N220 Billion MSME Fund: Another Reality Of Jonathan Transformation Promise

By Edwin Ekene Uhara
On Monday August 18 2014, President Good luck Jonathan launched the N220
billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) in
Abuja.
The MSMED Fund is an intervention programme introduced by the Jonathanadministration to uproot abject poverty from the land; thereby creating
jobs as well as empowering Nigerians with the needed skills and finance to
turn their ideas to wealth creation.
However, it is worthy of note that access to finance as well as inadequate
skills are among the challenges confronting Nigeria before now. May I also
add that our tertiary institutions are also contributing to some of the
economic woes facing the nation because there lay much and unnecessary
emphasis on theories more than practical. There prefer garbage-in
garbage-out system of education to creative and innovative thinking
system. There teach economic and political theories that only exist in
textbooks and not in the real world. There teach students how to look for
job and not how to create jobs. This is why there churn out graduates that
lacks relevant skills needed for national development. So, this is what
the Jonathan Government is hell-bent on correcting.
He has done so by increasing the budgetary allocations to the nationeducation sector. He has done so by revamping our air ports and rail
system. He has done so by introducing and implementing friendly economic
policies that are attracting Foreign Direct Investment (FDI). He has done
so by investing heavily in infrastructure. He has done so by establishing
the Subsidy Reinvestment and Empowerment Programme (SURE-P). Now, he has
launched the N220 billion Micro, Small and Medium Enterprise Development
Fund to make resources available to entrepreneurs in the country.
According to reports, the new Central Bank Governor, Mr. Godwin Emefiele
was quoted as saying œIt is imperative that this segment of the
financial system be strengthened in order to forestall the inevitable
adverse socio-economic consequences of financial exclusion¦ The linkage
between finance and economic development has been well documented.Access to finance has a significant multiplier effect on the economy
because of its catalytic effect on job creation. It is in realization of
this that the (CBN) launched the N220 billion MSME Development Fund to
provide financial resources to the entrepreneurs across the country
through Participating Financial Institutions (PFI™s).
The CBN boss also added that 6o enterprising graduates had been invited to
the programme to be trained and mentored on how to identify business
opportunities and source for fund. This is however a commendable
initiative by our president.
The report also noted that œThe participating deposit money banks will
be mandated to obtain biometric information of borrowers through a data
base already created by the CBN to ensure that funds get to genuine
borrowers as well as discourage multiple access. Also the apex bank will
set up strict monitoring facility to ensure that the money not only gets
to the targets, but also used for viable growth.
Under this programme, qualified individuals would be able to access
between N50, 000 and N100, 000. While state governments are entitled to
apply for N2 billion. In the same vein, two percent of the fund would be
set aside for economically active, but physically challenged or disabled
persons in the country. Also, intending beneficiaries would be mandated to
join a cooperative society to facilitate or increase their chances.
The CBN boss also noted that some billions had so far been disbursed to
313 projects under the Commercial Agricultural Credit Scheme (CACS) as at
July 2014.
While launching the fund, President Good luck Jonathan said œAll over
the world, the contribution of MSME to GDP is on the average of about 47
percent¦ with about 17.3 million MSME™s in Nigeria, there is need for
more concrete and concerted efforts to expand the activities of MSMEs in
our country¦ Given that structural transformation of the economy remains
our core priority, we are investing heavily in critical infrastructure to
promote job creation and inclusive growth.
Also speaking, the Minister of Industry, Trade and Investment, Mr.
Olusengun Aganga described the CBN intervention  as a big step in the
development of the MSME sector, but lamented that though SMEs sector
accounted for about half of GDP, only 80 percent of small businesses had
access to formal financing.
Nonetheless, it will be recalled that this writer had in one of his
articles entitled: œThe Truth about Self Employment called for a
œtriangular partnership between the government, financial
institutions and the faith based organizations in the fight against
unemployment and poverty in the country.
Nonetheless, a part from the launch of the N220 billion Micro, Small and
Medium Enterprise Development Fund (MSMEDF), the President had already put
in place economic policies that will leapfrog our economy from that of a
developing nation to a very developed one. A good example is the
implementation of the National Industrial Revolution Plan.
Comrade Edwin Ekene Uhara is an Activist and Public Affairs Commentator.
He is also a staunch supporter and defender of President Jonathan’s
Government in the media. He writes from  Abuja.
Reach him on 07065862479 or edwinuhara@rocketmail.com