CBN Targets Financing 25,000 Graduate Entrepreneurs Annually

The Central Bank of Nigeria (CBN) has rolled out a new scheme targeted at financing 25,000 graduate entrepreneurs annually, which will, in turn, create an additional 75,000 sustainable jobs annually across the country.

This, the apex bank said, is coming in form of loans for university and polytechnic graduates who are willing to set up businesses under the Tertiary Institutions Entrepreneurship Scheme (TIES), as part of its effort to fight rising unemployment in the country.

According to the National Bureau of Statistics (NBS), Nigeria’s unemployment rate rose to 33.3 per cent in the fourth quarter of 2020, translating to some 23.2 million people, the highest in at least 13 years and the second-highest rate in the world.

The figure had jumped from 27.1 per cent recorded in the second quarter amidst Nigeria’s lingering economic crisis made worse by the coronavirus pandemic. Unemployment rate in the country has more than quadrupled since 2016 when the economy slipped into a recession. A second recession occurred in 2020.

According to the implementation guideline released and signed by Yusuf Yila Philip, CBN’s Director, Development Finance, the objective of the TIES is to enhance access to finance by undergraduates and graduates of polytechnics and universities in Nigeria with innovative entrepreneurial and technological ideas.

“The CBN, as part of its policy measures to address rising youth unemployment and underemployment, introduces the Tertiary Institutions Entrepreneurship Scheme (TIES) to create a paradigm shift among undergraduates and graduates of Nigerian polytechnics and universities, from seeking white-collar jobs to entrepreneurship,” the apex bank said.

“The scheme aims to provide an innovative financing model that will boost job creation, enhance entrepreneurship development, and support economic growth.”

The guideline further said start-ups and existing businesses in areas such as agribusiness, information technology, creative industry, as well as science and technology are eligible for financing under the scheme.

It further noted that priority would be given to innovative entrepreneurial activities with high potentials for export, job creation and transformational impact.

The apex bank also explained that the scheme will be implemented through three components namely term loan, equity investment and developmental components.

Under the term loan component, an individual project can access a maximum loan of N5 million with a five-year tenor and interest rate of five percent per annum (nine percent effective from March 1, 2022, or as may be prescribed by the CBN). For partnership/company projects, the loan is limited to N25 million.

“Applicants under the scheme shall be graduates of Nigerian polytechnics and universities with first-degree certificate (BSc/HND/ or its equivalent); National Youth Service Certificate (NYSC) discharge or exemption certificate; Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training; and not more than 7 years post-NYSC,” the document reads.

The CBN added that the equity investment component shall be in the form of injection of fresh capital for start-ups, expansion of established businesses or reviving of ailing entrepreneurial businesses.