Funding Youth Entrepreneurship

Obinna Chima writes about the Nigeria Youth Investment Fund (NYIF) recently launched by the federal government, which aims to financially empower youths in the country and generate at least 500,000 jobs before 2023

Nigeria’s unemployment rate as of the second quarter of 2020 stood at 27.1 per cent, according to the National Bureau of Statistics (NBS).

This meant that more than 22 million Nigerians are presently unemployed.

This is even more worrying seeing that the NBS figures also showed that as of the second quarter 2020, unemployment rate among young people (15-34years) was 34.9 per cent, higher than the 29.7 per cent it was as of the third quarter of 2018.

This showed that there is need for more attention to be given to the menace of youth unemployment in order to save the country from potential danger.

Clearly, the rising cases of social vices in the country would reduce significantly if a lot of the able bodied young men in Lagos, Port Harcourt, Kano, Kaduna, Owerri, Ado-Ekiti, and other cities in the country are able to get jobs or are engaged in various forms of vocational jobs.

Indeed, not being able to get job month after month, year after year, destroys the self-worth of an individual.

Some have also argued that for Nigeria, its high rate of youth unemployment is a major threat to its national security.

Effects on National Security

Afolabi Oluwaseun, in a scholarly paper titled: “The Rate of Youth Unemployment and Its Effects on National Security,” argued that because of the level of unemployment, a lot of unemployed youth in the country have become instrument of evil in the hands of the politicians in perpetuating their hidden agenda before, during and after the election.

He cited an example with the 2011 presidential election, where over 500 lives were lost including nine youth corp members and thousands of lives and properties were displaced mostly in the northern part of the country.

In addition, many ethno-religious crises were perpetuated by the youth.

Therefore, the high level of crime rate weakens the national security of the country which poses threat to lives and properties, he noted.

Oluwaseun, pointed out that the Arab Spring was carried out by restive youths who were frustrated by the way their countries were governed.

“What is the likelihood that such revolution cannot be carried out by the teeming youth of the country? In addition, we need to recall the role of the restive youth in the Niger/Delta region before the declaration of amnesty by the federal government. “These youths constituted a menace in the society by terrorising and kidnapping oil workers and foreigners to demand for huge ransoms.

“Many lives and property were lost during the period of their restiveness. Currently, kidnapping is the latest self-employment unemployed youth are engaged in.

“Several politicians, actors/actresses, young ones, aged etc. have been victims in the hand of kidnappers. Despite several arrests carried out by the police, the business of kidnapping keeps flourishing every day.”

He noted further than many youth have turned themselves to “area boys” engaging in nefarious activities and a ready evil instrument for the politicians during political activities.

In addition, the rise of insurgent groups as well as frequent cases of ethno-religious crisis was also attributed to high youth unemployment in the country.

“Nigeria is the second largest economy in Africa yet the effect of unemployment tells on the economic growth.

“The youth that are supposed to be productive agents of the economy and be the greatest assets in terms of human resources are still dependent on their parents, relatives or friends.

“Hence, the high rate of youth unemployment renders economic security ineffective. The security implication of over 20 million unemployed youths is unimaginable.

“Therefore, the government needs to devise policies that will stimulate economic growth that would increase human capital development and productivity output.”

Tackling the Menace

Some experts have advised the federal and state governments to implement policies that would address the unfortunate situation.

To the Founder, Foundation for Economic Research and Training, Prof. Akpan Ekpo, stressed the need for policies to address youth unemployment.

“I have been saying for years that our massive youth unemployment is a ticking time bomb waiting to explode. When you have such a national crisis of unemployment, it is the government that can address it and not the private sector.

“But the government has over the years been paying lip service to it.

In order to address the looming danger, the federal government and the Central Bank of Nigeria (CBN) last October released the guidelines for the N75 billion Nigeria Youth Investment Fund (N-YIF), with a take-off seed capital of N12.5 billion.

