CBN leaves SMEs stranded as AGSMEIS in shambles

• Goes mute after April 2018 fan fair launch
• Scheme accretes N90bn since launch

Once again, the plague that often follows a promise to create access to finance for small and medium scale enterprise owners by government and its agencies, has shown its ugly face, as a Central Bank of Nigeria midwifed Bankers Committee programme, the Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS), is in a shambles that has left several agro-SMEs, who came under it, stranded.

The situation has left several small business operators in the agriculture value chain decrying what they see as a very slow process of loan disbursement under the AGSMEIS, despite funds accretion estimated at about N90 billion by December 2018.

Although initiated in 2017, it did not kick off until a year ago when CBN governor, Godwin Emefiele, in Abuja began the disbursement of what the public was told would be some N26 billion to this category of business owners. business a.m. has learnt, however, that only the N133 million photo-ops disbursement made at the ceremony to 358 beneficiaries ever took place. 

Emefiele said last year that the objective of making such funds available was to ensure access to affordable funding for Micro, Small and Medium Enterprises (MSMEs), especially for people operating in the informal sector of the economy.

The AGSMEIS is an initiative of the Central Bank of Nigeria (CBN) and the Bankers’ Committee in a bid to support and complement the Federal Governments’ efforts at promoting Agri-businesses/Small and Medium Enterprises as a vehicle for sustainable economic development and employment generation.

The initiative requires all Deposit Money Banks (DMBs) to set aside five percent of their annual profit after tax (PAT) and put in a pool of fund which would be disbursed to beneficiaries under three broad categories: direct, indirect and developmental components.

Under the direct component of the AGSMEIS, the beneficiaries could access loans to a limit of N10 million at an interest rate of five per cent per annum and a maximum tenor of up to seven years.

In addition, there was also a moratorium period of 18 months on principal and six months on interest element, depending on the nature of the business.

Under the indirect component of the scheme, the beneficiaries could access equity and quasi-equity investments of up to ten years with an initial lock-up period of three years before divestment, while the developmental component of the scheme would be used for capacity building and technical assistance to support beneficiaries.

When Emefiele announced the beginning of disbursement of the funds in April 2018, it was hoped that the N26 billion available at the time would be disbursed to those who had met the criteria outlined for access to the funds.

But since then no further disbursement has been made despite that many have completed the necessary training and documentation requirement for the loan.

Chibugo Okafor, an agri-business operator involved in bee keeping and honey production value chain said she completed her training since October 2018 and is yet to receive any feedback on when the loan would be disbursed.

“Sterling Bank has EDC training with SMEDAN. I completed the training since last October and I was assured that all necessary requirements were met. I haven’t heard back from them and even when I enquired from the people who trained after me, the requirements have increased,” she said.

She further disclosed to business a.m. that additional requirements such evidence of insurance policy with correspondence from accredited insurance institution, evidence of registration with NAFDAC and SON are now needed from potential beneficiaries.

“I have a business already so it might be easier for me. But for a start-up these are not easy requirements and they would cost money,” she said.

An official of SMEDAN who did not want her name in print told business a.m. that so many people have completed their training and documentation and are awaiting disbursement; yet more people are being trained on regular basis.

Central Bank officials would not speak on the record for this story, but simply told business a.m. that ever loan disbursement programme as this undergoes constant reviews, adding that more disbursements would be made in due course.