The Federal Government has slashed the collateral on the N220 billion Micro, Small and Medium Enterprises Fund (MS MEF).The reduction was part of mea sures to ease access to the fund.
This decision was taken, yesterday, by the National Council on Small and Medium Enterprises (MSMEs) headed by Vice President Namadi Sambo, which met in the State House
Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, who briefed State House corre spondents after the meeting, said the council deliberated on how to create awareness about the fund and lower the conditions for accessing it.
The fund, domiciled in the Central Bank of Nigeria (CBN), was launched by President Goodluck Jonathan last year.Aganga recalled that in its in augural meeting, the council had set up a committee to look at the funds and the conditions that were required to access it, noting the committee, chaired by the Minister of National Planning, submitted its report to the council, yesterday.
He said following the reaction of the CBN to the committee’s re port, the council took a number of decisions affecting the criteria for accessing the funds.According to Aganga, “The first is that access to collateral requirements which was initially 75 per cent which made it difficult for some commercial banks to be able to access has been reduced to 50 per cent.“All inclusive interest rate must not exceed nine percent.
That has always been the operative of the CBN and we have stuck to that. However, the CBN is disbursing to these banks and the Financial Institutions and others at two per cent from the original interrate rate of three percent, Aganga said.
The minister noted that the council also deliberated on ways to make the fund sustainable across board for micro finance in stitutions.According to him, “this was important because the mirco businesses at the grassroot constituted 99 percent of the total MSMEs sec tor and “those are the ones that require the support of the federal government.
”He continued: “We also agreed that all government programmes should be better coordinated. As a result, we are looking at all the funds available and we will be making information available to all Nigerians on the funds that are available and the guidelines on how each one of them can be ac cessed by the average Nigerian.”On the need for women to have access to the fund, he announced that the president had already announced that about 60 percent of that fund be made available to women while men and women with disabilities have also been prioritised.
