By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-The Central Bank of Nigeria (CBN) Friday announced the allocation of 60 percent (60%) N132.00 Billion of N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) to women in Nigeria.

This is contained in the released guidelines for the operation of MSMEDF for Nigeria by the apex bank and obtained by InvestAdvocate.

The CBN said considering the peculiar challenges faced by women in accessing financial services in Nigeria, the Revised Microfinance Policy, Regulatory and Supervisory Framework in Section 4.2 (iv), provides that women’s access to financial services should increase by 15% annually in order to eliminate gender disparity.

According to the CBN in order to achieve this, 60% (N132.00 Billion) of the Fund was earmarked for providing financial services to women.

The CBN said the fund shall have two (2) main key objectives which include social/developmental objectives/Grants and commercial objectives.

The CBN affirmed that 10% (N22 billion) of the Fund shall be earmarked for social and developmental objectives; while the rest 90% amounting to N198 billion, will be utilised for the provision of direct on-lending facilities to Participating Financial Institutions (PFIs).

Participating Financial Institutions shall be Microfinance Banks, Microfinance Institutions (NGOs and Financial Cooperatives) and Finance Companies and lending institutions that satisfy the eligibility criteria defined in the Guideline.

The CBN said those to manage the Fund, an organisation appointed by it shall do this and oversee its day-to-day operations and shall have a Steering Committee constituted in line with its approved shareholding structure and chaired by the Governor of the CBN.

Other members shall include: Deputy Governor, Financial Systems Stability, those representing the Federal Ministry of Finance, Nigeria Deposit Insurance Corporation (NDIC), National Association of Microfinance Banks and National Association of Non-Bank Microfinance Institutions.

Also to be part of the fund managers are National Poverty Eradication Programme (NAPEP), Small and Medium Enterprises Development Agency of Nigeria, Ministry of Women Affairs and Social Development and the Development Finance Department of CBN to provide the Secretariat.

CBN says the maximum loan amount shall be as follows: unit microfinance N10 million, state microfinance N50 million, national microfinance N1.0 billion, NGO/MFIs N5.0 million, financial cooperatives and finance companies N5.0 million respectively or 100% of Shareholder’s Fund Unimpaired by losses for participating MFBs and Finance Companies desirous of facilities in excess of the amounts shown in their names. “All the facilities will have option of roll-over upon satisfactory utilisation,” the CBN said.

Further to this, the CBN further affirmed that interest rate for the fund shall be administered at 9% to the PFIs with a spread of 6 % bringing the lending rate to a maximum of 15 % per annum (PA) subject to review by the Steering Committee of the Fund.

“However, SMEs seeking facilities for asset acquisition are entitled to an appropriate moratorium to be decided by the fund managers on case by case basis,” the CBN said.

Similarly, the CBN affirmed that the facility shall have a maximum tenor of three (3) years depending on the type of enterprise (MSME).

The CBN had said that a large number of un-served and under-served clients exist in the Nigerian MSME sub-sector and to address the funding requirements of this critical segment of the economy, Section 6.10 of the revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria stipulates that “a Microfinance Development Fund shall be set up, primarily to provide for the wholesale funding requirements of MFBs/MFIs”.

The Policy also stipulates 80:20 prescription for on- lending to micro enterprises and SMEs respectively, hence the decision of the Central Bank of Nigeria to rename it “Micro, Small and Medium Enterprises Development Fund’ (MSMEDF).

Click here to read full MSMEDF guidelines by the CBN