Obinna Chima writes on the expected benefits of the recently launched Tertiary Institutions Entrepreneurship Scheme
Nigeria’s high unemployment rate which stood at 33.3 per cent as of the fourth quarter of 2020, as well as the rate of poverty, mean that the country is effectively seating on a massive keg of gun powder.
Of the particular interest is the fact that unemployment rate among young people (15 to 34 years), according to figures from the national statistical body, increased to 42.5 per cent from 34.9 per cent while the rate of underemployment for the same age group declined to 21.0 per cent from 28.2 per cent.
Certainly, rising unemployment fuels poverty and has largely been attributed to rising incidence of civil unrest and criminalities in the country.
That is why there has been increasing call for governments at all levels to do more in the area of entrepreneurial studies as well as empowering students with entrepreneurial spirit so as to better prepare them as employers of labour outside the ivory towers.
Globally, entrepreneurs play significant roles in economic transformation, contribute massively to innovation, wealth creation and in improving the standards of living in any nation.
Clearly, this was why the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, recently launched the apex bank’s N500 million Tertiary Institutions Entrepreneurship Scheme (TIES).
The intervention scheme is expected to help address the challenge of lack of access to finance opportunities for students with entrepreneurial spirits in tertiary institutions.
According to the CBN governor, the intervention would create an enabling business environment that supports innovation and enable the youth to unleash their entrepreneurial potential, by redirecting their focus from seeking white-collar jobs to embracing a culture of entrepreneurship.
It is also expected to create the environment to provide support in re-orientating, training, and providing a financing model apt to the peculiarities of the sector within which the businesses operate.
He explained that the intervention consisted of three main components, including term loan, equity investment, and development grant.
Emefiele, at the launch of the scheme in Abuja, urged government at all levels to evolve policy measures to support entrepreneurial development among the youth in the country adding that this was particularly crucial given that about 600,000 students graduate yearly from Nigerian tertiary institutions without commensurate employment opportunities in both the public and private sectors.
The ceremony also witnessed the inauguration of the Body of Experts (BoE) by the CBN governor. The body, chaired by the Group Managing Director/Chief Executive, Sterling Bank Plc, Mr. Abubakar Suleiman, among other professionals, seeks to evaluate and rank entrepreneurial presentations made by the tertiary institutions under the development (grant) component.
Emefiele said members of the body were professionals of impeccable standing, drawn from the academia, professional bodies, and industry. He said part of their job was to recommend projects with high potential and transformational impact for grant awards.
He said the official launch of the TIES and subsequent inauguration of the BoE for the scheme’s development component was a testimony to the important role the youth play in building new blocks for economic growth, particularly as national growth was highly dependent on strong and competitive businesses.
He said bridging their financing gaps and enhancing access to low-cost credit to drive development of business was a task that could only be addressed by an innovative financing model that correlates with the complexity and dynamics of these small businesses.
Speaking on the genesis of the scheme, Emefiele said, “As you are all aware, at the occasion of the 51st convocation of the University of Lagos, in July 2021, I delivered the convocation lecture, titled, ‘National Development and Knowledge Economy in the Digital Age: Leapfrogging SMEs into the 21st Century.’
“At that event, I promised that the central bank would seek fresh collaboration with the nation’s tertiary institutions to develop entrepreneurship programmes, and to support – through the provision of access to finance – graduates and undergraduates who have bankable ideas, to bring the ideas to fruition.
“Engagements have been on-going between the central bank and the leadership of some of our tertiary institutions regarding the framework for an innovative financing model that will support entrepreneurship development among our graduates and undergraduates.
“This launch of the Tertiary Institutions Entrepreneurship Scheme today, is a culmination of the engagements and fulfillment of that promise.”
Emefiele said the scheme was designed to address three verticals of the segment namely, term loan component, which provides direct credit opportunities to graduates of Nigerian polytechnics and universities of not more than seven years post-graduation.
He said an applicant, if successful, should be eligible for a maximum of N5 million for an individual, sole-proprietorship or small company; and a maximum of N25 million for a partnership or company.
The tenure of the facility is a maximum of five years, with a one-year moratorium, and at an interest of five per cent per annum, which shall revert to nine per cent from March 2022.
The pilot phase of the scheme is presently being implemented through the Bank of Industry (BOI) with the development of an application portal and processing of submitted applications.
The equity investment component is designed to support start-ups, existing businesses requiring expansion, and ailing businesses seeking resuscitation, and shall be implemented under the bank’s AGSMEIS equity window.
Emefiele said the scheme would make it easy for youths to access credit and create jobs for themselves and others.
He warned that the finance to be provided was not a grant but a loan, which should be used for the intended purposes, adding that entrepreneurship remained an integral part of any economy and remarked that entrepreneurs play a key role in driving growth and innovation, which in turn results in job creation.
He explained that this was in line with its mandate of ensuring monetary and price stability, and its developmental mandate of ensuring inclusive growth in the economy, noting that the central bank had introduced several programmes to create an ecosystem that allowed the flow of affordable credit to the real sector.