NIRSAL Microfinance Bank (NMFB) is the eligible participating financial institution for the scheme.

The Scheme

The scheme seeks to improve access to finance for youth and youth-owned enterprises for national development; generate much-needed employment opportunities to curb youth restiveness and boost the managerial capacity of the youth and develop their potentials to become the future large corporate organisations.

According to the central bank, the target of the N-YIF is to financially empower youths to generate at least 500,000 jobs between 2020 and 2023.

According to the Framework for the Operation of the NIRSAL Microfinance Bank Window of the Nigeria Youth Investment Fund (N-YIF) posted on the CBN website, individual (unregistered business) shall be determined based on activity/nature of project subject to the maximum of N250,000 credit.

On the other hand, registered businesses (business name, limited liability, cooperative, commodity association shall be determined by activity/nature of project subject to the maximum of N3 million (including working capital).

The CBN, however, added that 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, adding that moratorium of up to one year may be allowed depending on the nature of the business and the assets acquired.

The CBN stated that interest rate under the intervention shall be at not more than five per cent per annum (all inclusive).

It said the MYSD will collaborate with relevant stakeholders to identify potential training for training/mentoring.

The guidelines stipulated that the youths that are duly screened (and undergo the mandatory training where applicable) shall be advised to log on to the portal provided by the NMFB to apply for the facility.

The CBN added that the NMFB will leverage on the General Standing Instruction (GSI) as collateral while corporate guarantees will be acceptable where applicable.

It added that upon satisfactory appraisal of applications, NMFB shall apply for release of funds in respect of approved individuals/enterprises from the NYIF and CBN, adding that NMFB shall conduct credit checks on applicants and those with unsatisfactory credit reports will be rejected.

The framework stated that repayment of loans shall be made on instalment basis by the beneficiaries to the NMFB 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 will be batched according to state and Local Government Areas (LGA) of applicants.

The CBN assured applicants that it will promote gender parity and encouraged female entrepreneurs to apply.

It explained that the Project Management Office shall 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.

The Nigerian Youth Employment Action Plan was developed by the Federal Ministry of Youth and Sports Development (FMYSD) as a built-in strategy to respond effectively to the youth employment challenge in Nigeria.

The major objectives of the plan are to address fragmentation of youth initiatives that prevent assessment of impact and to provide Nigerian youths with investment inputs required to build successful businesses that can become sustainable employers of labour and contributors to Nigeria’s development.

The plan targets young people between the ages of 18-35 years and details the needed actions required to support business establishment, expansion and consequent employment creation for youth in critical economic and social sectors.

The Federal Executive Council (FEC) had on the July 22, 2020 approved N75 billion for the establishment of the Nigeria Youth Investment Fund for the period of 2020 – 2023 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.


The Ministry of Youth and Sports Development has successfully completed its pilot disbursement of loans totaling N165,700,000 to 239 beneficiaries ahead of the processing of the over three million applications so far received under the fund.

Application data showed that a total of 3,120,107 have registered for the NYIF Pre-Assessment/Training to benefit from the N75 billion three-year financing for youth owned businesses and ideas.

Of the about 1000 processed as part of the pilot disbursement, a total of 94 were disqualified from the NYIF loan after training, as a result of existing COVID 19 or AGSMEIS loan that they have benefitted from.

A total of 500 applicants have been invited by NIRSAL MFB to apply for the NYIF loan after training and successful due process check while loan application by the applicants is at various times and the application is open until the applicants are able to provide all the requirements and complete the process.

Out of the 500 invited for the loan application, only a total of 393 have completed the loan application process and applied for the loan out of which a total of 293 applied early and their loan was processed and sent to CBN for approval at a total sum of N191, 700,000. On approval by CBN, a total of 239 have been successfully disbursed at a total sum of N165,700,000.

It is expected that in the coming days the fund will be disbursed to more applicants so as to enhance the entrepreneurial spirit among young Nigerians and ensure that they are engaged.

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