of this, the CBN has introduced several innovative financing programmes designed to extend low-cost financing to youth entrepreneurs across the country. These interventions have continued to receive resounding commendations, as they have proven effective in extending credit to youth entrepreneurs across the country. For instance, under its Targeted Credit Facility (TCF), the Bank has disbursed a total of ₦363.49 billion to 766,719 beneficiaries, comprising 638,070 households and 128, 649 small businesses. Under its Agribusiness Small and Medium Enterprise Investment Scheme (AgSMEIS), the Bank has released ₦134.63 billion to 37,571 entrepreneurs. Disbursements under the NYIF stood at ₦3.00 billion to 7,057 small business beneficiaries.

“Entrepreneurship is an integral part of any economy, and entrepreneurs play a key role in driving growth and innovation, which in turn results in job creation.  In line with its mandate of ensuring monetary and price stability, and its developmental mandate of ensuring inclusive growth in the economy, the Central Bank of Nigeria (CBN) has introduced several programmes  that create an ecosystem that allows the flow of affordable credit to the real sector. These interventions are industry-led and designed to support the resilience of targeted priority sectors and segments for growth and jobs creation.

“The TIES  is aimed at providing an innovative financing model that will support the development of innovative entrepreneurial ideas among graduates and undergraduates of tertiary institutions in Nigeria”, Emefiele explained.

TIES was designed to address three verticals of the segment, and these are: the Term Loan Component, which provides direct credit opportunities to graduates of Nigerian polytechnics and universities of not more than seven years post-graduation. An applicant, if successful, shall be eligible for a maximum of ₦5 million for an individual, sole-proprietorship or small company; and a maximum of ₦25 million for a partnership or company. The tenor for the facility is maximum of five years, with a one-year moratorium, and at an interest of 5 per cent per annum, which shall revert to 9 per cent from March 2022. The pilot phase of the Scheme is presently being implemented through the Bank of Industry (BOI) with the development of an application portal and processing of submitted applications.

The second is the Equity Investment Component designed to support start-ups, existing businesses requiring expansion, and ailing businesses seeking resuscitation.

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This component is to be implemented under the Bank’s AgSMEIS equity window. Thus, the investment limit shall be subject to the limit prescribed by the AGSMEIS Guidelines and the investment period not more than 10 years.

The third is the Developmental Grant Component aimed at raising awareness and visibility of entrepreneurship among undergraduates of Nigerian tertiary institutions. Here, polytechnics and universities in Nigeria shall compete in a national biennial entrepreneurship competition where undergraduates are presented by the tertiary institutions to pitch innovative entrepreneurial or technological ideas with transformational potential. Three top institutions at the regional levels shall proceed to the national level, where the top five shall be awarded grants ranging between ₦120 million and ₦250 million. The grant awards shall be used by the tertiary institutions solely for the development of the award-willing ideas.

The CBN Governor said the focal targets under the TIES include; 25,000 ‘gradpreneur-led innovative start-ups and businesses annually with access to finance under the Scheme; 75,000 sustainable jobs created by gradpreneur-led businesses financed under the Scheme annually, and 50 percent per annum of female-gradpreneurs financed as a percentage of total projects financed under the Scheme.

Other targets include 40 percent per annum of agropreneurs financed as a percentage of total projects financed under the Scheme; 20 percent per annum of creative entrepreneurs financed as a percentage of total projects financed under the Scheme . Techpreneurs financed as a percentage of total projects financed under the Scheme, and 20 percent per annum of other gradpreneurs financed as a percentage of total projects financed under the Scheme.

For the scheme’s success, the Body of Experts (BoE) comprising professionals of impeccable standing, drawn from the academia, professional bodies, and industry. The Body was constituted to evaluate and rank entrepreneurial presentations made by the tertiary institutions under the Developmental (Grant) Component. The BoE is to recommend projects with high potential and transformational impact for grant awards.