The CBN Governor noted that these interventions were industry-led and designed to support the resilience of targeted priority sectors and segments for growth and job creation.
Emefiele said, “With an estimated population of 213 million, out of which two-third are youth, aged under 35 years, the nation is faced with a historic opportunity, particularly as the demography continues to create clear evidence of their relevance to economic development, as accentuated by the global recognition of Nigerian tech start-ups and continued growth of businesses in the technology space owned by the youth.
“In realisation of this, the CBN has introduced several innovative financing programmes designed to extend low-cost financing to youth entrepreneurs across the country. These interventions have continued to receive resounding commendations, as they have proven effective in extending credit to youth entrepreneurs across the country.”
Under the scheme, the investment limit shall be subject to the limit prescribed by the AGSMEIS guidelines and the investment period not more than 10 years.
Emefiele also noted that the development grant component was aimed at raising awareness and visibility of entrepreneurship among undergraduates of Nigerian tertiary institutions. He explained that here, polytechnics and universities in the country shall compete in a national biennial entrepreneurship competition where undergraduates are presented by the tertiary institutions to pitch innovative entrepreneurial or technological ideas with transformational potential.
According to him, three top institutions at the regional levels shall proceed to the national level, where the top five shall be awarded grants ranging between N120 million and N250 million.
He insisted that the grant awards should be used by the tertiary institutions solely for the development of the award-winning ideas.
Emefiele added: “As you are all aware, at the occasion of the 51st convocation of the University of Lagos, in July 2021, I delivered the convocation lecture, titled, ‘National Development and Knowledge Economy in the Digital Age: Leapfrogging SMEs into the 21st Century.’ At that event, I promised that the central bank would seek fresh collaboration with the nation’s tertiary institutions to develop entrepreneurship programmes, and to support – through the provision of access to finance – graduates and undergraduates who have bankable ideas, to bring the ideas to fruition.
“Engagements have been on-going between the central bank and the leadership of some of our tertiary institutions regarding the framework for an innovative financing model that will support entrepreneurship development among our graduates and undergraduates.
“This launch of the Tertiary Institutions Entrepreneurship Scheme today, is a culmination of the engagements and fulfillment of that promise.”
Highlights of the event included the presentation of commemorative cheques to five youth entrepreneurs whose proposals were found worthy of CBN’s financing under the pilot scheme.
Speaking during the launch of the initiative, Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, hailed the efforts of the Central Bank to ensure that the economy remained afloat despite the disruptions occasioned by the COVID-19 pandemic.
Represented by the Director, Public Affairs and Bilateral Relations, Office of the SGF, Mr. Olakunle Fashina, Mustapha said, not only would the TIES boost economic growth and reduce graduate unemployment but it would also provide well-grounded incentives for the ever-growing graduate population.
Also, on his part, Minister of Education, Mallam Adamu Adamu, described the intervention as a laudable effort by Emefiele to promote entrepreneurial skills in the ivory towers. He said the CBN was playing a significant role in laying a solid foundation for technological development in the tertiary institutions.
The Minister, who was represented by the Ministry’s Director, University Education, Mrs. Rakiya Iliyasu, said no country could make appreciable growth in sound technological innovation and sustainable development without developing its real sector.
Emefiele said the scheme was designed to address three verticals of the segment namely, term loan component, which provides direct credit opportunities to graduates of Nigerian polytechnics and universities of not more than seven years post-graduation.
He said an applicant, if successful, should be eligible for a maximum of N5 million for an individual, sole-proprietorship or small company; and a maximum of N25 million for a partnership or company.
The tenure of the facility is a maximum of five years, with a one-year moratorium, and at an interest of five per cent per annum, which shall revert to nine per cent from March 2022.
The pilot phase of the scheme is presently being implemented through the Bank of Industry (BOI) with the development of an application portal and processing of submitted applications.
According to him, three top institutions at the regional levels shall proceed to the national level, where the top five shall be awarded grants ranging between N120 million and N250 million.
He insisted that the grant awards should be used by the tertiary institutions solely for the development of the award-willing ideas.
Speaking in an interview with THISDAY, some of the beneficiaries attested to the fact that there were no intermediaries in the application and selection processes for accessing the funds and vowed to make good use of the opportunity to expand their enterprises and create more jobs.
One of the beneficiaries, Miss Aisha Suleiman, a graduate of Applied Biology from the Bayero University, Kano, who is into cashew production said the facility will help her acquire machinery to boost production and employ addition hands.
She said there was no interference, adding that she got the link to the portal from a friend. She said her good business plan could have brought her good fortunes.
Also another of the beneficiaries, Mr. Simeon Odogbane, who is the Chief Executive, Gbane Business Enterprise, said he was into Communications and Point of Sale (PoS) services.
He said the CBN support would enable him “go on business expansion, as well as expansion of labour force and profit maximisation.”
It is expected that the intervention would create a paradigm shift from the obsession for white-collar jobs among graduates, promote entrepreneurship and help reduce the level of unemployment among the country’s huge youth population.
