CBN Releases Framework For Disbursement Of N75bn Youth Fund
***NIRSAL Microfinance Bank To Get N12.5 Seed Capital ***500,000 Jobs To Created In Four Years
The Central Bank of Nigeria (CBN) on Wednesday rolled out the guidelines for the implementation of the N75 billion Nigeria Youth Investment Fund (NYIF).
The apex bank approved a take-off seed capital of N12.5 billion from the N75 billion NYIF for the NIRSAL Microfinance Bank (MFB).
The NIRSAL MFB will be the operational base for the disbursement of the NYIF as the eligible participating financial institution for the scheme.
The CBN made this declaration on Wednesday in a statement titled ‘‘Framework for the Operation of the NIRSAL Microfinance Bank Window of the Nigeria Youth Investment Fund”.
The NYIF, an initiative of the Federal Ministry of Youth and Sports Development, is the Federal Government’s strategic response to youth empowerment challenge in the country.
The CBN stated that the scheme seeks to improve access to finance for the youths and youth-owned enterprises for national development; generate employment opportunities to curb youth restiveness; boost the managerial capacity of the youth, and develop the youths’ potentials to become the future large corporate organisations.
The CBN stated that the NYIF scheme will financially empower the youths to generate at least 500,000 jobs between 2020 and 2023.
Under the CBN’s framework for the operation of the NIRSAL MFB, individual (unregistered business) shall be determined based on activity/nature of project subject to the maximum of N250,000 credit.
Registered businesses (business name, limited liability, cooperative, commodity association) are to be determined by activity/nature of project subject to the maximum of N3 million (including working capital).
The CBN further stated, “Immovable assets acquired with the loan must be registered with the National Collateral Registry (NCR).
“Tenor for loans shall be maximum of five years depending on the nature of the business and the assets acquired, and moratorium of up to one year may be allowed depending on the nature of the business and the assets acquired.”
The CBN noted that interest rate under the intervention shall not be more than five per cent per annum (all-inclusive).
The guidelines further stipulated that the youths would be duly screened (and undergo the mandatory training where applicable) and would be advised to log on to the portal provided by the NMFB to apply for the facility.
It added that the NIRSAL MFB will leverage on the General Standing Instruction (GSI) as collateral while corporate guarantees will be acceptable where applicable.
The CBN said, “Upon satisfactory appraisal of applications, NIRSAL MFB shall apply for release of funds in respect of approved individuals/enterprises from the NYIF and CBN, and NIRSAL MFB shall conduct credit checks on applicants and those with unsatisfactory credit reports will be rejected.”
According to the guidelines, repayment of loans will be made on instalment basis by the beneficiaries to the NIRSAL MFB according to the nature of enterprise and the repayment schedule/work plan provided and agreed at the application processing stage.
It added that to ensure equitable participation and even access to finance by the youth across the country, applications would be batched according to state and Local Government Areas (LGA) of applicants.
The CBN assured applicants that it would promote gender parity and encouraged female entrepreneurs to apply.
It also explained that the Project Management Office would be established by the Federal Ministry of Youth and Sports Development, which will work with NIRSAL MFB on applicant screening, project monitoring and reporting, among others.
InsideBusiness.ng recalls that the Federal Executive Council (FEC) had on July 22, 2020, approved N75 billion for the establishment of the Nigeria Youth Investment Fund for the period of 2020 – 2023.
The Fund is dedicated to investing in the innovative ideas, skills and talents of Nigerian youths and to provide them with a special window for accessing funds, business management skills and other inputs critical for sustainable enterprise development.
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