The Body of Experts is Chaired by Mr. Abubakar Suleiman (Sterling Bank Plc) while   the Secretary is Mrs. Temitope Akin-Fadeyi of the CBN.

Other members include; Mr. Patrick Iyamabo of First Bank Plc; Mr. Adamu Lawani (Zenith Bank Plc); Ms. Ngover Ihyembe-Nwankwo (Rand Merchant Bank); Mr. Ashafa Ladan (National University Commission), Engr. Abbati D.K. Muhammad (National Board for Technical Education;     Dr. Friday Okpara (SMEDAN); Mr. Tope Fasua (Global Analytics Consulting);    -Brigadier-General Folusho Oyinlola (National Defence College); and Ms. Bolanle Adekoya (PWC).

The first five beneficiaries of N5 million facility are; Aisha Suleiman;

Chukwudi Ukpabi; Zainab Mohammed; Nura Muhammed; Simeon Ojonugba and Adebowale Adeoye.

They were among the many who submitted their applications via the dedicated portal and their applications processed.

Emefiele urged the recipients of the loans to judiciously utilize the funds for the purpose for which they had indicated in their applications.

“It is my strong belief that the Scheme will offer our youth entrepreneurs access to much needed finance, which has been identified as one of the major limiting factors to entrepreneurship development in Nigeria.

“We are aware that there has been agitations by some tertiary institutions that were not included in the pilot phase of the Scheme. Other deserving tertiary institutions will be brought on board over time. With ongoing dialogue and engagements with other segments of the educational sector, feedbacks received shall form the basis for the periodic review of the guidelines, with the intent to scale up participation under the Scheme in future.

“CBN is committed to supporting the country’s educational sector in all ramifications, as without a robust educational sector wholesome development shall remain a mirage. I believe with the launch of the Tertiary Institutions Entrepreneurship Scheme, and other programmes such as this, it is only a matter of time before our tertiary institutions return to the glory days, where they churned out graduates, not only ready and able to provide real solutions to the various challenges emanating from their immediate environment and even beyond, but who can compete favourably with their counterparts around the world”, he explained.

He charged the graduates and undergraduates not to succumb to the weight of despair regarding the challenges being faced by the nation. He urged them to embrace the paradigm shift, by applying innovative and creative thinking in providing solutions capable of creating wealth and value for themselves, communities and the nation.

One of beneficiaries, Aisha Suleiman, told Daily Sun that the fund will handsomely expand her cashew nuts business.

“I’m based in Kogi State and I’m into cashew nuts production. With this N5 million, I can now buy own commercial oven to roast the nuts. I’ve been using another person’s own and it eats into my profit.

“I currently employ seven staff but I hope to scale that to over 12 in the nearest future.

“I sincerely commend CBN for this loan. It’ll help youtha a great deal”, she said.

Another beneficiary, Chukwudi Ukpabi, said: “this will help my poultry business. I never believed in looking for jobs after school. That was why I went into business. With this loan, I’ll expand my business. I wish more youths can leverage on this platform to earn legitimate income instead of going into crimes”, he said.

Commenting on TIES, former Imo State Finance Commissioner, Prof Uche Uwaleke told Daily Sun that the Scheme, if well implemented and sustained, was capable of boosting entrepreneurship among young graduates in the  country.

“It is a fact that many graduates with bright ideas have difficulty actualizing them due to access to capital. The provision of soft loans ranging from N5million for individuals to N20 million for partnerships will go a long way in creating job opportunities and reducing unemployment”, Uwaleke said.

On his part, the Vice Chancellor, Ajayi Crowther University, Oyo State, Prof. Timothy Adebayo, said there was an urgent need to look inwards to grow the economy, especially latching on agriculture to drive down the escalating prices of foodstuff.

Other analysts have also hailed the CBN Governor for working hard in advancing the patronage of made-in-Nigeria goods despite the socio-economic challenges bedeviling the country.

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