The Central Bank of Nigeria (CBN) is working on instituting a framework that would enable young graduates from Nigerian universities to access loans for their own businesses.
CBN Governor, Godwin Emefiele who broke the news yesterday in his keynorte speech at the Convocation Lecture for the 51st Covocation ceremonies of the University of Lagos, said the framewor on supporting youth entrepreneurship will be developed by the CBN Development Finance Department in collaboration with the Nigerian universities management.
Congratulating the graduating students, Emefiele urged them to take advantage of some of the Bank’s directly aimed at supporting SMEs such as the SME Credit Guarantee Scheme (SMECGS); Micro, Small and Medium Enterprises Development Fund (MSMEDF); Youth Entrepreneurship Development Programme (YEDP); Agri-business/Small and Medium Enterprises Investment Scheme (AGSMEIS); Creative Industry Financing Initiative (CIFI); Targeted Credit Facility (TCF) and the Nigeria Youth Investment Fund (NYIF).
Speaking on the topic: “National Development and Knowledge Economy in the Digital Age: Leapfrogging SMEs in the 21st Century,” he said the young graduates can access seed capital from several youth investment-friendly programmes and interventions schemes set up by the CBN like the the N75 billion Nigerian Youth Investment Fund and Creative Industry Financing Initiative (CIFI) to kick off their businesses.
He said the youths will have necessary inputs to build successful SMEs and other businesses.
Emefiele said that embracing the schemes will enable the new graduates to be creating jobs, not just for themselves but for others.
He said: “I must confess that given the population growth rate, and the large number of our graduating students, we need to begin to see how Small and Medium Enterprises (SMEs) can be incubated. The SMEs are the ones that develop and grow to large corporates, and become great companies in the future. Going from this lecture today, we would like to see more universities, to begin to conduct sort of entrepreneurship development competition programme”.
Continuing, Emefiele told the graduates: “If you truly say you are a graduate of agriculture, are you graduating with a certificate of agriculture to begin to look for a job in a company or you are graduating with a certificate in agriculture to go into some agricultural business that will earn you revenue and profit, with which you can develop your life and country. Those are the kind of things we need today, and we would like to encourage universities to hone the entreprenual skills of their students”
“Our team from the Development Finance Department at the CBN will go right to the universities and draw a framework under which this can be done because this is one aspect where we can begin to stimulate the entrepreneurship in our youths,” he said.
Restating the profitability of agricultural businesses, the CBN boss disclosed that in
Nigeria today, agriculture is one of the most profitable businesses .
“We loaned as high as N10 billion to people for rice cultivation. The proceeds from the farm was used to repay the loan, and at the end of the day, they made profit of another N10 billion.”
“If you are interested, we will share our number with you. Agriculture is profitable in Nigeria given the need for us to embrace food security. And we must achieve food security. The university community should get the students to embrace not just agriculture but entrepreneurial skill using digital technology for the good of themselves and country,” he said.
Emefiele pledged the CBN’s readiness to increase its development finance interventions to further support start-ups and Small and Medium Enterprises (SMEs) in the country.
He highlighted the critical role of vibrant and growing SMEs to the growth of the economy and the creation of jobs for Nigerian youth, noting that special consideration needed to be given to the strengthening of physical and ICT infrastructure to enable SMEs perform more efficiently and become globally competitive.
While noting that the potential of SMEs in enhancing economic growth was hampered by limited access to finance, inadequate infrastructure and poor digital penetration, Emefiele enjoined the Government and the private sector to provide more support in addressing the challenges of SMEs in the country. Specifically, as users of new technology, he urged that policies should incentivise the adoption of innovations that will improve SMEs competitiveness and productivity. He also tasked all relevant stakeholders to deepen reforms that will improve human capital development through skills enhancement and proper linkage of research to the SME sector.
Citing examples of other climes that have continued to harness the benefits of the knowledge economy to accelerate economic growth, through the contributions of SMEs, Emefiele charged tertiary institutions in the country to tap into the educational trends that are significant drivers of productivity in advanced and emerging markets, in order to reshape the existing curriculum, enhance the learning experience of students and foster innovation amongst the faculty and staff in Nigerian institutions.
Emefiele further opined that enhanced collaboration between universities and players in key sectors of the economy such as agriculture, manufacturing and ICT were necessary to enable implementation of sound ideas generated from the universities. He, however, noted that universities in many developing countries had little or no formal linkages to industry, thereby, resulting in the production of ill-equipped graduates.
Emefiele therefore challenged Nigerian tertiary institutions to ensure effective collaboration with industry players in key sectors of our economy, in the training of relevant manpower to minimize mismatches between the skills required by firms and the educational qualifications of Nigerian graduates.
Speaking on the role of the CBN in the development of SMEs in Nigeria, the Governor reiterated that the Bank had rolled out massive developmental interventions in some critical sectors of the Nigerian economy, especially in agriculture, manufacturing and SMEs. He said attention had also been paid to advancing knowledge and innovation through various initiatives targeted at promoting youth’s entrepreneurship, research and development.
Emefiele, who disclosed that the CBN had also prioritized financial inclusion as a deliberate strategy to reduce the percentage of adults excluded from financial services, urged the graduating students to be part of the solution to a greater Nigeria.
According to him, “…despite the hues, cries and complaints about this country, this remains the land of indescribable opportunities, the land where finding a simple solution to a common problem can lead to unimaginable financial prosperity.”
He said that a vibrant and growing SMEs sector is critical for achieving Nigeria’s goals of enabling greater growth of the economy and in creating jobs for the teeming youths.
He said that although the economy remains on a growth trajectory, the impact of the pandemic in terms of job losses, low productivity and weak growth has continued to linger.
Given the huge potential of SMEs in accelerating economic growth and employment generation, it is imperative that we reflect on strategies that would maximize their contributions to national development as part of our activities aimed at catalysing further growth of the Nigerian economy, given that a vibrant and growing SME sector also offers a viable alternative that would aid job creation in our rural and urban communities.
He said that in the 21st century we have witnessed ground-breaking innovations and growth in several countries, stemming from significant investments in building a knowledge-based system that enables greater application of technologically driven research and innovation. Technology is not only reshaping how knowledge is shared, but also how goods and services are produced and traded. It is also redesigning the various modes of payments for goods and services towards systems that enable faster and more efficient settlement of payment transactions.
He said that notwithstanding the benefits that a vibrant SME sector provides, financial constraint has hindered SMEs from accessing innovative tools that could enable greater expansion of their activities as many of them remain trapped in our large informal sector.